The Washington state Senate passed a new capital gains tax on the sale of high-profit stocks, bonds and other assets on Sunday, sending the bill to Gov. Jay Inslee (D) to sign.
The measure, if signed into law, would levy a 7 percent tax on the voluntary sale of stocks, bonds and other capital assets that earn profits that exceed $250,000 for both individuals and couples.
Tara Lee, a spokeswoman for Inslee, said on Friday that the governor would sign the bill if it makes it to his desk by the end of the year’s legislative session, which was set to end on Sunday.
According to the bill, the tax would be implemented to “help meet the state’s paramount duty,” which is to provide all Washington children with an education, in turn “creating the opportunity for the child to succeed in school and thrive in life.”
Specifically, the bill says the money raised through the tax will be used to fund K-12 education, early learning and child care, in addition to providing all children with an education.
Business owners, however, are not subject to the tax if they were regularly a part of running the company for five of the previous 10 years before selling, have owned the business for a minimum of five years and earned $10 million or less a year before the sale, according to The Associated Press.
Qualified family-owned small businesses, residential and other real property and retirement accounts are also exempt from the tax.
If signed, the tax would be imposed in 2022. According to the AP, the measure is expected to bring in $415 in 2023, just one year into its existence.