Washington State’s Estate Tax Whiplash
35% Rate Repealed After Just One Year
In a remarkable policy reversal, Governor Bob Ferguson signed Senate Bill 6347 last Tuesday, rolling back the estate tax increase that Democratic lawmakers enacted less than a year ago. Washington, which briefly held the distinction of having the nation’s highest estate tax rate, will soon return to its previous rate structure.
In 2025, facing a multibillion-dollar budget shortfall, Washington’s legislature raised the top estate tax rate from 20% to 35% for estates valued above $9 million (after the standard $3 million exclusion). The increase took effect July 1, 2025.
The backlash was swift. Critics warned that the dramatic rate hike would push wealthy residents to relocate or restructure their holdings to avoid the tax, potentially resulting in less revenue over time. Family business owners raised concerns about being forced to sell to cover tax liabilities.
