Engrossed Substitute Senate Bill 6346 creates a new Washington individual income tax chapter (codified as Title 82A RCW) and related changes. It imposes a tax on individuals' Washington taxable income beginning January 1, 2028 at a stated rate of 9.90 percent; the text frames the tax as limited to households with federal adjusted gross income of $1,000,000 or more. The bill also authorizes an electing pass-through entity tax at the same 9.90 percent rate effective January 1, 2028, with credit mechanics so participating owners receive a credit for entity-level tax. Revenues are directed to the state general fund to pay for expanded working families' tax credit provisions, sales and use tax relief, K‑12 school meal access, health care, higher education, human services, and related programs; the treasurer must deposit 5 percent of prior-year revenues annually to the Fair Start for Kids account beginning July 1, 2029. The act creates a city and county fiscal health account for future general-purpose transfers, adds many new definitions and allocation/apportionment rules for resident and nonresident sourcing (including special rules for professional and student athletes), and adds numerous statutory amendments across tax and retirement chapters. The bill makes substantive tax-law changes and administrative/procedural rules: it conforms Washington base income to the Internal Revenue Code as of January 1, 2026 with specified state additions and subtractions, establishes a $1,000,000 standard deduction per individual (combined for spouses/domestic partners), caps a charitable deduction at $100,000, allows specified credits (including limited credits for taxes paid to other jurisdictions and for certain B&O, public utility, capital gains, and pass-through taxes), and includes special deductions (wagering losses, capital construction fund deposits, cannabis-activity adjustments). It sets rules for estimated payments and filing (returns due with the federal return date, electronic filing and payment generally required, taxpayers must attach federal returns), prescribes interest, penalties, and a four-year assessment limitation with exceptions, and makes tax evasion a class C felony while knowingly failing to pay or supply required information is a gross misdemeanor. The act requires pass-through election mechanics, owner opt-outs, reporting and crediting of entity-level tax, and numerous allocation and apportionment mechanics (including a receipts factor approach and duty‑day methodologies), and directs the Department of Revenue to adopt rules, consult an advisory group, and report annually on administration costs starting January 1, 2028. The bill also amends many other statutes: it creates a refundable working families' tax credit with specified base refund amounts ($300–$1,200 by family size for 2023 and thereafter), phase‑down rules, verification and audit authority, and a public‑information campaign; it exempts sales and use tax on grooming and hygiene products, diapers, and over‑the‑counter drugs effective January 1, 2029; it imposes a temporary 0.5 percent surcharge on Washington taxable income over $250 million beginning January 1, 2026 (with enumerated exemptions and an expiration of December 31, 2029); and it preserves many public‑pension exemptions from most taxation while authorizing specified collections for child support and certain federal or court-ordered obligations. Important implementation details are not present in the extracted text: many cross‑referenced sections (including detailed computation formulas, some definitions, full lists of exemptions and credits, precise return and payment procedures, and named agency designations) were not included, so some operational and enforcement specifics remain unclear from the available material.

If enacted, Washington would start collecting a new income tax on high‑income individuals beginning tax year 2028 at a 9.90% rate on “Washington taxable income,” plus allow pass‑through entities to elect to pay a 9.90% entity tax starting the same date. The revenue is directed to expand K‑12 school meals and education, health care, human services, higher education, and to expand a refundable working families’ tax credit (fixed refund amounts set for 2023 and thereafter and indexed for inflation), with recurring transfers including 5% of annual collections to the Fair Start for Kids account and a new account to help city and county fiscal health. The act also creates a short‑term 0.5% surcharge on extremely large taxpayers (income over $250 million, effective 2026 and expiring end of 2029) and new sales/use tax exemptions for diapers, grooming/hygiene products, and many over‑the‑counter drugs beginning Jan. 1, 2029, which will reduce sales tax costs for consumers of those items while shifting revenue responsibilities to higher earners and large businesses. Taxpayers and administrators will face significant new choices and costs: million‑dollar households and nonresident earners with Washington‑source income are most directly affected by higher tax bills; owners of pass‑through entities must decide whether the entity or owners pay tax and handle elections and reporting; very large firms may pay the surcharge. All filers owing tax will face new filing, reporting, and electronic payment requirements, must attach federal returns and K‑1s, and be subject to expanded penalties and criminal provisions for evasion, increasing compliance burdens and potential audit risk. The Department of Revenue is directed to implement rules, run outreach, consult an advisory group, and report annually on administrative costs and staffing needs. Important technical details needed to calculate liabilities, exact transfer formulas, and some implementation dates are not included in the extracted text, so final tax liabilities and some operational effects remain uncertain.