Legislative information

Quarter 2, 2025 legislative update

ESSB 5814 guidance

Of the major revenue-raising bills passed during the 2025 session, ESSB 5814 in particular is generating a lot of interest and questions from the business community and industry groups. Portions of the bill go into effect as early as Oct. 1. DOR is engaging extensively with stakeholders and is operating as quickly and transparently as possible.

We have published a 5814 landing page where we will provide official guidance for the bill. Multiple interdivisional implementation teams are working on the various parts of 5814. As they complete their work interpreting the bill language and crafting guidance, it will be posted to the landing page.

Because the traditional rulemaking process is not fast enough to put interpretive guidance out by as early as October, we will use quicker means, such as interim guidance statements, special notices, and excise tax advisories, to provide taxpayers the information they need as soon as possible. We will follow that up with formal rulemaking in the longer term.

Record-setting year for the WFTC

As of this spring, 2025 results for the Working Families Tax Credit already far exceed the results for all of either 2024 or 2023. As of the beginning of June, DOR had issued more than 222,000 refunds totaling $163.5 million to working families across Washington.

The majority of WFTC applications come in at the same time that people file their federal income taxes. The big change this year was the addition of Turbo Tax to the suite of third-party vendors that have incorporated the WFTC into their tax-filing software.

Since launching the WFTC in 2023, DOR has issued over 592,000 refunds totaling more than $434.6 million. This year alone, approximately 300,000 children have benefited from the program.

Washingtonians have until the end of the year to apply for the 2025 WFTC refund. Due to a recent change in law, they may also apply for up to the three prior calendar years, assuming they qualified at the time. This summer, we are planning a marketing and outreach push to first-time applicants to make them aware of their ability to apply for eligible past years.

Please encourage your constituents to visit workingfamiliescredit.wa.gov to see if they are eligible for a tax refund through the Working Families Tax Credit.

TY 2024 initial capital gains tax collections exceed $560M

Initial results for Tax Year 2024 capital gains tax revenues due this past April have come in higher than last year’s. Because many taxpayers file for an October extension, results so far are preliminary.

As of the beginning of June, net payments for TY 2024 totaled $560.6 million. That’s above the $416.6 million of capital gains tax collected in TY 2023. The first $524 million or so (it adjusts for inflation each year) of capital gains tax revenue goes to the education legacy trust account, and any revenue exceeding that goes to the common school construction account.

DOR agency request legislation during the 2025 session, SSB 5314, made a number of administrative improvements to the capital gains tax. The department is grateful to the legislature for its support of the bill. A notable provision is the creation of a late payment penalty waiver that is similar to late payment penalty waivers that are available for other excise taxes.

Watch: Understanding property tax

Property tax is the oldest tax levied in Washington, and it’s also one of the most difficult to understand. At the same time, property tax is essential to many of the services we rely on every day.

Please check out a short (3:30), new video we put together that explains property tax in a clear and succinct manner, and feel free to share it.

We are considering additional short informational videos to produce as resources for the legislature and general public. If you have suggestions for video topics that you think would be particularly helpful, please let us know.