Effort to repeal Washington’s capital gains tax advances toward November ballot

OLYMPIA – Washington voters will likely have the chance this November to do away with the state’s new tax on capital gains, after a ballot initiative to repeal it was certified Tuesday.

The capital gains tax, enacted in 2021, has brought in nearly $900 million to the state’s budget since it took effect last April. Revenue from the program is earmarked to go toward child care, early learning and school district construction or renovation projects.

The program instituted a 7% tax on the sale or exchange of long-term capital assets like stocks, bonds and some other types of investments exceeding $250,000.

On Tuesday, the Secretary of State’s Office announced that organizers of an effort to repeal the capital gains tax collected enough signatures to put the initiative on the November election ballot.

The repeal effort, Initiative No. 2109, was organized by Let’s Go Washington, a political action committee dedicated to repealing laws passed by the Democrat-led state Legislature. The proposed repeal is one of six initiatives backed by the political action committee to overturn state laws.

Brian Heywood, a business owner from Redmond, Washington, has bankrolled the capital gains reversal proposal and the other five initiatives, spending $1 million apiece trying to get them on the November ballot. Of the six initiatives, two still awaited certification by the state as of Tuesday.

Next, Initiative No. 2109 will move into the hands of state lawmakers. Legislators have three options about what to do with it. They could vote to pass the repeal, draft and pass an alternative initiative to appear alongside the initiative on the ballot, or refuse to act on it.

For an initiative to the Legislature to be considered, it must have a minimum of 324,516 signatures. Last December, supporters of Initiative No. 2109 said they turned in 419,699 signatures to the Secretary of State’s office. State officials recommend organizers of any initiative submit a minimum of 405,000 signatures, in case any signatures are deemed invalid by elections officials.

Lawmakers have until the end of the legislative session, March 7, to decide what to do with the capital gains repeal initiative and any other ballot measures that have collected enough signatures to be certified.