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Proposal to tax QSBS capital gains draws sharp pro‑con testimony from tax experts and tech sector
Summary
House Bill 2292 would subject capital gains from Qualified Small Business Stock (QSBS) to Washington’s capital gains tax for sales after Jan. 1, 2026; budget and equity advocates supported the move to close a regressive loophole, while tech founders, startup groups and trade associations warned it could chill venture financing and founder retention.
House Finance Committee members heard Jan. 27 on House Bill 2292, which would bring capital gains from Qualified Small Business Stock (QSBS) — a federal tax exclusion that can shelter gains from some C‑corporation stock sales — under Washington’s capital gains tax for sales occurring on or after Jan. 1, 2026.
Tracy Taylor, committee staff, outlined the QSBS background and the Department of Revenue’s preliminary fiscal estimates: staff said the measure would affect a small number of taxpayers and could increase state revenues modestly (the fiscal note projected roughly $1.2 million for fiscal year 2027 and about $1.1 million for…
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