Washington’s new “Millionaires’ Tax” has survived a major challenge at the ballot box.  In the November 2026 mid-term election, Washington voters rejected Initiative 645, which sought to repeal the state’s recently enacted “Millionaires’ Tax” and prohibit future state and local taxes on individual income.  The result clears the way for the 9.9% tax on Washington taxable income above $1 million, subject to certain adjustments , exclusions, and credits, to take effect on January 1, 2028, with first returns due in 2029.

Initiative 645 drew controversy over its ballot description, because the Washington Attorney General’s office included a fiscal statement indicating that repeal of the tax would decrease funding for public services.  Opponents of the wording argued that the statement could mislead voters because the tax collections are not scheduled to begin until 2029.  For now, it is unclear how much the wording affected the outcome.

In the meantime, the tax still faces a Washington state constitutional challenge, which is pending in Klickitat County Superior Court.  The lawsuit relies on longstanding Washington Supreme Court precedent that treats income as property for state constitutional purposes and restricts graduated income taxation due to the constitution’s requirement that taxes on property be uniform on the same class of property. The outcome of that litigation could ultimately determine whether the “Millionaires’ Tax” takes effect.

For now, individuals and business owners should continue to take the “Millionaires’ Tax” into account in their tax planning.  The tax may affect Washington residents, part-year residents, and nonresidents with Washington-source income, including compensation, investment income, and pass-through business income. For additional information about the tax, please check out our recent article on this topic.  Our attorneys are here to help you evaluate how these developments may affect your circumstances.”

This article does not constitute legal advice. For legal advice that applies to your situation, you should contact an attorney.