ASA of Washington Opposes HB 2724/SB 6346 – Millionaire’s Tax Legislation!

The ASA of Washington works to improve the business environment in the construction industry and that’s why they strongly oppose HB 2724 and SB 6346, legislation to impose a 9.9% tax on income exceeding $1 million.

This legislation would create a complex impact on their members, who are small businesses, particularly those owned by individuals or families who earn over that threshold. Many construction subcontractors in Washington State are pass-through entities, such as S-corporations or LLCs, where the business’s income is passed through to the owner's personal tax return. This means that their members whose income exceeds the $1 million threshold could face higher tax liabilities. The potential for 9.9% income tax on their earnings could discourage reinvestment into the business or lead to restructuring to minimize the tax impact.

Additionally, their members who benefit from dividends, distributions, or capital gains that push their income above $1 million may also be subject to this new tax. This could reduce their ability to invest in business growth, hiring new employees, or expanding operations, which are typical goals for small business owners.

CA, MA, MN, NY, IL, RI, and CT are proposing similar legislation.