What taxes did WA lawmakers consider this year? Here’s a look at their ideas
Democrats’ proposed income tax on millionaires has dominated headlines over the ongoing 60-day legislative session.
It’s not the only tax proposal this year. Here are some of the other ideas lawmakers have considered.
Cigarette tax increase
Democratic lawmakers this session have sought to boost the cigarette tax, with legislation to bump the state’s rate by about $2 to $5 per pack of 20. Backers believe the move would help dissuade young people from taking up the habit while opponents argue that it amounts to a regressive tax.
A recent proposed amendment, however, would lower the increase to about 25 cents per pack, advocates of the initial measure warned.
Senate Bill 6129 was scheduled for executive session in the House Finance Committee on Saturday but no action was taken.
Prescription drug warehouse repeal
SB 6228 would strip the preferential business and occupation (B&O) tax rate for reselling and warehousing prescription drugs, as noted in the bill report. For critical access pharmacies, such as those more than 25 miles away from another pharmacy, it would create a preferential B&O tax rate.
Supporters argue that the current preference for such wholesalers is outdated and no longer needed. Opponents fear that the repeal will lead to higher costs for pharmacies and pricier medications.
The bill passed out of the House Finance Committee last weekend.
Data center refurbishment repeal
SB 6231 would slash tax breaks for operators of data centers. The bill cleared the House Finance Committee on Saturday and would nix a sales tax exemption for refurbishing or replacing older server equipment, as reported by the Washington State Standard.
While those in favor of the bill contend that major corporations don’t need such tax relief, opponents note that data centers have helped rural communities’ economies; they also say that the measure could hurt the state’s competitiveness.
Local government tax authority
House Bill 2442 would broaden the use of local real estate excise tax revenues and allow a new 0.01% local sales and use tax to fund services for families and children, according to the bill report. It would also widen the allowable uses of revenues from the local sales and use tax for housing and related services, among other aims.
Cash-strapped cities and counties would get more revenue flexibility to fund various services, pro-arguments say. Those in the “con” camp allege that it adds to the tax burden in the state.
HB 2442 cleared the upper chamber on a 26-22 vote March 5.
Tax on big banks to back wildfire mitigation
Under HB 2089, high-volume mortgage lenders would be required to pay the B&O tax on interest income generated on loans or investments “secured by first mortgages or trust deeds on non-transient residential properties,” per the bill report. Revenue created by the B&O tax-deduction removal would be sent to the state’s Wildfire Response, Forest Restoration, and Community Resilience Account.
The legislation cleared the Senate Ways & Means Committee earlier this month.
Thursday is the final day of the 2026 session.
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