State Personal Income Tax Laws at a Glance
Most states levy a personal income tax to help pay for roads, public education, and other shared public goods and services. But some states, including Washington, have no state income tax and instead make up for revenue needs through other taxes (such as property and retail sales tax). Oregon, Washington's neighbor to the south, has no retail sales tax but does collect personal income taxes -- in other words, all states collect taxes somehow.
Every state is unique, but the vast majority of state income tax revenue helps pay for education (particularly K-12) and health care (primarily Medicaid). Other sources of state funding include transportation, corrections, and public assistance.
Where Does Washington Make Up the Difference?
Like other states that don't collect personal income tax, Washington still has to make up for its lack of an income tax somehow. Businesses in the state are subject to a business and occupation (B&O) tax, based on gross receipts. Rates differ according to the specific business activity, and are paid on either a monthly, quarterly, or annual basis. A number of cities in the state, including Seattle, collect additional B&O taxes.
Washington businesses also may be subject to a public utility tax, which also depends on the type of business practice.
Consumers pay retail sales tax, use tax, and property tax. Property tax makes up about 30 percent of the state's total revenue.
Federal Personal Income Tax
But even though Washington lacks a personal income tax, Uncle Sam still requires everyone earning over a certain amount to pay their share of federal taxes. See FindLaw's Filing Taxes section to learn more about your tax obligations under federal law.
Although Washington has no personal income taxes, the following links provide relevant tax-related information and resources. See FindLaw's Tax Law section to learn more.
|Code Section||No personal income tax|
|Who is Required to File||-|
|Federal Income Tax Deductible||-|
|Federal Income Used as Basis||-|
Note: State laws are constantly changing -- contact a Washington tax attorney or conduct your own legal research to verify the state law(s) you are researching.
Research the Law
Looking at the law is always a good place to start when you have a legal question. The resources below can help:
Washington Personal Income Tax Laws: Related Resources
These additional resources will provide more information on federal and local taxes.
Contact a qualified attorney.