😶The State of Washington just did a boo-boo.
The State of Washington, famous (among tax aficionados) just made a spectacular U-turn on one of their most coveted and prized policies: No State Income Tax.
The legislature has been asked to vote on a state income tax 10 times. Ten times they said "Nay."
Ten times, voters treated the idea like a bad Gen Z blind date. Declined politely, and ghost👻.
Then came March 10th, 2026. A date that will live in Seattleite tax infamy. They blinked. And passed their very first state income tax.
(The crowd goes wild… cough, cough, cough.)
Here are the deets:
The Millionaire's Tax
↳ 💸A 9.9% state income tax on annual income exceeding $1 million.
↳ 📅Effective January 1, 2028, with first filings due in 2029.
↳ 🚪Exclusions include real estate sales, qualified family-owned businesses, and certain retirement income including public pensions.
2025 Is the Opening Act, they are taxing everybody
↳ 🏢Washington's 2025 session included B&O tax increases, capital gains tax hikes, and estate tax increases.
↳ 📈A new 2.90% excise tax on long-term capital gains exceeding $1 million, retroactive to beginning of 2025
↳ ⚰️The estate tax rate climbs to 35% on estates valued at $9 million and above.
↳ 🎲In other words: your kids (and other heirs) do not pass Go. They do not collect $200.
🧾 Oh, And Your Services Are Now Taxable Too
↳ 📣That's right, effective October 1, 2025, some services are now going to have to collect and remit sales tax.
↳ 💻Newly taxable services include IT training, technical support, network operations, help desk services, security and investigation services, armored car services, and temporary staffing.
↳ 👗 And yes, fashion consultants. True story: my good friend who is a personal stylist had to file sales tax returns for flying into Washington and doing a gig.
↳ 🎤Live presentations, including lectures, seminars, workshops, and courses delivered in person or remotely, are now also subject to sales tax.
Translation: if you sell services in Washington and haven't updated your invoices yet, you going to be in "troubs".
What are the people to do?
Vote with your feet. Everyone else is.
Howard "Mr. Starbucks" Schultz, announced his departure from Washington on the same day the Millionaire's Tax passed. Forty-four years in Seattle. Gone. Whoosh.
He and his wife Sheri are bound to "The Sunshine State". He left a nice message for the State of Washington on LinkedIn, which if you read between the lines, says:
"Goodbye Washington, we are very, very, liberal with everything... except our wallets."
And he's not alone. Turns out, if you know how to make money, you also know when to move. Here are some others that have made similar treks:
↳ Mark Zuckerberg - left California. Closed on a massive Miami-area estate. Zuck out.
↳ Larry Page & Sergey Brin - the Google founders quietly moved entities out of California and terminated 15 related companies in the state, all before the January 1, 2026 wealth tax deadline. Timing, in life and business, is everything.
↳ Peter Thiel - tiptoed his way out. Buying a Florida home in 2020, but only recently changing his voter registration.
↳ Elon Musk - moved himself, SpaceX, and X to Texas. He didn't just leave. He issued a press release about it.
↳ Larry Ellison - Oracle fled California for Texas, but realized it was still too close to California, and moved to Nashville, Tennessee. Country roads, with zero state income tax.
Washington & Cali saying, "Wait, this ain't fair?"
Remember, people who left Ireland because of the Great Potatoes Famine, weren't cowards or deserters. It's called "First Mover Advantage". Get with the program.
The Bottom Line:
Washington didn't just pass a tax. They passed a message, and their wealthiest residents heard it loud and clear.
And just as I mentioned in my last newsletter, the best tax strategy isn't always about deductions. Sometimes, it only has to be about zip codes.