Ocity Logo ocity
Official Tax Guide

Washington Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Washington state taxes. Income tax (0% (7% Cap Gains)), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

State Tax Guide 2025: Washington

Welcome to Washington! As you plan your move to the Evergreen State, understanding the tax landscape is crucial for your financial planning. Washington is unique in that it does not levy a traditional personal income tax, but it does have other significant tax structures to be aware of.

This guide provides an overview of Washington’s tax system for 2025.

1. Income Tax

Washington is one of the few states in the U.S. without a traditional personal income tax on wages.

  • Personal Income Tax Rate: 0%
    • Washington does not tax income from wages, salaries, tips, or self-employment at the state level.
    • Is it flat or progressive? Neither. Since the rate is 0%, there is no progressive tax bracket system for personal income.
  • Capital Gains Tax:
    • Washington imposes a 7% tax on long-term capital gains (profit from the sale of assets held for more than one year).
    • This tax applies to gains exceeding $270,000 for individuals and $540,000 for joint filers in 2025.
    • Note: This is technically an excise tax, not an income tax, under Washington state law. Primary residences are exempt from this tax.

2. Sales Tax

Washington has a state-level sales tax, but the total rate you pay is usually higher due to local additions.

  • State Sales Tax Rate: 6.5%
  • Local Sales Tax: Cities, counties, and special districts can impose additional sales taxes. When combined, total sales tax rates typically range from 8% to 11% depending on the location.
  • Groceries: Most grocery items (food for home consumption) are exempt from sales tax.

3. Property Tax

Property taxes in Washington are a primary source of revenue for local governments, including schools and fire districts.

  • Overview: While Washington’s property tax rates are generally lower than the national average, property values have risen significantly in recent years, which can impact annual tax bills.
  • Assessment: Property is assessed at 100% of its true market value.
  • Exemptions: Homeowners may be eligible for various exemptions, such as the Senior Citizens and Disabled Persons Property Tax Exemption, depending on income and age criteria.

4. Other Taxes

Beyond income and sales, Washington levies several other notable taxes:

  • Gas Tax: Washington has one of the highest gas taxes in the nation. As of 2025, the combined state and federal excise taxes are significant (typically over 50 cents per gallon, subject to change).
  • "Sin" Taxes:
    • Cannabis: Washington imposes excise taxes on retail cannabis sales (combined state and local rates can vary).
    • Alcohol & Tobacco: Excise taxes apply to alcohol and tobacco products, often baked into the shelf price.
  • Estate/Inheritance Tax: Washington has an estate tax with a relatively low exemption threshold compared to the federal government. For 2025, estates exceeding approximately $2.2 million (adjusted for inflation) are subject to tax, with rates ranging from 10% to 20%.

5. Retiree Taxes

Washington is highly tax-friendly for retirees.

  • Retirement Income: Social Security, pensions, and 401(k)/IRA withdrawals are not taxed at the state level.
  • Sales Tax Impact: While retirees avoid state income tax on their income, they will pay sales tax on goods and services, which is the primary consumption tax in the state.

6. Comparison to Neighbors

Here is how Washington compares to its immediate neighbors for 2025:

  • Oregon (West): Oregon has a progressive income tax (up to 9.9%) but no sales tax.
  • Idaho (East): Idaho has a flat individual income tax rate (currently 5.695% in 2025) and a sales tax rate of 6% + local taxes.
  • British Columbia (North): Canada has a progressive income tax system and a Goods and Services Tax (GST) plus Provincial Sales Tax (PST).

Summary: Washington sits in the middle. You avoid income tax on wages, but you will pay higher sales and gas taxes compared to some neighbors.

Disclaimer

Tax laws change frequently. The information provided in this guide is for general informational purposes only and is not a substitute for professional tax advice. Consult a CPA or tax professional regarding your specific financial situation.