In Washington state, taxes are levied on sales by both the state and local municipality, on property and on an estate when someone dies, but it doesn’t charge any income tax. Here’s everything you need to know about Washington tax rates and how they could affect you.
|Washington State Taxes|
|Rate Range of Taxes||0% to 20%|
|State Sales Tax Rate||6.5%|
|Income Tax Rate Range||0%|
|Estate Tax Rate Range||0% to 20%|
Washington State Income Tax
There is no Washington state income tax. Washington state residents pay federal income tax only.
Washington State Sales Tax
When a resident makes a purchase in Washington state, they will be charged sales tax. The state sales tax rate is 6.5 percent. The local county or city can add an additional sales tax. In Seattle, for example, the total sales tax is 10.1 percent. The average combined state and local sales tax rate in Washington state is 9.18 percent.
Sales tax in Washington state is not charged on:
- Prescription drugs
- Sales to nonresidents
- Federal government sales
- Interstate and foreign sales
- Sales to Indians or Indian tribes
- Manufacturer’s machinery and equipment
Sales tax is charged on the sale of tangible personal property, and also on services such as repair, cleaning, installation, construction and so on. It is also charged on the sale of digital products such as downloaded or streaming movies or music. It is the responsibility of the seller to collect the sales tax from the buyer and remit it to the state.
Retailers who ship or deliver goods into Washington state are required to collect Washington state sales tax based on the location to which the item is delivered. Since the sales tax can vary from county to county, this so-called destination-based sales tax can even affect local businesses like furniture stores and pizza shops that might deliver outside the county they are located in.
Check Out These: States With No Sales Tax
Washington State Property Tax
The effective state property tax in Washington state is 1.083 percent. For a home in Washington state that is assessed at $250,000, the average annual property tax would be $2,707.50. Each county sets its own property tax rate and might have different rates for different areas in the county.
Washington State Estate Tax and Inheritance Tax
For 2018, the exclusion amount is $2,193,000. If the deceased’s estate is valued at this amount or less, there is no estate tax due. If the estate is valued at more than the exclusion amount, the tax brackets range from 10 percent to 20 percent of the amount of the taxable estate.
For example, if a resident of Washington state dies with an estate of $1,500,000, there would be no estate tax due because the amount is under the exclusion. The Washington taxable estate is zero. If, however, the deceased left an estate of $3,500,000, the estate tax would be based on a taxable estate amount of $1,307,000 (the total amount of the estate minus the exclusion). The tax would be $100,000 plus 14 percent of the Washington taxable estate greater than $1,000,000. So, $100,000 plus 14 percent of $307,000, or a total estate tax of $142,980.
Washington state does not have an inheritance tax. The Washington tax on assets passed on at death is an estate tax only. An inheritance tax is paid by the heir, while an estate tax is paid by the estate of the person who died before the assets are distributed to the heirs. In Washington state, there is an estate tax only, so the taxes are paid before the beneficiaries get the assets.
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