SB5096 requires that beginning January 1, 2022, an annual state net CGT is imposed on the sale or other voluntary exchange of long-term capital assets by individuals. The tax rate is 9.0 percent. Generally, the tax rate is applied to the capital gains amount reported on the individual’s federal income tax return.
For resident individuals, all capital gains from the sale or exchange of intangible personal property, such as stock, are allocated to Washington. All taxpayers must file with the state Department of Revenue (DOR), a CGT return for each taxable year; however, a person with no tax liability is not required to file a tax return.
The due date of the state CGT return is the due date for the federal income tax return, unless otherwise required by DOR. The first state CGT returns are due in 2023.
Some sales or exchanges of some capital assets are explicitly excluded from the state CGT.
All state CGT revenues are deposited into the state general fund.
1st Substitute:
Imposes a 7.0 percent capital gains tax beginning January 1, 2022.
