Washington State Taxes: What You’ll Owe in the 2026 Tax Season

There are no individual income taxes assessed on wages earned in the state. However, the state recently created a graduated income tax on high earners’ capital gains income, with a top rate of 9.9 percent on gains of more than $1 million. The state has a high sales tax that applies to a broad range of things, including digital products and advertising. Washington also has a progressive tax on real estate sales and the nation’s highest rate of taxation on estates, both of which contribute to the state’s rating of 45th place on the Tax Foundation’s Competitiveness Index.

The big picture:

• Income tax: The state assesses no income taxes on wages, but it does have a graduated income tax on capital gains income, with the highest rate reaching 9.9 percent for capital gains income above $1 million.
• Property tax: Washington had a statewide average property tax rate of 0.75 of a home’s assessed value, although actual rates vary by county, according to the latest data from the Tax Foundation.
• Sales tax: The average combined state and local tax is 9.51 percent, according to the Tax Foundation. The state imposes a 6.5 percent sales tax, and local governments can impose up to a 4.1 percent sales tax, with an average local sales tax of 3.01 percent.

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How is income taxed?

Washington does not assess income taxes on wages earned in the state; however, residents are taxed on a graduated basis on capital gains income. The state has a standard capital gains deduction for 2025 of $278,000, meaning only those with capital gains income above that threshold pay a tax.

What about investment income?

Capital gains income is taxed on a graduated basis as outlined above. Capital gains include profits from the sale or exchange of long-term capital assets such as stocks, bonds, business interests or other investments and tangible assets.

Are Social Security benefits taxed?

Social Security is not taxed in Washington state.

How is property taxed?

Washington has a statewide average property tax rate of 0.75 percent. Actual rates vary by county, from a low of 0.53 percent in San Juan County to 0.96 percent in Garfield County. The lowest median rate paid in 2024 was $1,574 in Garfield County, while the highest was $7,114 in King County.

What about sales and other taxes?

• Sales tax: The average combined state and local tax is 9.51 percent, according to the Tax Foundation. The state has a 6.5 percent sales tax, and local governments can impose up to an additional 4.1 percent, with an average local sales tax of 3.01 percent. Exemptions include prescription medication, medical devices and oxygen, newspapers and gun safes. A complete list is available here.
• Gas and diesel: Washington state taxes gas at 55.4 cents per gallon. Diesel is taxed at 58.4 cents per gallon.
• Vehicle tax: Residents pay the state’s 6.5 percent sales tax, plus any local sales tax, as well as a 0.5 percent motor vehicle sales tax to purchase or lease a vehicle in Washington. The state has an additional 8 percent luxury tax on any vehicle that costs more than $100,000.
• Alcohol: Residents pay a 20.5 percent spirits sales tax, plus a spirit liter tax on liquor and wine that is more than 24 percent alcohol by volume, which amounts to $3.7708 per liter for consumers. Residents pay state and local sales tax on beer and on wine with an alcohol content of less than 24 percent by volume.
• Lottery: The state does not tax lottery winnings, but federal taxes may be due to the IRS, and the state is required to withhold 24 percent of any winnings over $5,000 for the IRS. In addition, the state withholds 30 percent of winnings for federal taxes for nonresidents of the United States.

Will my heirs or estate have to pay inheritance and estate tax?

Washington state has an estate tax. The governor signed Engrossed Senate Bill 6347 on March 24. The changes from this bill generally take effect on June 11, 2026. The law reverts estate taxes to pre-2025 levels and allows the $3 million exclusion to be adjusted for inflation in the future. See the four tables below:

The taxable rates listed in the tables below are on the value of estates above the exclusion amount.

Surviving spouses are exempt but may still need to file an estate tax return.

Are there any tax breaks for older residents?