AN ACT Relating to increasing funding to the education legacy trust account for public education, child care, early learning, and higher education by creating a more progressive rate structure for the capital gains tax and estate tax;
SB 5813 is an act to increase funding for Washington’s education legacy trust account, with the stated purpose of supporting public education, child care, early learning, and higher education. It does this primarily by creating a more progressive structure for the state’s capital gains tax and estate tax. The bill imposes an additional excise tax on the sale or exchange of long-term capital assets by individuals, with the tax applying only to Washington capital gains above a specified threshold, and it raises the top estate tax rates while also increasing the estate tax exclusion amount.
The bill also revises a number of estate-tax provisions, including deductions and definitions tied to Washington taxable estates, qualified family-owned business interests, qualified heirs, qualified real property, and qualified woodland. It includes special rules for family-owned businesses, farms, and certain inherited property, as well as administrative provisions for reporting, liens, penalties, and interest. The act states that its revenues are dedicated to the education legacy trust account and that it takes effect immediately as an emergency measure.
SB 5813 amends Washington’s capital gains excise tax and estate tax statutes in Title 84 RCW, while also reenacting and revising related estate-tax definitions and deductions. Its practical effect is to increase state revenue by taxing high capital gains and larger estates more heavily, while preserving or expanding certain exclusions and deductions for estates, family-owned businesses, farms, and woodland property. The bill directs the new revenue to the education legacy trust account, affecting funding for K-12 education, early learning, child care, and higher education, and it applies to capital gains taxes imposed in calendar years and to estates of decedents dying on or after the bill’s specified effective dates.
The overall sentiment reflected in the voting history is supportive but closely divided. The bill passed both chambers, including committee and floor votes, but by relatively narrow margins, indicating substantial partisan or ideological disagreement. The lack of committee transcript excerpts limits direct insight into debate, but the final votes suggest the measure was controversial while still advancing through the legislature and being signed into law.
The main point of contention is the tax policy itself: supporters view the bill as a way to make the tax system more progressive and to increase funding for education and related services, while opponents likely object to higher taxes on capital gains and estates, especially on high-income individuals and larger wealth transfers. A second area of concern is the treatment of family-owned businesses, farms, and inherited property; the bill includes multiple deductions and special rules to protect those interests, suggesting lawmakers were trying to balance revenue goals against concerns about impacts on small businesses, agricultural operations, and estates. The narrow vote margins in both chambers indicate these tradeoffs were central to the debate.