Washington enacted a 7% capital gains tax on long-term gains above $262,000 (indexed for inflation), effective 2022. It applies to gains from stocks, bonds, and business interests — but not real estate. For Seattle's tech workers with large RSU positions or stock sales, this adds a significant state-level obligation. We plan RSU vesting and asset sales around this threshold.

Washington's Business & Occupation (B&O) tax is a gross receipts tax — meaning it applies to your revenue with no deductions for expenses, cost of goods, or wages. Service businesses pay 1.5% of gross receipts; retailers pay 0.471%. Seattle also imposes its own business license tax. We calculate and file all B&O returns and advise on structuring to minimize exposure.

RSUs are taxed as ordinary income at vesting — your employer withholds federal and FICA taxes. Washington has no income tax, so there's no additional state tax on the vest. However, if you later sell the shares and realize long-term gains above $262,000, Washington's capital gains tax applies at 7%. Timing your sales around this threshold matters.

Potentially yes. California taxes income "sourced" to California — and if your employer is in California but your work is done in Washington, the sourcing rules determine how much (if any) income CA can tax. It depends on your employment agreement, where clients are located, and CA's specific sourcing rules. We analyze your situation and file the appropriate returns.