Washington revenue forecasts yet to feel the effect of Jeff Bezos move
(The Center Square) – Earlier this month Jeff Bezos announced plans to move from Washington to Florida, but the seismic shift of potential tax dollars lost from his paying of the state's capital gains tax has yet to be felt.
The latest revenue forecast by the state Economic and Revenue Council shows a slight increase in projections for the upcoming biennium.
According to ERFC, the state is now expected to generate $66.8 billion for the 2023-25 biennium, a $191 million increase from the September forecast. Much of that unanticipated revenue comes from the state sales tax and the business and occupation tax.
Incidentally, the ERFC forecast update showed a bump in forecasted estate taxes, but noted a decrease in forecasted real estate excise tax, as well as the capital gains tax. A presentation on the ERFC report at the council's Monday meeting states that “consumer spending, labor productivity are stronger than expected,” but also highlighted ongoing high inflation.
Regarding Bezos’ effect on state revenues, the question isn’t whether or not it will impact state tax revenue, but by how much. According to a Tax Foundation article by Jared Walczak, Bezos sold $15.7 billion worth of Amazon stock between 2020-2021, before the capital gains tax took effect.
“If we assume that Bezos – who, other than the symbolic purchase of one share last year, has not purchased any shares of Amazon in decades – had held onto these shares since the IPO, he saved nearly $1.1 billion in taxes by selling those shares before the new state capital gains tax went into effect,” Walczak wrote. “Whether or not it was a motivating factor, relocating to Florida ensures that future sales won’t be subject to Washington’s new capital gains tax, either.”
Bezos’ departure is also expected to have implications for projected revenue from a wealth tax, a proposal considered this year by the state Legislature. Senate Bill 5486 sponsored by Sen. Noel Frame, D-Seattle, would have enacted a 1% tax on financial intangible assets in excess of $250 million. The bill received a public hearing in the Senate Ways & Means Committee but did not advance.
In an email to The Center Square prior to the council’s Monday meeting, ERFC Chair Lynda Wilson, R-Vancouver, wrote, “I have no doubt there will be an affect in the amount of revenue that the state receives because Mr. Bezos is leaving the state regarding the capital gains income tax. We know he owns a lot of stock. However, how much can’t be known at this time. But, it certainly draws a new level of attention to the capital gains income tax and the other new taxes, like the wealth tax that the majority party is considering.”
In a press release put out following the meeting, she wrote that "in light of today’s forecast, I see no legitimate reason for anyone to talk about new taxes in the upcoming session.”
Newly appointed ERFC member Chris Corry, R-Yakima, wrote in an email to The Center Square, “I believe there will be a considerable impact on the fiscal assumption for the proposed wealth tax legislation.”
Brett Davis contributed to this report.
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