Gov. Bob Ferguson pushes for sales tax holidays, calls for diaper tax exemption
AI-generated summary reviewed by our newsroom.
- Ferguson seeks two sales tax holidays; items under $1,000 exempt
- Ferguson urges diapers and baby products be added to tax exemptions
- Plan directs $1B of ‘millionaire tax’ revenue to small business tax relief
Washington could be getting two new sales tax holidays if Gov. Bob Ferguson gets his way.
Ferguson delivered his pro-holiday pitch Feb. 17 when discussing Senate Bill 6346, a hot-button proposal to impose a 9.9% income tax on people and households earning more than $1 million a year. The first-term Democrat called for the legislation in December, which the majority party has nicknamed the “millionaires tax.”
After the Senate rolled out its initial proposal earlier this month, Ferguson said it was a “good start” but that it didn’t do enough to deliver tax relief for working families and small businesses.
On Feb. 16 the upper chamber voted 27-22 to pass a version of the bill that included an amendment to repeal an expanded retail sales tax on services, with the exception of advertising services, that Democrats passed last year. Three Democrats voted against the bill Feb. 16: senators Deb Krishnadasan of Gig Harbor, Drew Hansen of Bainbridge Island and Adrian Cortes of Battle Ground. Otherwise, the vote was along party lines.
Ferguson told reporters during a Feb. 17 news conference that the Senate’s latest version still doesn’t go far enough in making life more affordable.
One way of getting more tax relief, he said: creating sales tax holidays. He proposed a two-day holiday and a three-day weekend during which no sales tax would be charged on items less than $1,000, he said, putting about $141 million back in Washingtonians’ pockets annually.
Washington would join 18 other states with such holidays, he said. An example: Some places will host a back-to-school weekend holiday for parents to buy clothes and school supplies for their kids, he added.
“Sales tax hits Washingtonians hard, because it’s the same for everybody, regardless of your ability to afford it and pay for it,” Ferguson said.
Senate Democrats had proposed nixing the sales tax on hygiene products like deodorant, and Ferguson said that diapers and baby products should also be in the mix. Republican Sen. Nikki Torres of Pasco introduced an amendment to exempt diapers from that tax during the floor debate Feb. 16, but her Democratic colleagues shot it down.
Ferguson defended the income tax proposal against critics’ concerns, arguing that it would apply to less than 0.5% of Washingtonians while helping millions of other residents. He said he’s heard from people, as well as small businesses, complaining that life is too expensive, adding: “We need to be laser-focused on making life more affordable for them.”
The governor wants to see $1 billion of the more than $3 billion in annual revenue generated by the proposal to give small business owners a tax break. That would mean significantly boosting the small business tax credit, effectively canceling out the business and occupation tax on the first $2.5 million in total revenue for that business, he said.
If adopted, 170,000 small businesses would no longer be on the hook for the B&O tax while 30,000 businesses would see their tax decreased — translating to about $5,000 a year in savings, he said.
In addition, Ferguson wants to beef up the Working Families Tax Credit, which offers tax relief for low- and middle-income residents. He called for an expansion to the program in terms of how many families qualify and the dollar amount that they’d receive.
About 350,000 low-income families are currently eligible for the credit and get between $300 and $1,300 from the state, he said. Ferguson’s proposal would lead another 460,000 households to qualify and hike the rebate amount by 30%.
SB 6346 will now be considered in the House, which will mull implementing Ferguson’s asks and possibly include other changes. Lawmakers in both chambers would then need to agree on a compromise before the measure could head back to Ferguson’s desk.
Time is running out in the 2026 session. March 12 is the final day.
House Speaker Laurie Jinkins, a Tacoma Democrat, has advocated for the income tax.
“This is a place where the people and the governor and the Legislature are well-aligned,” she said Feb. 16, according to the Washington State Standard. “We’ll keep working on the details.”
This story was originally published February 18, 2026 at 5:30 AM with the headline "Gov. Bob Ferguson pushes for sales tax holidays, calls for diaper tax exemption."
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