Washington state tax planning, domicile and residency, and capital gains tax considerations.
Since October 2025, Washington taxes the services most startups sell — IT, custom software, advertising, training. The DOR is waiving penalties for companies that come forward by September 30, 2027. Here's the diagnosis and the fix.
IP26-645 kills the 9.9% income tax before it starts — but the capital gains excise tax under chapter 82.87 RCW survives. Here's what the initiative's actual text does, and the litigation it sets up.
IP26-645 submitted 511,408 signatures on July 2 — nearly double the requirement. What the repeal initiative does, the November 3 timeline, the two-year constitutional lock if it passes, and why founders should keep planning as if the 9.9% tax takes effect.
Washington's 30-day safe harbor makes you a nonresident — it doesn't change your domicile. Long-term stock gains are allocated by domicile at the time of sale, so the safe harbor alone won't protect your exit.
Part-year residents face a two-part calculation under ESSB 6346 — and the $1M standard deduction prorates by income, not days. How §§406 and 315 actually work, with examples.
Initiative 645 is certified for the November 3, 2026 ballot — but the 9.9% tax remains law, effective January 1, 2028. The planning playbook for Washington founders, investors, and high earners.
For Washington founders, §1202 is the single most valuable tax provision in the federal code. Here's how to qualify, document, and defend the exclusion across both pre- and post-OBBBA regimes.
Washington's capital gains tax: 7% up to $1M, 9.9% above. Rates, exemptions, QSBS, residency planning, and what changes in 2028.
Does Washington have a state income tax? The 9.9% rate, $1M threshold, January 1, 2028 effective date, the constitutional challenge, and planning moves for founders and investors.
