Washington state Gov. Bob Ferguson signed SB 6346 on March 30, 2026. The legislation, known as the “millionaires’ tax” will impose a 9.9% annual tax on personal income over $1 million on Washington residents beginning in 2029. 

“This tax potentially adds a significant layer of complexity to liquidity planning, succession strategies, and long-term wealth stewardship,” said Mike Whitmore, Aldrich’s Spokane Office Managing Partner. “Even though implementation is projected for 2029, business owners and high-net-worth individuals need to understand how income will be defined, how it will flow through to pass–through entities, and how state and federal rules will interact.” 

Prior to signing, Washington was one of just nine states without a state personal income tax. While legal challenges are expected, this law will introduce a new layer of state-level income taxation for certain high earners that could require significant planning for business owners and high-net-worth (HNW) families. 

Aldrich recommends the business owners and HNW individuals and families start with these three considerations when evaluating this change. These steps can help provide an initial framework for evaluating how potential changes could affect current decisions and long-term planning strategies. 

1. Understand the Potential Impact on Your Specific Situation 

For Washington’s business owners and affluent families, the focus should quickly move to how the new state tax could affect liquidity planning, business transitions, and long-term wealth decisions.  

• This new tax could influence the timing of income, major transactions, and liquidity events.  

• For business owners, especially those considering a sale, recapitalization, or succession event, it adds another layer to planning across business and personal finances.  

• Owners of pass-through entities may also face added planning considerations if the law takes effect. 

• For HNW families, it may affect decisions regarding cash flow, investment strategy, and future wealth transfers. 

“For many business owners, the key question is not just whether the tax may apply, but how it could affect timing, income recognition, and planning options,” said Whitmore. “The law includes Washington-specific deductions, credits, and an elective pass-through entity tax regime, so planning conversations now could create more flexibility later.” 

2. Align Planning With Long-Term Goals 

Changes in tax policy can influence exit timing, estate planning, charitable giving, and post-transaction wealth management. The right response is not to let tax headlines drive decision-making, but to revisit long-term goals and make sure tax planning supports them. 

“This law reinforces the importance of proactive, holistic planning,” said Nicole Rice, Chief Growth Officer at Aldrich Wealth. “Tax strategy should support broader financial and life goals, not dictate them. When investment strategy, estate planning, risk management, charitable giving, and cash flow planning are aligned, families are better positioned to respond thoughtfully to changes in Washington tax law.” 

3. Reassessing Business Transitions

Owners considering a sale, merger, or generational transfer in the next several years may want to revisit timelines, transaction structure, estate plans, and post-transaction cash flow needs now, not at the point of transaction. Earlier planning creates more options and more time to coordinate across advisors. 

“Exit planning should start 5–10 years before a transaction, and this law may change the math around timing, structure, and net proceeds,” said Brian Andreosky, President of Aldrich Capital Advisors. “Now is a good time to reassess how you are building value, structuring the company, and approaching succession so your transaction strategy supports both your business and personal financial goals.” 

This tax could significantly affect the net outcome of a sale, merger, or generational transfer. Owners considering a transition in the coming years may want to review: 

• Exit timelines and succession plans 

• Transaction structure and income recognition strategies 

• Estate and gifting plans 

• Cash flow and long-term investment strategy 

Rather than reacting to headlines, this is a good time to step back and ask a few important questions about how your current strategy supports your long-term goals. 

• Are my business and personal strategies aligned? 
• If I am considering an exit in 2028 or beyond, should I revisit timing or structure? 
• Have I considered how a major liquidity event could affect my broader financial plan? 
• Are my estate, gifting, and charitable planning strategies up to date? 
• Does my advisory team communicate across tax, transaction, and wealth planning? 

The impact of Washington’s millionaires’ tax is not isolated to a single decision.  

• It requires an integrated approach that connects how the tax affects your current business operations, informs your transaction strategy, and aligns with your long-term wealth plan.  

• By coordinating across these areas early, business owners and families can make more informed decisions and position themselves for better outcomes over time, consistent with a holistic planning approach.  

For more information, review our Washington Millionaire Tax Checklist: 5 Questions To Ask Now or connect with an Aldrich Wealth advisor.