On May 4, 2021, Governor Jay Inslee signed Senate Bill 5096 into law, creating a new individual excise tax of 7% on the sale or exchange of long-term capital asset gains if the gains exceed $250,000 annually.  This tax applies to individuals and beneficial owners (e.g., owners of long-term capital assets held by a pass-through or disregarded entity for federal tax purposes). 

The tax is imposed on long-term gains from the sale or exchange of capital assets such as stocks, bonds, business interests or other investments, and many tangible assets.  Accordingly, ordinary income, short-term capital gains, dividends, and interest are not included.

There are a handful of assets that are specifically excluded from this tax.  Most notable are real estate, assets held in retirement accounts, and interests in qualified family-owned small businesses.

The tax takes effect on January 1, 2022, and the first payment is due on or before April 18, 2023.  Only individuals owing capital gains tax are required to file a capital gains tax return, along with a copy of their federal tax return for the same taxable year.  Taxpayers who receive a filing extension for their federal income tax return are entitled to the same filing extension for their capital gains tax return. However, a filing extension does not extend the due date for paying the capital gains tax due.

At this time, the tax is being legally challenged. The possibility of a future initiative to modify or eliminate the tax remains possible.

Sources: 

https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax

https://www.seattletimes.com/seattle-news/politics/lawsuit-against-washingtons-new-capital-gains-tax-can-move-forward-judge-rules/