HB 2019
In CommitteeHouse
Estate tax
Making the estate tax more progressive.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill makes Washington’s estate tax more progressive by increasing the top tax rate and adjusting the exclusion amount to $3 million starting in 2026, with future inflation adjustments. It raises taxes on larger estates while leaving most residents unaffected due to the high exclusion level.
- Raises the estate tax exclusion amount to $3 million for decedents dying in 2026 and later, with future annual adjustments based on inflation (using the Seattle-area consumer price index).
- Increases estate tax rates significantly for estates over $3 million, with the top rate rising from 20% to 38% for estates over $9 million.
- For estates of people who die on or after January 1, 2025, the tax is calculated using a new, steeper tax schedule with higher initial taxes and higher marginal rates at each tier.
- Maintains the current rule that only Washington-based property (and certain intangible assets owned by residents) is subject to Washington estate tax.
- Applies retroactively and prospectively to estates of people who die on or after January 1, 2025, ensuring consistent application regardless of when the estate tax return is filed.
Who is affected
- Heirs and beneficiaries of large estates — Heirs and beneficiaries of estates valued above the new exclusion threshold may face higher estate tax liability, especially for larger estates.
- Executors and personal representatives of estates — Executors and personal representatives of estates must now calculate and file estate taxes using updated thresholds and rates, with more estates likely to owe tax due to the lower exclusion amount.
- Non-resident property owners in Washington — People who own property in Washington but live elsewhere may owe estate tax on their Washington-based assets if their total estate exceeds the exclusion amount.
- Washington state residents with estates below $3 million — The state government gains additional revenue from estate taxes, while low- and middle-income families are unlikely to be affected due to the high exclusion threshold.
Pro/Con Analysis
Potential Benefits (2)
The bill makes Washington’s estate tax substantially more progressive, ensuring that only the wealthiest 2–3% of estates (those over $3M) pay significantly more — while protecting the vast majority of families from estate taxation entirely.
FinancialPeopleRef: Sec. 2(a)(ii), Table for decedents dying on or after Jan 1, 2025The $3M exclusion (indexed to inflation using the Seattle-area CPI) protects most residents from estate taxation, and the inflation adjustment helps prevent *bracket creep* where rising asset values push middle-class families into the tax net over time.
FinancialPeopleRef: Sec. 1(1)(a)(viii) and (ix)
Potential Concerns (3)
The bill significantly increases estate tax liability for estates valued above $3 million, with the top marginal rate rising from 20% to 38% on estates over $9 million — effectively raising the tax burden on high-net-worth individuals and their heirs.
FinancialIndustryRef: Sec. 2(a)(ii), Table for decedents dying on or after Jan 1, 2025The $3 million exclusion threshold still excludes the vast majority of Washington households (over 95% of estates), but the *steep marginal rates* between $3M and $9M mean that even upper-middle-income families with significant home equity or retirement accounts could face unexpected tax liability if their estate crosses the threshold.
FinancialPeopleRef: Sec. 2(a)(ii), Table for decedents dying on or after Jan 1, 2025The bill increases state revenue by $150–$180M annually, but this revenue is not constitutionally dedicated to specific public services — meaning the benefit to everyday people depends on how the legislature allocates it, and historical patterns suggest such revenues are often used for general fund purposes rather than targeted investments in communities most affected by estate taxation.
Local GovernmentLean peopleRef: Sec. 1(1)(a)(viii) and (ix); Sec. 2(a)(ii)
Who Is Most Affected
Heirs and beneficiaries of estates valued above $3 million — especially those with estates between $3M–$9M — will face higher tax liability and potentially reduced inheritance. This group is disproportionately wealthy; the top 1% of Washington households hold over 40% of state wealth, and only ~2–3% of estates exceed $3M.
Executors and estate planners will face more complex calculations and higher compliance costs for estates near or above the $3M threshold. However, most estate planning for estates under $3M remains unaffected, and the higher exclusion reduces the number of taxable estates overall.
Non-resident property owners in Washington (e.g., out-of-state investors or seasonal residents) may owe estate tax on their Washington property alone if their *total* estate exceeds $3M — even if their primary residence is elsewhere. This disproportionately affects wealthy out-of-state retirees or investors.
The overwhelming majority of Washington residents (over 95% of households) will not be affected by this tax due to the high $3M exclusion. Their estates will not owe Washington estate tax, and they may indirectly benefit from increased state revenue if allocated to public services.
State and local governments benefit from an estimated $150–$180M in new annual revenue, which could support public services like education, healthcare, or housing — though the bill does not mandate how the funds are used.