The Washington State Department of Revenue (DOR) warned Wednesday that enforcing the state’s newly‑approved income tax will be a “significant lift” for the agency. The tax, set at 9.9% and exempting residents who earn less than $1 million annually, raises a host of practical questions about who truly counts as a Washington resident.
Defining residency under the new law
Senate Bill 6346, which codifies the tax, defines a resident as someone who is domiciled in Washington during the taxable year unless the individual either maintains no permanent place of abode in the state for the entire year, maintains a permanent place of abode outside the state for the entire year, or spends no more than 30 days in Washington in aggregate. The DOR’s senior assistant director of tax policy, Tim Jenrick, told an advisory group on August 24 that the agency expects to grapple with “a lot of issues” and must produce recommendations for the legislature quickly.
Legal experts emphasized that domicile is a “facts and circumstances” test that has been used for decades, meaning each case will involve a detailed look at where a person lives, works, and maintains ties. Brian Mahan, a partner at Hearst and Perkins Coie and the firm’s U.S. tax lead, warned that the test “will always be ambiguous.” He advised anyone seeking to sever Washington ties to “cut all your ties to Washington, including charitable contributions.”
Enforcement challenges and out‑of‑state comparisons
Robert Underhill, president and shareholder of Underhill McLaughlin Hanson Lindblom P.C., noted that Washington’s enforcement approach could be as aggressive as California’s, a state known for rigorous residency audits. He pointed out that Washington shares borders with two states that have no income tax or very low rates, which could complicate enforcement for residents who own multiple homes across state lines.
Many potential taxpayers own two, three, or even four residences, making the 30‑day rule a key factor. Underhill explained that most of his clients do not spend six months in any one location unless they have children enrolled in local schools, further blurring the residency picture.
Next steps for the advisory group
The DOR’s advisory group is required to submit two reports—one to the House Fiscal Committee and one to the Senate Fiscal Committee—by December. Those reports will contain recommendations on how to clarify residency criteria and streamline enforcement. The group’s work will shape the final rules that determine who must pay the tax and how the state will collect it.
Washington voters will decide later this year whether to keep the tax, as Initiative 645 seeks to repeal it. Regardless of the ballot outcome, the DOR’s preparations indicate that the agency is ready to implement a robust residency‑verification system should the tax remain in place.
Implications for Washington families
For families considering relocation or maintaining multiple homes, the pending guidance will be crucial. Understanding the domicile test and the 30‑day threshold can help parents protect their financial stability while complying with state law. The DOR’s emphasis on clear, timely guidance reflects a broader effort to balance revenue needs with respect for individual liberty and family decisions.
Original reporting: Clark County Today (Vancouver WA) — read the source article.
