It’s a fair question. And it deserves a serious answer.
For decades, Washington State has quietly been one of the best-kept secrets in high-net-worth financial planning. No income tax. No capital gains tax — (until 2022). No estate tax on assets under $3 million. For executives, founders, and investors who built their wealth here, the Evergreen State offered a rare combination: world-class amenities, a thriving economy, and a tax environment that let compounding do its job undisturbed.
That era is ending.
In March 2026, the Washington State Legislature passed Senate Bill 6346 — the state’s first-ever personal income tax — imposing a 9.9% levy on household income above $1 million, effective January 1, 2028. Combined with the state’s existing capital gains excise tax (starts at 7% on gains above $278,000) and increasing state estate taxes, Washington is now building a tax profile that demands serious attention from high-net-worth households.
I’ve been tracking this legislation from its earliest drafts, modeling the impact for clients across a range of income levels, estate sizes, and life circumstances. My background in both scientific analysis — I hold a PhD in Immunology from Washington University in St. Louis — and financial planning has shaped how I approach these questions: with data first, then judgment. This post is my attempt to share both.
This isn’t a reason to panic. But it is absolutely a reason to plan.
The New Math: How Much Are We Talking?
To understand what’s at stake, I want to walk through three realistic client profiles — composites drawn from the kinds of conversations I have regularly here in the South Sound and greater Puget Sound region. The numbers come from a Washington State Relocation Tax Estimator I built specifically for this purpose, which models income tax, capital gains tax, sales tax, property tax, and estate tax side by side across nine destination states. Please recognize that these scenarios are simplified, and are meant only for educational purposes. But if these numbers resonate with you, please reach out and let’s do an analysis using your own unique data so you can make an informed decision.
Profile 1: The Tech Executive
Annual income: $3,000,000 | Capital gains: $500,000 | Annual spending: $400,000 | Home value: $3,000,000 | Estate: $15,000,000
Under Washington’s current and incoming tax law, this household faces:
- Income tax (9.9% on income above $1M): $198,000/year
- Capital gains tax (9.9% on gains above $278K): $21,978/year
- Sales tax (~9.4% on spending): $37,600/year
- Property tax (~0.93% on home value): $27,900/year
- Total annual state tax burden: $285,478
Compared to Nevada — no income tax, no capital gains tax, lower sales and property tax rates — the same household would owe roughly $68,500/year in state taxes. The annual delta: approximately $217,000.
Over a 10-year planning horizon, before accounting for investment growth on the savings, that gap represents more than $2.1 million in cumulative tax liability. Against a modest $200,000 moving and transition cost, the break-even on a Nevada relocation arrives in under two years.
When I show clients this chart for the first time, the room gets quiet. These aren’t marginal numbers — they’re life-changing ones.
Profile 2: The Business Owner Approaching a Liquidity Event
Annual income: $1,500,000 | Capital gains: $2,000,000 (one-time business sale) | Annual spending: $300,000 | Home value: $2,500,000 | Estate: $20,000,000
For a founder selling a business in Washington, the capital gains exposure alone is striking. At 9.9% on gains above $278,000, a $2,000,000 capital gain triggers approximately $170,178 in Washington capital gains excise tax — in a single year.
A business owner who establishes legal domicile in Wyoming or Nevada before the liquidity event eliminates that liability entirely. On a $2,000,000 gain, that’s a six-figure one-time savings that comfortably covers any relocation costs.
This is a conversation I’d encourage any founder with a potential liquidity event on the horizon to have now — not in 2027. Timing matters enormously, and waiting until a deal is in term sheets is often too late to do the planning properly.
The estate picture adds another layer. With a $20,000,000 estate, Washington’s estate tax (which kicks in at ~$3 million with a top rate of 20%) generates an estimated $3,400,000 in estate tax exposure at death. No-estate-tax states like Nevada, Wyoming, Florida, or Texas carry a $0 estate tax obligation. For clients with estate planning as a priority, that difference alone often drives the relocation conversation.
Profile 3: The Long-Time Washington Family — Stay or Go?
Annual income: $1,100,000 | Capital gains: $300,000 | Annual spending: $250,000 | Home value: $3,500,000 | Estate: $8,500,000
This is the profile I find most emotionally complicated — and the one I encounter most often. A couple in their late 50s or early 60s. Deep roots in Washington. Kids grew up here. Grandkids nearby. Active in their church and community. They didn’t build their wealth to leave; they built it here. But the numbers are starting to ask a hard question.
Their income is more modest than the tech executive — a combination of portfolio income, Social Security, and some rental income from a property they’ve held for years. Their capital gains are modest and intermittent. What makes their case interesting is the home: a waterfront or view property in the South Sound or on the Eastside, assessed at $3,500,000. That alone generates $32,550/year in Washington property taxes.
Add the new income tax:
- Income tax (9.9% on income above $1M): $9,900/year
- Capital gains tax (9.9% on gains above $278K): $2,178/year
- Sales tax (~9.4% on spending): $23,500/year
- Property tax (~0.93% on home): $32,550/year
- Total annual state tax burden: ~$68,128
At first glance, that doesn’t look alarming compared to the executive profile. But here’s what does: their estate tax exposure. With an $8,500,000 estate — largely illiquid, concentrated in their home and a handful of investment accounts — Washington’s estate tax generates an estimated $1,100,000 in estate tax exposure at death. That’s a bill their children would face, likely requiring a forced sale of assets at the worst possible time.
In this case, the relocation math on annual income taxes may not justify a move on its own. But the estate picture often does — especially when paired with proactive gifting strategies, trust structures, or a longer-horizon plan that addresses both. This is exactly the kind of situation where the tax calculator is a starting point, not the whole story.
