Washington legislature updates estate tax rates for 2025 and beyond

On April 18, 2025, the Washington Senate introduced Senate Bill 5813, a significant piece of legislation aimed at reforming the state's estate tax structure. The bill proposes a new tax table that adjusts the rates and thresholds for estate taxes, impacting estates of decedents who pass away on or after January 1, 2025.

The primary purpose of Senate Bill 5813 is to revise the existing estate tax framework, which has not been updated in several years. The proposed changes include a tiered tax rate system based on the value of the taxable estate. For example, estates valued at $1 million or less would incur no tax, while those exceeding $9 million would face a tax rate of 35%. The bill also introduces a more progressive tax structure, with rates increasing from 10% to 35% as estate values rise.

Key provisions of the bill include specific tax brackets that delineate the tax owed based on the estate's value. For instance, estates valued between $4 million and $6 million would incur an initial tax of $610,000 plus a 23% tax on the amount exceeding $4 million. This structure aims to ensure that higher-value estates contribute a fairer share to state revenue.

The bill has sparked notable debates among lawmakers and stakeholders. Proponents argue that the revised tax rates are necessary to address income inequality and provide funding for essential state services. Critics, however, express concerns that the increased tax burden could discourage wealth accumulation and impact family-owned businesses.

The economic implications of Senate Bill 5813 are significant. By adjusting the estate tax, the state anticipates an increase in revenue that could be allocated to public services, education, and infrastructure. However, opponents warn that higher taxes on estates may lead to increased financial strain on families during an already challenging time.

As the bill progresses through the legislative process, experts suggest that its passage could set a precedent for other states considering similar reforms. The outcome of Senate Bill 5813 will likely influence discussions around estate taxation and wealth distribution in Washington and beyond. The Senate will continue to review the bill, with potential amendments and further debates expected in the coming weeks.