(WASHINGTON) — Washington State Senate Democrats moved Senate Bill 6347 toward passage on Monday, scheduling a floor vote to roll back last year’s estate-tax increase and cut the top rate to 20%.

The bill would reduce Washington’s top estate-tax rate from 35% to 20%. It would also return the overall rate structure from 10%-35% to 10%-20%, depending on estate value. Lawmakers framed the timing as a planning issue for residents heading into 2026.

Senate Majority Leader Jamie Pedersen, D-Seattle, tied the rollback to concerns that wealthy residents may be leaving the state. “We do have a lot of anecdotal evidence that people are making a decision to re-domicile, and I think it’s worth taking that seriously,” Pedersen said. Democrats cast the move as an acknowledgment that the 2025 hike created problems they now want to address.

Pedersen described the rollback as an “olive branch” and drew a line between SB 6347 and other revenue proposals moving separately. He said it was unrelated to revenue from the proposed “millionaires’ tax,” Senate Bill 6346. That bill targets earnings over $1 million at up to 9.9% and has drawn legal challenges.

Democrats have argued for months that Washington needs new revenue options, while opponents have warned about stacking taxes on top of one another. The estate-tax rollback lands inside that broader debate, as lawmakers weigh how to protect state funding while responding to concerns about taxpayer mobility. The floor vote on Monday, February 16, 2026, put the issue on a fast track as residents and advisers look ahead.

Republicans and business-backed groups have pointed to last year’s increase as a warning sign for investment decisions. They have described Washington’s 35% top estate-tax rate as the highest in the U.S. Supporters of SB 6347 argued that the rollback would reduce the incentive for high-net-worth residents to change domicile.

The Association of Washington Business criticized the 2025 increase and said lawmakers moved it without enough stakeholder input. Max Martin, representing the Association of Washington Business, said the approach risked reduced investment. The group has pushed lawmakers to view the estate tax as part of the state’s overall competitiveness.

Business groups also tied the estate-tax debate to the practical reality that people can move, and that Washington competes with states that have no estate tax or different tax mixes. They argued that even modest shifts among high-income households can ripple through long-term investment decisions. Supporters of the rollback highlighted the bracketed rate structure, while keeping the focus on bringing the top rate down from last year’s 35%.

Revenue from Washington’s estate tax flows to the Education Legacy Fund and higher education aid. That link has made SB 6347 a budget issue as well as a tax-policy fight, because changes in estate-tax collections can affect those accounts. Opponents of the rollback have warned about tradeoffs if lawmakers reduce a revenue source tied to education spending.

Critics of the 2025 increase have argued that the state can lose more than it gains if high earners depart. The Washington Policy Center cited net losses of households earning over $200,000 to states like Florida, Texas, and Nevada. Hedge fund manager Brian Heywood reported dozens of potential moves.

Former Sen. Reuven Carlyle warned that multiple taxes can interact in ways that change decisions at the margin. He cautioned about a “tipping-point scenario” from cumulative taxes including Seattle’s JumpStart payroll tax and capital gains levy. Supporters of SB 6347 have pointed to such warnings as they push for a rollback.

Washington’s debate also plays out against a shifting federal backdrop for estate planning. H.R. 1, the “One Big Beautiful Bill,” permanently sets the federal estate tax exemption at $15 million, indexed for inflation, starting January 1, 2026. That change raises the exemption from the prior TCJA amount and can alter how families and advisers think about exposure at the federal level.

Nearby states have taken their own approaches to how federal tax policy affects state accounts. Oregon’s Senate Bill 1507 passed 17-13 on February 16, 2026, rejecting some federal tax cuts from H.R. 1 to recover $311 million for state accounts. Sens. Anthony Broadman, D-Bend, and others led the effort.

For Washington lawmakers, the combination of a higher federal exemption and regional decisions like Oregon’s has sharpened questions about whether the state’s estate tax fits its broader fiscal strategy. SB 6347 centers on reversing last year’s top-rate increase and narrowing the overall range back to 10%-20%. Pedersen’s public acknowledgment of relocation concerns put those stakes plainly as the Senate prepared to vote.