Like other tax lawyers, I frequently hear from people who want to keep a property in Washington but not be a Washington resident because they’re concerned about the Washington state tax environment. While Washington State has no general tax on wages, the state already taxes capital gains over $1 million and will tax all earnings over $1 million starting in 2028. Washington also has one of the most expansive estate tax programs in the nation.

Even when an individual is not a Washington resident, ownership of Washington property can result in substantial Washington estate tax. The state applies an apportionment formula that ties the estate tax directly to the value of property in Washington relative to the size of the overall estate. Non‑residency reduces Washington estate tax exposure but does not eliminate it.

A common misconception is that no Washington estate tax is due so long as Washington based property is below the Washington estate tax exemption, currently $3,000,000. That is not how the tax works. The exemption is applied once to the entire estate to calculate a hypothetical Washington estate tax, as if the person were a Washington resident. After that amount is determined, the tax is prorated based on the share of the estate that is tied to Washington. Here is an example of how even a relatively modest Washington property can produce a significant Washington estate tax where the overall estate is substantial. 

Sample Estate Illustration 

Washington Real Estate: $2,000,000
Non‑Washington Real Estate: $1,000,000
Intangible Assets (all Non-WA): $11,000,000
Total Overall Estate: $14,000,000

Assumptions:

• Decedent is not domiciled in Washington
• Washington estate tax exemption: $3,000,000
• Washington estate tax rates are progressive: 10-20%

Step 1: Hypothetical Resident Calculation (on July 1, 2026)

Overall Estate: $14,000,000 
Less WA Exemption: $3,000,000
Hypothetical WA Taxable Estate: $11,000,000 
Estimated Hypothetical WA Tax: $1,890,000

Step 2: Apportionment

WA Property ÷ Overall Estate = $2,000,000 ÷ $14,000,000 = 14.29% 

Step 3: Actual WA Estate Tax

Approximate WA Estate Tax: $1,890,000 x 14.29% = $270,081

Bottom Line

Moving out of Washington State may not eliminate Washington estate tax. Any Washington-based assets owned by a decedent (even those valued below the estate tax exemption) act as a hook, pulling a portion of a larger tax base into Washington’s reach.