OLYMPIA, Wash. – May 17, 2024 – Capital gains excise tax collections so far have topped $433 million in the second year.
Initial capital gains excise tax numbers for tax year 2023:
- $433 million has been collected.
- 3,850 returns have been filed.
- This year to date, $371 million has been deposited into the Education Legacy account.
Due dates for the capital gains excise tax (April 15 and October 16 for 2024) do not align with Washington’s fiscal year calendar, which closes June 30. For budgetary purposes, refunds and payments due after the close of the previous fiscal year are included in the following fiscal year’s collections. For example, additional refunds and payments from year one resulted in a decrease of $62 million from this fiscal year’s collected total. Total collections for the two-year biennium have exceeded $1.2 billion.
Revenue collected by the tax each fiscal year is earmarked for education, with up to $500 million (adjusted for inflation) going to the education legacy trust account, and any remainder deposited into the common school construction account. It is anticipated that additional payments will be made for tax year 2023 and those will be deposited in the education legacy trust account. Based on the initial returns, no additional funding is anticipated for the common school construction account this year.
Revenue collections for this year have not yet been finalized. Many taxpayers received filing extensions in April and are required to complete their filings and payments in October. A number of those returns are still being processed in addition to those that have been amended since filing.
About capital gains
The capital gains tax is a 7% excise tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets. For tax year 2023 (taxes due in April 2024), the tax applied after a standard $262,000 deduction of capital gains.
The tax only applies to individuals and to gains allocated in Washington state. Individuals could be liable for the tax if they have an ownership interest in a pass-through or disregarded entity that sells or exchanges long-term capital assets.
Tax year 2023 returns were due at the same time taxpayers filed their federal tax returns - April 15.
For more information about the capital gains tax visit Revenue’s website.
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