January 13, 2015


State & Local Taxes in 2015


Washington Tax Code Features

Progressive Features

• Sales tax base excludes groceries

Regressive Features

• No personal income tax

• Imposes a gross receipts tax in lieu of a corporate profits tax

• Enacted a refundable Earned Income Tax Credit, but lawmakers have failed to provide funding for the credit,

• Comparatively high reliance on sales taxes

• Comparatively high combined state and local sales tax rate

• Comparatively high cigarette tax rate

• Fails to provide a property tax “circuit breaker” credit for low-income non-elderly taxpayers

Tax Changes Enacted in 2013 & 2014

• No significant developments

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Washington has the most unfair state and local tax system in the country. States with regressive tax struc­tures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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