Washington State Tax Increase Proposals 2026: What Businesses Need to Know

​Washington State Tax Increase Proposals 2026: What Businesses Need to Know

Washington lawmakers are exploring several new ways to increase revenue, with an income tax being just one option. The Washington Research Council’s article “Cataloging the Legislature’s tax increase proposals” compiles many of the tax bills introduced so far this year and notes that many proposals never become law. It categorizes the ideas into six main areas: income and gross receipts, health care, information, social media and data, “sin” taxes, housing, energy and environment, and local funding and local tax authority.
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For businesses, the article highlights proposals that could increase labor and operating costs or alter tax rules for specific industries. Examples include a payroll expense tax on wages above a certain threshold for some companies, changes to B&O tax treatment for certain financial activities, and new or expanded assessments linked to Medicaid enrollment or insurance coverage. It also points out taxes targeting data centers and social media platforms, along with potential local tax options that might raise costs in particular cities or counties. The main takeaway for employers is uncertainty: even if only some of these bills move forward, they could impact hiring plans, pricing, and where businesses choose to expand in Washington. 

​Full article: “Cataloging the Legislature’s tax increase proposals” https://researchcouncil.org/cataloging-the-legislatures-tax-increase-proposals/