Washington voters rejecting new 7% tax on capital gains in nonbinding advisory measure

OLYMPIA — Washington voters were rejecting a state advisory measure to adopt a new 7% tax on capital gains above $250,000 in Tuesday night’s election results.

Washington’s advisory votes are nonbinding and do nothing to change existing law, but allow voters to sound off on tax bills passed by the Legislature.

The advisory vote on the new tax was trailing by 24 percentage points.

Advisory vote No. 37 concerns the new tax of capital gains on the sale of assets — like bonds and stocks — above $250,000. The tax — which faces a lawsuit and vehement opposition among Republicans — is a long-sought priority for Democrats. It is scheduled to take effect for tax returns filed in 2023.

Passed this spring as Senate Bill 5096, the law exempts assets like sales of retirement accounts, real estate, livestock, some agricultural property and timber. Also exempted are sales of sole-proprietor businesses that have a gross revenue up to $6 million, as well as some auto dealerships.

Advisory vote No. 36, which concerns a tax on telephone lines, was trailing by nearly 10 percentage points.

That measure stems from House Bill 1477 to implement the national 988 call system for suicide prevention response and behavioral health crises.

Advisory vote No. 38, which concerns a tax on captive insurance companies amounting to 2% of premiums from owners and affiliates, was trailing by 15 percentage points.

That law comes from Senate Bill 5315, which passed the Legislature almost unanimously.

Tuesday night’s results were the first batch; more ballots will be tallied in the coming days.