New WA state capital gains tax

[explanade]

Real estate and certain retirement accounts are exempted; gains from sales of a qualified family businesses appear to be exempted.

My view as an ex-resident (who still has property there)
I believe this tax will take in less than they expect, because people will be able to optimize around it. The truly rich will set up entities/trusts in another state while others will plan their CG around the rather high limit. The only people getting stung will be those where the cost of the workaround is higher than the tax paid. However, the tax lawyers and CPAs can rejoice.

Thought this was interesting, presenting the various amicus briefs filed in support and against the law (including links to the briefs)
https://www.washingtonpolicy.org/pu...ary-of-capital-gains-income-tax-amicus-briefs

Seems like they're targeting employees of Microsoft and Amazon who have a lot of gains from stock.

I'm surprised WA has no income tax.

So sales and property taxes must be high?

I thought it was a common thing for people to cross the border into Oregon to buy stuff to avoid sales taxes.

 

[obsessed]

I'm surprised WA has no income tax.

So sales and property taxes must be high?

I thought it was a common thing for people to cross the border into Oregon to buy stuff to avoid sales taxes.

Washington's system is pretty regressive. High sales tax (~10%) and high taxes on necessities (booze, cigarettes and gas). Property taxes are no great deal but not Illinois high. People do love to cross the border to Oregon to save on sales tax.

There was an initiative a few years back to implement a state income tax offset by lower sales tax (to my recollection) but it was voted down as the voter's didn't trust that sales taxes would decrease. I get that as sales taxes always seem to creep up here but it would have been better for the majority of the population.

 

[Chuckanut]

Washington's system is pretty regressive. High sales tax (~10%) and high taxes on necessities (booze, cigarettes and gas). Property taxes are no great deal but not Illinois high. People do love to cross the border to Oregon to save on sales tax.

Crossing the border to OR only works for a small percentage of the people who live near to the border. FWIW, a new carbon tax is in effect in WA starting 1/1/2023.

The regressive tax system was used as a reason to implement the new income excise tax on capital gains. From what I have read the legislation does absolutely nothing to reduce the sales tax. Nor is there anything in it that would preclude raising the sales tax or any other tax in the future.

 

[PageTwo]

Does anybody know if the monies paid last year on this new "Excise Tax" can be taken as a deduction for federal taxes for 2023?

 

[nwsteve]

Based on this article, apparently not
https://www.lanepowell.com/Our-Insi...-Capital-Gains-Excise-Tax-Reduce-Taxable-Gain.
Definitely a question to get WA tax expert's view

 

[FlaMariner]

Just read thru this post and this was scary stuff.....

Excise tax just for capital gains, tax that the courts might determine if it is legal, a carbon tax (whatever that means), crossing the border to save on sales tax....Yikes...

(y'all are welcome to come to Florida but please leave those topics/taxes behind)

 

[marko]

Seems like they're targeting employees of Microsoft and Amazon who have a lot of gains from stock.

.

If I read it correctly, Bezos just sold something like $52B (that's billion) in stock.

BUT he just moved from Seattle to Miami and saved $660MM (that's million) in taxes.

 

[Surewhitey]

If I read it correctly, Bezos just sold something like $52B (that's billion) in stock.

BUT he just moved from Seattle to Miami and saved $660MM (that's million) in taxes.

Yep, per CNBC...Bezos plans to unload 50 million shares of Amazon before Jan. 31, 2025. Posting those sales in Florida will save him at least $610 million. Wonder if he got a heads up phone call?

https://www.cnbc.com/2024/02/12/jef...-will-save-him-over-600-million-in-taxes.html

Similar to Musk moving to TX...

 

[explanade]

If I read it correctly, Bezos just sold something like $52B (that's billion) in stock.

BUT he just moved from Seattle to Miami and saved $660MM (that's million) in taxes.

Yep, per CNBC...Bezos plans to unload 50 million shares of Amazon before Jan. 31, 2025. Posting those sales in Florida will save him at least $610 million. Wonder if he got a heads up phone call?

https://www.cnbc.com/2024/02/12/jef...-will-save-him-over-600-million-in-taxes.html

Similar to Musk moving to TX...

The raw sum is a lot of money but it’s not even 15% of those proceeds?

Isn’t cap gain 20%?

 

[marko]

The raw sum is a lot of money but it’s not even 15% of those proceeds?

Isn’t cap gain 20%?

Sorry, I didn't read it correctly. He's selling 50K million SHARES over a period of a year.. He sold 12 million shares last week worth $2B. Regardless, he's banking $600MM by moving to Miami.

 

[explanade]

Ah thinking of federal taxes, not state income taxes.

 

[Gotadimple]

Sorry, I didn't read it correctly. He's selling 50K million SHARES over a period of a year.. He sold 12 million shares last week worth $2B. Regardless, he's banking $600MM by moving to Miami.

But as it was reported by the press, when he notified the SEC of the sale, he used his Seattle address.

 

[Chuckanut]

Sorry, I didn't read it correctly. He's selling 50K million SHARES over a period of a year.. He sold 12 million shares last week worth $2B. Regardless, he's banking $600MM by moving to Miami.

The tax is 7% on the gain. If it’s all gain that’s about 140 million if he was a WA resident at the time of the sale.

“The law imposes a 7% tax on capital gains of more than $250,000 from the sale of stocks, bonds, and other assets. The tax applies to gains made on or after January 2022 and the first payment is due on or before April 18 of this year. It’s paid on a calendar year basis. It affects individuals, not business entities (with some exceptions, as noted below).”