Washington Governor Expected to Sign State Income Tax, Sparking Legal Challenges

Opponents gear up to fight new tax on income over $1 million as state prepares for potential impact on NBA expansion team

Mar. 19, 2026 at 8:22pm

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Washington Governor Bob Ferguson is expected to sign a new state income tax bill within the next 20 days, despite opposition from Republican lawmakers who are preparing legal challenges. The tax on income over $1 million is projected to raise $3-$4 billion annually for education, tax relief, and the general fund. However, critics argue the tax could drive away businesses and high-earning individuals, including potential NBA players, and are planning initiatives to overturn the law.

Why it matters

The passage of a state income tax in Washington is a significant political and economic development, as the state has long resisted such a tax. The legal battles and potential impacts on the state's business climate and ability to attract an NBA franchise will be closely watched.

The details

The income tax bill (SB 6346) was passed by the Democratic-controlled state legislature and is expected to be signed by Governor Ferguson within the next 20 days. The tax will apply to income over $1 million and is projected to raise $3-$4 billion annually. However, Republican lawmakers and other opponents are gearing up for legal challenges, arguing the tax is unconstitutional. They believe the left-leaning state Supreme Court may rule in favor of the tax, but expect lower courts to initially block it. Opponents are also considering a citizen initiative to overturn the tax. Additionally, there are concerns the tax could impact the state's ability to attract an NBA expansion team, as high-earning players would be subject to the tax.

  • Governor Ferguson has 20 days from the time of delivery to act on the legislation, meaning it will likely be signed before April 2, 2026.
  • The tax on income over $1 million is set to take effect on January 1, 2028, with the first payments due in 2029.
  • The NBA is expected to hold a vote at the board of governors meetings next week to explore adding expansion teams in Seattle and Las Vegas, with the new franchises targeted to start play in the 2028-29 season.

The players

Bob Ferguson

The governor of Washington who is expected to sign the state income tax bill into law.

John Braun

The Republican Senate Minority Leader who expects legal challenges to the income tax law.

Chris Gildon

A Republican state senator who believes the income tax could impact the NBA's decision to locate a franchise expansion team in Seattle.

Shelly Short

A Republican state senator who is hearing concerns from her constituents about the impact of the income tax on small businesses.

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What they’re saying

“I wouldn't be surprised if there's a couple legal challenges. The legalities are very, very obvious to anyone who wants to take the time to read the Constitution.”

— John Braun, Senate Minority Leader

“I think they believe they have an opening because of the nature of the State Supreme Court. Can't go in too much of this topic, but it is interesting that we have so many state Supreme Court members up for reelection this fall. That certainly adds a new, and interesting dynamic.”

— John Braun, Senate Minority Leader

“I wouldn't say so much as if the team comes here, but I would say, which players decide to come to that particular team, right? Because almost all of those players are going to make north of a million and they're going to be subject to the income tax, and they're going to be calculating what their net income is going to be.”

— Chris Gildon, State Senator

What’s next

The judge in any legal challenges to the income tax law will decide on whether to allow the law to take effect as scheduled on January 1, 2028. The NBA is also expected to make a decision on expansion teams in Seattle and Las Vegas at its upcoming board of governors meetings.

The takeaway

The passage of a state income tax in Washington has set the stage for a major political and legal battle, with opponents vowing to fight the law in court and through citizen initiatives. The outcome could have significant implications for the state's business climate and its ability to attract high-profile investments, such as an NBA expansion team.