I’ve had this conversation with many families who thought their estate was “too small” to worry about. Washington’s $3 million exemption is the second-lowest in the country. You don’t need to be extraordinarily wealthy for this to become your family’s problem.
The States Worth Considering
Not all relocation destinations are created equal, and the right choice depends heavily on your specific financial profile. Here’s my take on each of the nine states I model most frequently for Washington clients:
Nevada consistently ranks as the most favorable pure tax destination for Washington residents. No income tax, no capital gains tax, no estate tax, and lower property and sales tax rates than Washington. Pacific time zone, proximity to Seattle, and a growing HNW community in Henderson and the Lake Tahoe corridor make it operationally viable.
Wyoming is the estate planner’s favorite. No income, capital gains, or estate tax, with exceptionally favorable trust and LLC laws. Jackson Hole has become a genuine lifestyle destination for Pacific Northwest families, not just a tax address.
Florida has long attracted Pacific Northwest executives and is popular for exactly this reason. No income or estate tax, and a warm climate — though hurricane risk and homeowner insurance costs deserve attention in some coastal areas.
Texas is often cited but deserves a closer look: property taxes averaging ~1.6% of assessed value are nearly double Washington’s ~0.93%. For a household with a $3,000,000 home, that’s roughly $48,000/year in property taxes versus $27,900 in Washington — a meaningful offset against income tax savings that our calculator specifically flags.
Montana is counterintuitive but worth understanding. It has no sales tax and favorable treatment of capital gains (an effective ~4.1% rate after the state’s 40% deduction), but its 6.75% flat income tax actually exceeds Washington’s new income tax structure for households earning below approximately $3.1 million — because Washington’s 9.9% only applies to income above $1 million, while Montana taxes all income. I find this surprises people almost every time. Montana looks like a tax haven until you run the actual numbers.
What the Numbers Don’t Capture
I want to be direct about something: the calculator is a starting point, not a conclusion. There are several factors that can dramatically change the analysis that no spreadsheet fully captures on its own.
Washington-source income doesn’t disappear at the state line. Under SB 6346, the income tax applies not just to Washington residents, but to nonresidents with Washington-source income. If you own a Washington S-corporation, LLC, or rental property after relocating, a portion of your income may still be subject to Washington tax. Careful entity restructuring may be needed before a move is complete from a tax perspective.
The constitutional question is real. Washington voters have rejected income tax proposals eleven times over the past century, and SB 6346 includes a “necessity clause” specifically to block a referendum. Legal challenges are expected and could delay or eliminate the tax entirely. Any planning should account for this uncertainty — moving for tax reasons before the courts weigh in carries its own risk.
Domicile is a facts-and-circumstances test, not a checkbox. Establishing legal domicile in a new state requires more than obtaining a driver’s license. Courts and tax authorities look at where you spend your time, where your “near and dear” belongings are, where your social and religious ties are centered, and where your business activities occur. For clients with deep Washington roots — families, businesses, community involvement — aggressive tax-motivated relocation requires careful legal guidance.
The three-year rule on estate tax. Washington’s estate tax includes a three-year lookback on gifts made before death. A relocation doesn’t immediately reset the estate tax clock, and clients with large estates should think carefully about timing.
My Perspective
I’ll be honest with you: I’m not going to tell you to move. Washington is home for most of the people I work with. Their businesses are here. Their families are here. Their faith communities, their friendships, their sense of place — all of it is here. I was born and raised in this region, and I understand deeply that a life is not a tax return.
What I will tell you is this: every high-net-worth Washington household should understand their specific exposure before 2028 arrives. Not in 2027. Now. The planning options available to you today — income timing, entity restructuring, gifting strategies, estate plan updates — narrow considerably as the effective date approaches.
For some clients, the numbers will be large enough to justify a genuine relocation analysis. For others, the answer will be proactive strategies that reduce Washington tax exposure without uprooting a life. For still others, the right answer may genuinely be to stay — and pay — with a clear-eyed understanding of what that costs and why it’s worth it to them.
All of those are valid outcomes. What I don’t recommend is arriving at January 2028 having never had the conversation.
I teach classes on financial literacy throughout the South Sound and work with families at every stage of the wealth-building journey. What I’ve found, consistently, is that the highest-cost financial decisions aren’t the ones where people chose wrong — they’re the ones where people chose late. This is a moment that rewards early engagement.
Let’s Get You Some Answers
The profiles above are illustrative, but your situation is unique. Income composition, estate structure, business ownership, charitable intent, and lifestyle factors all shape what this law means for you specifically — and the difference between a generic estimate and a careful analysis of your actual numbers can be significant.
I’ve spent considerable time building the analytical frameworks, running the state-by-state comparisons, and stress-testing the scenarios that come up most often in these conversations. When you sit down with me, you’re not starting from scratch. You’re getting answers that are grounded in real data and tailored to your household.
If you’re a high-net-worth Washington resident wondering what SB 6346 means for you — or if you have a liquidity event on the horizon, an estate that hasn’t been reviewed in a few years, or simply a nagging sense that 2028 is closer than it feels — I’d welcome the conversation.
Reach out to me directly at Kimball Creek Partners. The first conversation is always straightforward, and I’ll make sure you leave with clarity — whether that means a plan of action or simply peace of mind.
— Brock Bennion, Wealth Strategist, Kimball Creek Partners | Tacoma, WA
This post is for educational and informational purposes only and does not constitute tax or legal advice. Tax laws are complex and fact-specific. All figures are estimates based on simplified assumptions and statewide average rates. Consult a qualified CPA and estate planning attorney before making any residency or financial planning decisions. Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Kimball Creek Partners is not a registered broker-dealer or investment advisor.