The Washington State Senate voted 38-11 on February 16, 2026, to pass Senate Bill 6347, a measure that would roll back the estate tax rate increase the legislature approved just a year earlier. If it clears the House and is signed into law, the bill would cut Washington's top estate tax rate from 35%, currently the highest of any state, back down to 20% for deaths occurring on or after July 1, 2026. The bill now moves to the House.
What changed
Washington raised its estate tax substantially just last summer. Senate Bill 6347 would reverse that increase, moving every bracket above $1 million back to where it stood before July 1, 2025. According to the Washington Department of Revenue's published tables, the rate on a taxable estate above $9 million would drop from 35% back to 20%, and the brackets in between would fall as well: 15% becomes 14% on the second million of taxable estate, 17% becomes 15% on the third, and so on up through a 30% bracket on $7 million to $9 million that reverts to 19.5%. The bill leaves the $3 million per-person exemption in place for deaths after July 1, 2026, but stops it from rising with inflation going forward, because the restored language points back to a discontinued Seattle-area consumer price index rather than a working one.
Who is affected
Washington has no tax on wage income, so for many of the state's affluent households the estate tax, alongside the capital gains tax, is one of the largest state-level tax exposures they face. Estates below the $3 million exemption owe nothing under either version of the law. The rate cut matters most to families whose Washington taxable estate clears $9 million, since that is where the largest bracket differences apply; more modest taxable estates in the $3 million to $9 million range see smaller, but still real, reductions at every step. Because the federal exemption is far higher than Washington's, many households that owe nothing to the IRS still owe a substantial amount to the state, which is why the bracket schedule below matters even for families who consider themselves comfortable rather than ultra-wealthy.
The after-tax math
Example, using round numbers: a Washington resident dies with a $12 million gross estate, leaving a $9 million taxable estate after the $3 million exemption. Under the schedule in effect for deaths between July 1, 2025 and June 30, 2026, the Department of Revenue's own tables put the tax on a $9 million taxable estate at $1,930,000. Under the schedule SB 6347 would restore for deaths on or after July 1, 2026, tax on that same $9 million taxable estate falls to $1,490,000, a difference of $440,000 that would pass to heirs instead of the state treasury. Above $9 million, the gap widens further because the marginal rate on every additional dollar drops from 35 cents to 20 cents.
| Washington taxable estate | Tax under current (35% top) schedule | Tax under SB 6347 (20% top) schedule |
|---|---|---|
| $9,000,000 | $1,930,000 | $1,490,000 |
| $12,000,000 | $2,980,000 | $2,090,000 |
Moves to discuss with your advisor
Households in the middle of updating a Washington estate plan may want to hold off finalizing formula-driven trust language until the bill's fate, and its exact effective date, are settled, since a plan drafted around the 35% schedule could allocate assets differently than one drafted around a 20% schedule. The timing detail that deserves the most attention is the July 1, 2026 cutoff: a death in the first half of 2026 would still be taxed under the current 35% brackets with a slightly higher, inflation-adjusted exemption of $3,076,000, while a death on or after July 1 would fall under the lower rates but the flat $3 million exemption. Families with large gifting or trust-funding plans already underway may want to confirm which schedule applies before assuming the cut is in place.
What to watch
SB 6347 still needs House approval and the governor's signature before it becomes law, and Washington's legislature has moved quickly on estate tax changes before. Also worth watching is the frozen exemption itself: because SB 6347 does not fix the broken inflation index, the $3 million figure could stay flat indefinitely unless a future bill addresses it, a detail that plans built for automatic increases will need to account for.
Sources
- First reported SB 6347 - Undoing certain changes to the estate tax — Washington State Legislature
- Is Your Inheritance Safe? Washington Cuts Estate Tax in 2026 — Kiplinger
- Washington Enacts Millionaires' Tax, Changes to Estate Taxation — BDO
- Estate tax tables — Washington State Department of Revenue
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
