Important!

Disaster Relief: Revenue will work with businesses that cannot file or pay their taxes on time due to recent wildfire damage or other natural disasters. Learn more about disaster relief.

Ayuda por desastres: El Departamento de Ingresos trabajará con las empresas que no puedan presentar o pagar sus impuestos a tiempo debido a los daños causados por incendios forestales u otros desastres naturales. Conozca más sobre la ayuda en caso de desastre.

  1. Home
  2. Forms & Publications
  3. Publications By Subject
  4. Tax Topics
  5. 2026 Tax Legislation

2026 Tax Legislation

Below are summaries of tax-related bills passed by the legislature and signed into law by Governor Ferguson during the 2026 legislative session.

Capital gains tax prepayment

This bill allows individuals who owe Washington’s capital gains tax to make a prepayment up to six months before the filing deadline.

Effective June 11, 2026 (HB 1376, Chapter 191, Laws of 2026)

Renewable energy facilities

This bill creates a new property tax exemption and excise taxes for renewable energy facilities and repeals a similar program created under SHB 1756, Chapter 427, Laws of 2023.

Effective Jan. 1, 2028 (E3SHB 1960, Chapter 260, Laws of 2026)

Special notice: coming soon.

Definition of timberland

This bill modifies the definition of timberland for purposes of the real estate excise tax for certain transfers to a government entity.

Effective June 11, 2026 (HB 1983, Chapter 171, Laws of 2026)

Tax on loan interest

This bill amends RCW 82.04.29005 to narrow the tax preference for interest on investments or loans secured by first mortgages or deeds of trust under RCW 82.04.4292.

Effective July 1, 2026 (SHB 2089, Chapter 131, Laws of 2026)

Special notice: coming soon.

Cash transactions and pennies

This bill clarifies how businesses should adjust the price of cash transactions due to the elimination of the penny.

Effective June 11, 2026 (SHB 2334, Chapter 138, Laws of 2026)

Special notice: coming soon.

Coal-fired electric plants

This bill eliminates the preferential tax treatment related to sales of coal to a coal-fired electric generating plant.

Effective date Jan. 1, 2026 (HB 2367, Chapter 37, Laws of 2026)

Insurer taxes

This bill clarifies the imposition of taxes on insurers operating in Washington by:

  • Amending RCW 82.04.320 (Sec. 2).
  • Repealing RCW 82.04.322 (Sec. 3).
  • Creating a new section in Chapter 82.04 RCW (Sec. 4)
  • Amending RCW 82.04.299 (Sec. 5).

Effective both prospectively and retroactively to Oct. 2, 2019, for Sec. 2 and Jan. 1, 2022, for Sec. 5. Effective June 11, 2026, for Sec. 3-4. (EHB 2487, Chapter 263, Laws of 2026)

Special notice: coming soon.

Transportation resources

This bill has the following tax impacts:

  • Modifies the tax on recreational vessels that takes effect Jul. 1, 2026 (Part I).
  • Modifies the tax on luxury vehicles that took effect Jan. 1, 2026 (Part II).
  • Repeals the tax on luxury aircraft imposed under ESSB 5801 prior to it’s effective date (Sec. 408).

Parts I & II effective Jul. 1, 2026 (ESHB 2711, Chapter 255, Laws of 2026)

Special notices: coming soon.

Tax administration

This bill makes technical corrections, clarifies ambiguities, and provides administrative efficiencies with respect to tax laws administered by the Department of Revenue. Items of note include:

  • A new section in Chapter 82.04 RCW for existing contracts as provided in our interim guidance statement.
  • Clarification that sale at retail does not include services provided by a public agency to another public agency pursuant to an interlocal agreement under Chapter 39.34 RCW.

Effective June 11, 2026 (ESSB 6113, Chapter 250, Laws of 2026)

Prescription drugs and taxes

This bill modifies the business and occupation (B&O) tax rates and exemptions related to prescription drug warehousing and reselling and creates a new preferential B&O tax rate for critical access pharmacies.

Effective Jan. 1, 2027 (ESB 6228, Chapter 265, Laws of 2026)

Special notice: coming soon.

Data center exemptions

This bill repeals the sales/use tax exemption for replacement equipment for data centers.

Effective July 1, 2026 (ESSB 6231, Chapter 266, Laws of 2026)

Special notice: coming soon.

Agricultural crop protection products exemption

This bill extends the hazardous substance tax exemption for agricultural crop protection products through Jan. 1, 2038.

Effective June 11, 2026 (SB 6244, Chapter 164, Laws of 2026)

Tax on millionaires

This bill does the following:

  • Establishes a tax on millionaires.
  • Creates a new sales/use tax exemption for grooming and hygiene products.
  • Creates a new sales/use tax exemption for diapers.
  • Creates a new sales/use tax exemption for over-the-counter drugs.
  • Increases the small business B&O tax credit.
  • Increases the registration requirement threshold.
  • Modifies the exclusions from the high-grossing business surcharge.
  • Modifies the definition of retail sale in RCW 82.04.050.
  • Creates a new sales/use tax exemption for purchases of certain retail services by schools and libraries.

Effective dates vary (ESSB 6346, Chapter 238, Laws of 2026)

Special notices:

Estate taxes

This bill modifies the estate tax exclusion amount and rates.

Effective date June 11, 2026 (ESB 6347, Chapter 209, Laws of 2026)