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“Democrats are raising billions of dollars in taxes on businesses, but — not content with that — are also nickel-and-diming Washingtonians out of every last joy they can find in life.”
—House Republican Leader Drew Stokesbary
The largest tax increase in state history in 2025 and a state income tax in 2026
In the 2025 legislative session, Democrats passed $12.5 billion in state and local taxes – the largest tax increase in state history. In 2026, the ruling party came back and passed nearly $4.5 billion in new state and local taxes. A list of these bills can be found below.
These new and increased taxes make our state’s affordability crisis worse, as Washingtonians continue to struggle with costs for gas, groceries, housing, and child care. These taxes also burden employers. The new state income tax, which does little to lower taxes for the families and individuals who need relief the most, will also hurt our state’s economy by driving away jobs and discouraging investment.
Republicans opposed these tax increases and offered operating budget plans that would have right-sized state government. Democrats instead chose to increase taxes and state spending, while still making devastating cuts to K-12 education, early learning programs, and Medicaid.
Fortunately, House Republicans were able to help stop several other bad tax bills from being passed into law. You can also find this list below.
Bill No.
Description
Court filing fees: Created an additional surcharge added to fees collected by clerks of superior courts. (Adopted 2025.)
Tax on health insurance: Imposed a “covered lives assessment” of $16 per person for Medicaid managed care organizations and $0.50 per person for health carriers. (Adopted 2025.)
Clean fuel program expansion: Increased gas prices by an estimated $0.05 – $0.25 per gallon in the next two years by increasing carbon intensity reductions under the Clean Fuel Standard. (Adopted 2025.)
Property tax increase for conservation districts: Increased the rate at which counties may use property taxes to generate revenue for conservation districts. (Adopted 2025.)
Document recording fees: Expanded the assessment of two separate fees totaling $283 to substitutions or assignments of deeds of trust. (Adopted 2025.)
New driver licensing fees: Increased exam, permit, and service fees for new drivers, as well as fines from work zone traffic cameras. (Adopted 2025.)
New salmon fishing fee: Created a new fee for recreational salmon and steelhead fishing on the Columbia River. (Adopted 2025.)
New sales tax for law enforcement: Created the Local Law Enforcement Grant Program and authorizes cities and counties to increase sales tax 0.1% to fund the program. (Adopted 2025.)
Property tax spike: Increased the property tax levy authority of local school districts by 55%. (Adopted 2025.)
Duty-free merchandise: Created a 10% tax on products sold in a duty-free store in the form of a “concession” fee. (Adopted 2025.)
Tesla tax: Punitive excise taxes on the sale or banking of zero-emission credits held by Tesla. (Adopted 2025.)
Business tax increases: Across-the-board tax increases and additional punitive tax surcharges on businesses over a wide range industries. (Adopted 2025.)
Taxes on loan interest: Removed the B&O tax deduction for large financial institutions (greater than $10B in assets) on interest received from certain first mortgage loans. (Adopted 2026.)
New fees on tourism businesses: Creates a Tourism Assessment Program to levy annual fees on participating tourism businesses, subject to tourism business sector ratification. (Adopted 2026.)
Taxes on coal-fired electricity: Required a coal electricity plant to pay Climate Commitment Act emission fees as well as a sales tax on coal purchased for use in electric generation. (Adopted 2026.)
Multiple taxes for local government spending: Permits a new utility tax, new sales taxes, and removed voter-approval requirements for existing affordable housing tax revenues. (Adopted 2026.)
Insurer taxes: Limited the B&O tax exemption for insurance businesses to the specific insurer that paid the corresponding gross premium taxes and applied this change retroactively to 2019. (Adopted 2026.)
Cannabis license fees: Increased the fees for cannabis producers, processors and retail licenses. (Adopted 2026.)
Insurance premiums: Shifted health care costs from state employees to working families ($1,400 per year/family of four). (Adopted 2025.)
Discover Pass: Increased the cost of a Discover Pass by 50%. (Adopted 2025.)
Hunting and fishing licenses: Increased the fee for hunting and fishing licenses by 38%. (Adopted 2025.)
College grant/scholarship adjustments: Increased college tuition every year, starting with $700 during the freshman year to $900 during the senior year, totaling about $3,000 per student. (Adopted 2025.)
Liquor license fees: Significantly increased the cost of liquor licenses for grocers, restaurants, bars, and more. (Adopted 2025.)
Slashing tax incentives: Eliminated tax preferences for gold and bullion sales, low-income energy credits, and self-storage rentals. (Adopted 2025.)
Gas and transportation taxes: Increased in gas taxes, vehicle sales taxes, ferry ridership fees, replacement tire fees, registration fees, and more. (Adopted 2025.)
Capital gains and death taxes: Increased estate tax rates to as much as 35% on some residents, and increased the tax rate on capital gains over $1 million from 7% to 9.9%. (Adopted 2025.)
Sales tax expansion: Applied sales tax to critical business services including temporary staffing, digital services, security services, and applied tobacco taxes to nicotine products. (Adopted 2025.)
Abortion funding: Imposes a per-member-per-month tax on health insurance plans to fund abortion services. (Adopted 2026.)
Prescription drugs: Removed a tax exemption for the warehousing and reselling of prescription drugs, adding costs that will be passed on to consumers. (Adopted 2026.)
Taxing data centers: Removed a sales and use tax exemption for data center equipment, increasing costs and likely hurting jobs. (Adopted 2026.)
The state’s first income tax: Imposed a new tax of 9.9% on a household’s adjusted gross income over $1 million in Washington state. (Adopted 2026.)
Bill No.
Description
Business investment income: Removes the B&O investment income deduction for certain circumstances.
Tax on wealth: Enacting a wealth tax of 1% on intangible assets over $100 million on the ownership of stocks, bonds, and other financial intangible property.
