The 2021 legislative session was a busy one in Olympia, with a handful of new laws set to take effect at the start of the new year.
Capital gains tax
The Democrat-led state Legislature approved a 7% tax on capital gains over $250,000 early in the year. While it technically takes effect at the start of 2022, it won’t officially be collected until 2023.
It’s estimated that the tax will bring in over $400 million in its first year. Those dollars will be used to invest in child care and early learning, among other things, as a way to balance the state’s tax code. That’s according to supporters, who insist it will impact less than 1% of the state’s wealthiest taxpayers.
The tax also faces a court challenge, led by a coalition that includes the conservative Freedom Foundation, former state Attorney General Rob McKenna, and more. Their lawsuit alleges that the levy is actually a graduated income tax, and as such, violates the state’s constitution.
The lawsuit is ongoing, with oral arguments having kicked off in August of 2021.
Long-term care tax (sort of)
The status of a long-term care tax set to begin on Jan. 1, 2022, is largely up in the air.
Under the tax, all W2 employees who average 12.5 hours per week were initially set to see the deductions for the tax as of Jan. 1, 2022. A person earning $50,000 a year would pay $290 a year in additional taxes. Washingtonians could opt out of the tax, but that was contingent on having a

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