Washington State Imposes New Taxes on Tech Giants, Broadly Affecting Industries

Washington state has passed new taxes targeting tech companies like Amazon and Microsoft, as well as nearly every industry, to raise over $9B in revenue over four years. The tax changes are expected to have a broader impact, adding extra costs for businesses and potentially hurting startups and small companies, with some warning of unintended consequences and a "tipping point" for businesses in the state.

Washington state has enacted a series of tax increases aimed at raising over $9 billion in revenue over the next four years. The new taxes, passed by Democratic lawmakers, target various industries, including tech companies like Amazon and Microsoft, as well as businesses across the state. These measures are intended to address a projected $16 billion budget shortfall.

The tax package includes several significant bills, such as House Bill 2081, Senate Bill 5814, and Senate Bill 5813. House Bill 2081, for instance, permanently increases the state’s business and occupation tax rates and adds a temporary 0.5% surcharge on companies with more than $250 million in annual taxable income. Senate Bill 5814 expands the retail sales tax to a broader range of digital and professional services, while Senate Bill 5813 adds a progressive rate structure to the capital gains tax.

These tax increases are expected to have a broader impact, adding extra costs for businesses and potentially hurting startups and small companies. Some business and tech leaders have expressed concern about the potential economic consequences, warning that the new taxes could drive businesses out of the state. The proposals represent "the largest tax increase in Washington state history to essentially cover unsustainable spending growth," according to Rachel Smith, president and CEO at the Seattle Metro Chamber.

The new bills are headed to Governor Bob Ferguson for review. He has stated that he plans to "carefully review all revenue increases" over the next few weeks. A bill can become law without his signature if he does not act to veto it.

Reference List:
[1] https://washingtonstatestandard.com/2025/04/28/five-tax-bills-lawmakers-passed-to-underpin-washingtons-next-state-budget/
[2] https://www.geekwire.com/2025/is-washington-still-the-best-place-to-do-business-new-taxes-spark-concern-and-fear-from-tech-leaders/

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