Washington state tax: Overview
Washington is one of the nine states that don't tax income, and property taxes are close to the national average.
Washington has a relatively high sales tax rate compared to other states and a somewhat controversial capital gains tax that was recently upheld by the state's Supreme Court. Much of Washington residents' tax burden depends on the type of income they have and which city they live in.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Washington state Income tax
There is no state personal income tax in Washington. However, unlike other states with no personal income tax, Washington State now has a capital gains tax.
Washington sales tax
Washington's state sales tax rate is 6.5%. Localities can add up to 2.88% to that, with the average combined rate at 9.38%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Exempt
- Clothing: Taxable
How much are property taxes in Washington?
In Washington, the average effective property rate is 0.76%.
Washington Property Tax Breaks for Retirees
Property tax exemption program: Qualified homeowners may have their property taxes reduced. Additionally, this program can prevent excess taxes if the market value increases by freezing the home's taxable value. To qualify for this program, you must meet specific requirements by the end of the assessment year.
- Must be at least 61 years of age (at least 57 if the surviving spouse of a qualified participant)
- Must own your home
- Must have lived in the home for more than half the year
- Combined disposable income must not exceed the county threshold.
Property tax deferral: Adults 60 or older with disposable income below the county-based threshold may also qualify for the state's tax deferral program.
The program allows qualified homeowners to defer property taxes or special assessments on their residences.
The state pays the taxes on behalf of the homeowner and files a lien to indicate that the state has an interest in the property. The deferred taxes, plus 5% interest, must be repaid to the state when the owner passes away, sells, or otherwise moves from the home.
Washington gas tax
- Gasoline: $0.45 per gallon
- Diesel: $0.45 per gallon
Source: Sales Tax Handbook
Washington taxes on alcohol and tobacco
Source: Sales Tax Handbook
Source: Sales Tax Handbook
Washington estate and inheritance taxes
- An estate tax is imposed by Washington on estates exceeding $2.193 million (the exemption threshold is subject to adjustment each year for inflation).
- Tax rates range from 10% to 20%.
- The state offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million.
There is no inheritance tax in Washington.
Washington capital gains tax
Washington's capital gains tax is 7% on the sale or exchange of individual long term capital assets (e.g., stocks, bonds, business interests, etc.) that exceed $250,000. Only the portion of gains above the threshold is subject to the tax and some assets are exempted from the tax.
The capital gains tax was challenged in court, but the Washington Supreme Court upheld the capital gains tax in March 2023, as a valid excise tax under the state's constitution.
