The Department of Revenue presented its November 2024 report on wealth taxes, telling the House Finance Committee that while the agency believes it could administer a wealth tax if the Legislature enacted one, the practical challenges—valuation of nonmarket assets, enforcement and evasion risk, taxpayer mobility, and uncertain revenue—are significant.

Steve Ewing, legislative and external affairs liaison for the Department of Revenue, said the report reviewed recent U.S. proposals and international experience and noted that wealth taxes generally tax the recurrent value of assets. DOR observed that Washington’s constitutional and tax code structure would likely require a wealth tax to operate in practice as a form of property tax and that many administration issues would hinge on asset valuation methods.

The department surveyed jurisdictions and received detailed responses from countries and Swiss cantons that administer wealth-style taxes. DOR found that valuing financial intangibles is straightforward when assets are publicly traded (stocks, bonds, mutual funds) but becomes difficult for nonmarket assets (closely held business interests, certain collectibles) and that many jurisdictions highlighted valuation and enforcement as top administrative challenges. Several countries have repealed national wealth taxes in recent decades; others continue to collect them. Respondents said evasion and compliance were recurring enforcement concerns and recommended electronic filing, robust audit resources, and careful statutory valuation rules.

Ewing said DOR believes it can administer a wealth tax if the Legislature enacts one but emphasized that the department would need clear statutory valuation rules, additional auditing and compliance capacity, and sound choices about what asset classes are included. Committee members asked about administrative costs and staffing and whether a wealth tax would duplicate capital-gains taxation; DOR replied that administration costs depend on the details of a proposal and that wealth taxes could apply to the same asset base that produces capital gains when sold.

DOR’s report appears in the committee’s electronic bill book and is intended to inform legislative discussion rather than propose specific statutory text.