Washington state’s leading small business association announced in a news release Tuesday its support of Initiative 645, which would repeal the new state income tax.
“Wall Street gets a pass while Main Street gets a tax,” Patrick Connor, state director for the National Federation of Independent Business (NFIB) in Washington, said in the release. “The state’s new income tax specifically targets small business owners who report business earnings and expenses on their personal income tax returns, while completely exempting big businesses and other full c-corporations. That’s just one of the reasons why we’re supporting I-645 to stop the new state income tax.”
During the legislative session, 98% of NFIB member small-business owners polled were opposed to the bill creating the so-called “millionaires’ tax,”which would tax annual revenue above $1 million at 9.9%, though that threshold can be lowered by future Legislatures.
NFIP noted that the new $4 billion yearly income tax was passed in addition to a $9.5 billion suite of tax increases on businesses the Legislature approved in 2025.
Small business owners from across the state shared their concerns about the impact of the new tax on their ability to provide raises and enhance benefits for employees, purchase new equipment, expand operations, add jobs and remain competitive with businesses in other states, the news release stated, adding that some are considering moving their operations out of state.
“We’re already losing customers to Idaho due to Washington’s high cost of living and cost of doing business,” Paul Agather, of Parts Wholesalers, Spokane, said in the release. “This new income tax puts us farther behind our competitors across the state line and will drive even more business out of Washington.”
