(WASHINGTON STATE) — Washington lawmakers are moving to roll back a 2025 increase in the Washington estate tax, with Senate Bill 6347 proposing lower rates for larger estates and a reduced top rate. The proposal is active during the 2026 legislative session and, if enacted, would change how higher-net-worth Washington residents plan for death-time transfers.
This is a state-level estate tax debate, not a change to the federal estate tax. The federal estate tax remains governed by federal rules and is reported on IRS Form 706, while Washington’s estate tax is a separate state charge.
What an “estate tax” is, and who typically pays it
An estate tax is a tax on certain transfers at death. it applies when a person dies owning assets above a state’s taxable threshold, after deductions and exemptions allowed under state law.
- Real estate (primary homes, rentals, land)
- Business interests (including closely held companies)
- Brokerage accounts and some retirement assets
- Life insurance proceeds in certain ownership structures
Most Washington families never owe Washington estate tax. The tax tends to affect higher-value estates, including:
- Long-time homeowners in high-appreciation markets
- Founders and owners of closely held businesses
- Households with concentrated stock positions
SB 6347 is framed as a rollback of the 2025 rate hike on the largest estates. Supporters cite competitiveness concerns and report that some wealthy residents may “redomicile” to other states. That means changing legal residency to a lower-tax jurisdiction before death.
⚠️ Warning: Estate taxes can apply even if most wealth is illiquid. Business owners may face pressure to borrow, insure, or sell assets to pay the tax.
Before/After: Washington estate tax rate proposal (SB 6347)
The core change is a lower maximum rate and a reset of the graduated rate structure for larger estates. Washington’s estate tax is progressive, meaning the effective rate rises as taxable value rises.
| Issue | Before (after 2025 increase) | After (proposed in SB 6347) |
|---|---|---|
| Top estate tax rate | Higher top rate applied to the largest estates | Lower top rate than the 2025 level |
| Rate structure | Steeper progression at the top end | A narrower rate band, topping out at the proposed cap |
| Planning pressure on very large estates | Higher urgency to plan around the top bracket | Reduced urgency relative to 2025, but planning still needed |
SB 6347 is widely described as targeting higher-value estates. It would not change federal estate tax law.
For federal background, the IRS estate tax rules are outlined on irs.gov under the estate tax topic pages and in guidance tied to Form 706. For immigrant residency rules that often control U.S. transfer-tax exposure, start with IRS Publication 519 at irs.gov/pub/irs-pdf/p519.pdf.
Legislative context: why SB 6347 is moving, and Jamie Pedersen’s role
In Olympia, the rollback proposal is advancing alongside a broader set of tax debates. Senate Majority Leader Jamie Pedersen has publicly described some redomiciling claims as anecdotal, while still acknowledging reports that affluent households are considering moving legal domicile.
SB 6347 has also been described as facing limited opposition. Procedurally, that can matter. Bills with fewer organized “no” campaigns often move faster through:
- Committee hearings and executive sessions
- Fiscal review and amendments
- Floor scheduling and votes
At the same time, lawmakers are debating Senate Bill 6346, sometimes called the “Millionaires’ Tax.” Even though SB 6346 is an income-tax-style proposal and SB 6347 is an estate tax bill, high earners and owners often evaluate them together.
Many households feel the combined effect of:
- State estate tax exposure at death
- Capital gains taxes on investment exits
- Business taxes (including B&O at the state level)
- Local levies in certain cities
That interaction is why estate planning discussions often expand into residency, business succession, and timing decisions.
Broader tax debates: “wealth flight” claims and what they mean in practice
Supporters of rollback proposals often argue that high rates can push wealthy residents to:
- Move their legal domicile to a different state
- Shift investment activity out of Washington
- Structure ownership through out-of-state entities
Opponents often argue that lowering top-end taxes reduces resources for public priorities. They also note that anecdotal stories do not equal statewide data. Real estate patterns and social circles can overstate a trend, even when individual moves are real.
Washington’s debate is often framed against states with no wage income tax, such as Nevada. That comparison is common in state tax politics. It does not, by itself, prove cause and effect.
For immigrants, “wealth flight” talk can feel distant. But the practical planning question is familiar: where are you legally resident, and what does that mean for taxes now and at death?
💡 Tax Tip: If you split time between states, keep clean records. Domicile often turns on facts like home ties, driver’s license, voter registration, and where professionals are located.
Public response: why SB 6346 testimony matters to the estate tax climate
Even though SB 6347 is the estate tax rollback bill, the public energy has been especially intense around SB 6346. Large volumes of public comments can change how lawmakers message a bill, which amendments get offered, and which votes become politically risky.
Supporters of the Millionaires’ Tax have framed it as a way to fund credits and public services. Opponents have framed it as another layer on top of existing taxes, with relocation anecdotes used as cautionary examples.
Several public figures have weighed in on the broader debate. Those voices can draw attention, but they do not decide outcomes. Committee chairs, fiscal staff, caucus strategy, and vote counts drive what ultimately passes.
Public comment volume also does not guarantee passage or failure. It can, however, shift the “center” of negotiations. That is one reason an estate tax rollback can move quietly while an income-related proposal dominates headlines.
Expert analysis: practical impacts for owners, hiring, and cross-border families
Economists and tax professionals often focus on incentives. The key real-world effects of a high state estate tax rate can include:
- Business succession pressure: A closely held business may be valuable on paper but cash-poor. Estate tax can force sales or recapitalizations.
- Hiring and location decisions: Owners may expand in states viewed as more tax-friendly.
- Timing behavior: Households may accelerate gifting, restructure ownership, or relocate earlier than planned.
Pass-through businesses are frequently discussed in this context. In a pass-through, business income is taxed on the owner’s return. Even though SB 6347 is an estate tax bill, owners often plan income taxes, capital gains, and estate exposure as one combined puzzle.
Policymakers, on the other hand, point to budget constraints and affordability pressures. They argue that revenue measures and credits can support households facing high costs.
Projections differ because behavior differs. Some residents will relocate. Others will not. Some will do partial planning. Others will restructure completely.
Transition rules and “grandfathering”: what to watch
As of today’s date, SB 6347 is a proposal, not enacted law. Transition rules matter as much as rates.
Key questions to monitor in bill drafts and fiscal notes include:
- Effective date: Does the change apply to deaths occurring on or after a certain date?
- Retroactivity: Does the bill try to reach back to earlier dates?
- Phase-ins: Are rate cuts immediate or staged?
- Coordination with deductions: Are exemptions, deductions, or valuation rules changed?
In most state estate tax systems, the relevant trigger is the date of death, not the date planning documents were signed. That is why last-minute planning is risky.
📅 Deadline Alert: For tax year 2026 (returns filed in 2027), do not treat a proposal as final law. Wait for the signed bill and the state’s implementation guidance.
For federal-side reporting touchpoints that can intersect with estate planning for immigrants, review IRS Publication 519 (resident vs. nonresident rules) and the IRS international portal at irs.gov/individuals/international-taxpayers.
What to do now (practical actions and timeline)
While the legislature debates SB 6347, planning should focus on flexibility and documentation.
- Review your estate plan and beneficiary designations in 2026. Confirm they match your current residence and family situation.
- Business owners should request a liquidity check. Ask whether insurance, buy-sell terms, or credit lines could cover potential estate tax costs.
- If you are considering changing domicile, document facts carefully. Domicile disputes often turn on details.
- Immigrants and visa holders should confirm U.S. tax residency status. Federal residency rules can affect worldwide reporting and transfer planning. Start with Publication 519.
- Track the bill through the 2026 session, including amendments. The final rates and effective date can change quickly near floor deadlines.
⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.