B&O tax increases: Raises taxes 10-20% on more than a dozen types of job providers in Washington state.
Property tax cap: Triples the property tax growth limit.
Guns and ammo: Imposes an 11% sales tax on firearms and ammunition.
Textile producer fees: Requires producers of apparel and textiles to pay fees and be regulated by the state to create a recycling program for clothing and fabrics.
County tax on home sales: Allows counties to impose a local real estate excise tax.
Electronic devices: Adds an additional tax on the sale of cell phones, smart watches and other devices.
New sales tax in Kent: Allows the city of Kent to tack on an additional 0.3% to the existing sales tax.
Executive compensation surcharge on hospitals: Creates a new tax on health care entities based on the salaries of their executives.
Phone services: Increases taxes on wired, wireless, and VoIP lines and for prepaid wireless services (988 tax).
Tax increase on utilities: Allows counties to impose an additional 3% tax on utilities.
Executive compensation surcharge for businesses: Imposes a surcharge on certain companies based on the salaries of their executives.
New child and family sales tax: Authorizes counties to impose a new sales tax of up to 0.1% to fund additional services that assist children and families.
Local journalism: Takes 1.22% of the first $6 million made by search engines and social media platforms operating in the state and gives it to news media in “underserved communities.”
Expanded real estate excise tax: Allows all counties (and cities, under certain conditions) to impose a 0.5% real estate excise tax, removing prior restrictions.
New county-imposed property tax: Authorizes counties to levy a new property tax to fund public health clinics. The tax is not subject to aggregate statutory limits.
Lodging tax hike: Increases state lodging tax by 2% from April 1, 2026 through Sept. 30, 2026. Creates enhanced tourism account for tax proceeds.
Tax on storage rentals: Subjects the rental of individual self-storage units to retail sales and use tax.
New Kitsap Transit taxing districts: Allows for new passenger-only ferry service districts that may assess up to an additional 0.3% sales tax as well as transportation-related taxes, tolls and fees.
New tax for services to criminals: Authorizes counties to impose a new sales tax of up to 0.1% to fund programs that steer individuals with behavioral health needs out of the criminal justice system.
Solid waste: Establishes a variable rate tax starting at 0.5% on solid waste collection services. The rate increases over the first five years to 2.5%.
New tax on home sales: Imposes a new real estate transfer tax of up to 3% on the sale of certain homes.
B&O surcharge hikes: Doubles a B&O surcharge on businesses with at least $250,000 in revenue and increases a B&O surcharge on certain financial institutions by nearly 60%.
Unrealized capital gains: Taxes unrealized gains from intangible assets such as mutual funds, stocks, and bonds.
Dating apps: Taxes owners of online dating applications.
Insurance carrier reserves: Taxes health insurance companies’ reserve accounts over a certain threshold, which will likely be passed on to consumers.
Alcoholic beverages: Increases taxes on wine, cider and locally brewed beer.
New county-imposed B&O taxes: For the first time, gives counties the authority to impose B&O taxes on businesses. The initial limit established by this bill would be 0.2% of gross revenue.
Tech surcharge hike: Eliminates the cap on the advanced computing surcharge, drastically increasing the tax on tech companies. Right now, the cap is $75 million.
Payroll tax: Creates a 5% tax on salaries above $125,000 for companies that gross more than $5 million, had employee wages higher than $7 million in the previous year, and have more than 20 employees.
Raising property tax limits: Increases schools’ local levy property tax ability by raising the cap on the maximum value a home can be taxed for school purposes.
Document filing fee increase: Increases the fee on filing deeds of trust from $1 to $5.
New cultural access sales tax: Authorizes counties and cities to both issue a voter-approved sales tax of up to 0.1% to fund access to nonprofit cultural organizations.
Tax hike on grocery bags: Bans the sale, distribution and retail use of carryout plastic bags in the state. More than doubles the fee on paper bags from the current 8 cents per bag to 20 cents per bag by 2030.
Animal control excise tax: Authorizes cities and counties with higher than standard growth limits to charge up to $2.50 per household for animal control and shelter systems.
Utility surcharge: Authorizes utilities to add a surcharge to customers’ utility bills to pay for a new Wildfire Prevention and Protection Fund.
Public grocery stores: Authorizes cities to establish a tax increment finance area and seek capital grants to finance government-owned-and-operated grocery stores.
New hidden tire fee: Adds to existing tire fees with a new fee up to $6 per tire that retailers are not permitted to list as a line item or note on a receipt. The fee will increase by 10 percent per year.
Cannabis taxes: Creates categorized taxes for various cannabis products.
Washington state public bank: Establishes a state-owned public bank to finance public initiatives.
Short-term rentals: Imposes new sales tax of up to 4% on Airbnb, VRBO and other short-term rental homes.
Health insurance premium tax: Increases the premium tax on health insurance companies, raising costs for consumers.
Sugar-sweetened beverages: Imposes a volumetric tax on sugar-sweetened beverages.
Vehicle weight fee: Expands the vehicle weight limit for fees applied by local transportation districts to include more vehicles.
Wealth tax: Allows the state to take a 0.5% of an individual’s intangible financial assets above $50 million every year that the individual remains a Washington resident.
Taxing smokers and vapers: Increases the tax on cigarettes 65% to $5-per-pack and sets the sales tax on all other nicotine-related products, including vapor products, at 95% of the sale price.
Penalty on providers of low-income jobs: Imposes an Apple Health employer assessment on job providers with employees who are Medicaid enrollees.
Kratom taxation: Imposes a new 95% tax on the sale, use, consumption, handling, possession, or distribution of all kratom products.
Cannabis excise tax: Shifts the cannabis tax structure away from a percentage of the sales price to a weight-and-potency model.