Does Washington have state income tax?

No! Washington has NO state income tax. Washington is one of only 9 states in the U.S. with no income tax. You pay federal income tax, but $0 in Washington state income tax, regardless of how much you earn. This saves middle-income earners thousands of dollars per year compared to states like California, Oregon, or New York.

How much money do I save with no Washington state tax?

On $75,000 income: vs California (saves ~$4,000/year), vs Oregon (saves ~$5,600/year), vs Idaho (saves ~$3,500/year), vs Minnesota (saves ~$4,200/year). Over 10 years, this is $40,000-$56,000 in savings compared to neighboring states!

What taxes does Washington have instead of income tax?

Washington has a 6.5% state sales tax (total 7-10% with local), business & occupation (B&O) tax on businesses, property taxes, and various excise taxes. There's no capital gains tax on most residents (only on very high earners selling investments). For W-2 employees, you'll pay NO income tax but higher sales tax.

Is Washington planning to add an income tax?

Washington's state constitution generally prohibits a graduated income tax without a constitutional amendment requiring voter approval. Attempts to implement an income tax have failed repeatedly. While the future is uncertain, Washington has maintained no income tax for decades and voters consistently reject income tax proposals.

Does Washington tax retirement income?

No! Since Washington has no income tax, it doesn't tax Social Security, 401k withdrawals, IRA distributions, pension income, or any other retirement income. This makes Washington one of the most retirement-friendly states in the U.S.

Are there local income taxes in Seattle or other Washington cities?

No. Washington cities cannot levy local income taxes. Seattle, Tacoma, Spokane, Bellevue, and all other cities have 0% income tax. You only pay sales tax and property tax at the local level.

Washington Income Tax Calculator 2025

0% State Income Tax

Washington has NO state income tax. You keep 100% of your income (minus federal tax). This saves middle-income earners $3,000-$6,000+ per year compared to neighboring states!

Washington's No Income Tax Policy

Washington is one of only 9 states in the U.S. with no state income tax. Whether you earn $30,000 or $300,000, you pay $0 in Washington state income tax.

                    ✅ What This Means for You:
                    $0 state income tax on wages and salaries
$0 state tax on retirement income (401k, IRA, pensions, Social Security)
$0 state tax on investment income (for most residents)
$0 state tax on self-employment income
No state tax forms to file (only federal)

                

How Much Do You Save?

Here's what you'd pay in Washington vs neighboring states on $75,000 income:

State	Tax Rate	Annual State Tax	WA Savings
Washington	0%	$0	—
California	Up to 9.3%	~$4,000	Save $4,000/year
Oregon	Up to 8.75%	~$5,600	Save $5,600/year
Idaho	5.3% flat	~$3,500	Save $3,500/year
Minnesota	Up to 7.05%	~$4,200	Save $4,200/year

10-Year Savings Example:

If you earn $75,000/year in Washington vs California:

Annual savings: $4,000
10-year savings: $40,000+
20-year savings: $80,000+

That's enough for a down payment on a house, retirement savings, or your child's college fund!

What Taxes Does Washington Have?

Washington makes up for no income tax with other taxes:

Sales Tax

State rate: 6.5%
Total rate (with local): 7-10% depending on city
Seattle: ~10.25%, Tacoma: ~10.2%, Spokane: ~8.9%, Vancouver: ~8.4%
Applies to most goods, but NOT groceries (food tax exempt)

Property Tax

Varies by county and city
Average effective rate: ~1% of home value
Lower than California (~0.7-1.2%), higher than Oregon (~0.9%)

Business & Occupation (B&O) Tax

Applies to businesses based on gross receipts
Most W-2 employees don't pay this
Self-employed/business owners pay 0.13-1.5% depending on activity

                    💡 Bottom Line: For W-2 employees, the lack of income tax more than makes up for higher sales tax. On $75k income, you'd pay maybe $500-1,000 extra in sales tax vs a state with 5% income tax that charges 5% sales tax. But you save $3,000-4,000 in income tax. Net savings: $2,000-3,500/year.
                

Is Washington's No-Tax Status Safe?

Washington's state constitution generally prohibits a graduated income tax. Any income tax would require a constitutional amendment approved by voters. Attempts to add an income tax have consistently failed:

1934, 1936, 1938, 1942: Income tax proposals rejected by voters
1973: Income tax initiative defeated 70%-30%
2010: Income tax on high earners defeated 64%-36%

While nothing is guaranteed forever, Washington voters have a strong track record of rejecting income taxes.

                    ⚠️ 2021 Capital Gains Tax: Washington passed a 7% tax on capital gains over $250,000 per year (from selling stocks, bonds, etc.). This affects very high-income investors but does NOT affect regular wages, salaries, or most middle-class taxpayers. If you don't sell >$250k in investments per year, this doesn't apply to you.
                

Best Places to Live in Washington (By Income Level)

For Income $30,000 - $50,000

Recommended: Spokane, Yakima, Bellingham, Olympia

Why: Lower cost of living, $0 state tax maximizes purchasing power

Housing: $900-$1,400/month for 2BR

For Income $50,000 - $100,000

Recommended: Tacoma, Everett, Federal Way, Renton, Bellevue suburbs

Why: Balance of affordability and Seattle proximity, no income tax

Housing: $1,500-$2,500/month

For Income $100,000 - $200,000

Recommended: Bellevue, Redmond, Kirkland, parts of Seattle

Why: Tech jobs (Microsoft, Amazon, etc.), excellent schools, 0% state tax amplifies high income

Savings: On $150k, save ~$8,000/year vs California

For Income $200,000+

Recommended: Medina, Mercer Island, Clyde Hill, Sammamish

Why: Premium neighborhoods, tech executive hub, massive tax savings (10-12% in California = $20k-30k+ savings per year)

Note: If selling large amounts of stock (>$250k/year), watch capital gains tax

When Moving to Washington Makes Sense

                    ✅ Move to Washington if:
                    You're moving from ANY state with income tax (instant savings)
You work in tech (Seattle/Bellevue tech hub with 0% state tax is unbeatable)
You're a high earner (save $10k-$30k+/year vs CA, NY, OR)
You're retiring (0% tax on ALL retirement income)
You value Pacific Northwest lifestyle + tax savings
You work remotely for a company in a high-tax state

                

                    ⚠️ Consider Trade-offs:
                    Higher sales tax (7-10% vs 5-7% in other states)
High cost of living in Seattle area (housing is expensive)
Rainy weather (if that matters to you)
Property taxes (moderate, but present)

                

Tax Filing in Washington

Since Washington has no income tax, you only file federal taxes. You don't need to file any Washington state return!

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State rankings: Lowest Tax States 2025 | Best States for Retirees | States with Flat Tax | Highest Tax States 2025

Related Resources

Oregon Tax Calculator - Compare WA vs OR
California Tax Calculator - See your savings
All State Tax Calculators
All 9 No-Tax States

📊 Data Sources: WA Department of Revenue. Last updated: November 2025.