How is crypto taxed in Washington State?

Washington State crypto tax works differently from most states because Washington has no general income tax. Instead, crypto sold at a profit after more than a year can fall under the state's capital gains tax, which is legally an excise tax on the sale of long-term capital assets. Federal tax still applies in full, as explained in how crypto is taxed in the US.

Does Washington tax crypto gains?

Sometimes. The Department of Revenue says cryptocurrency is intangible property for the capital gains tax. A gain is generally taxable if the crypto was held for more than one year and the seller was domiciled in Washington at the time of the sale. Gains on crypto held a year or less are outside this tax, because it applies only to long-term capital assets.

Only individuals owe it. Businesses do not, but owners of pass-through or disregarded entities, such as a single-member LLC, can owe it on gains those entities realize. Assets in retirement accounts such as 401(k)s and IRAs are exempt.

How does the Washington State capital gains tax apply to crypto?

The first slice of long-term gains is covered by a standard deduction, which is adjusted for inflation each year. It was $270,000 for 2024 and $278,000 for 2025, per individual or couple. Taxable gains above that are taxed at 7%.

A law passed in 2025 (ESSB 5813) added a second tier. From tax year 2025, the first $1 million of taxable Washington capital gains is taxed at 7%, and the amount above $1 million at 9.9%. The return is due the same day as the federal return, payment is typically due April 15, and filing is electronic. A credit can apply if another jurisdiction taxed the same gain.

Is there a Washington excise tax on crypto transactions?

Not on buying or holding crypto. A 2019 Department of Revenue interim statement said individuals who buy and sell bitcoin as an investment generally owe no business and occupation (B&O) tax on their gains, because of an investment deduction. Financial businesses cannot use that deduction.

Businesses are treated differently. A seller who accepts bitcoin for goods or services owes sales and B&O tax on the dollar value of the bitcoin on the sale date. Mining rewards and fees fall under the service and other activities B&O classification. For more, see is there sales tax on crypto and how crypto mining is taxed.

Will Washington tax crypto income in the future?

Possibly. Governor Bob Ferguson signed SB 6346 on March 30, 2026, a 9.9% tax on income above $1 million, effective January 1, 2028, with first payments due in April 2029, according to the law firm Morgan Lewis. Voters rejected Initiative 645, which would have repealed it, in November 2026, but a constitutional challenge is still in the courts as of November 2026. Other states are compared in do states tax crypto.

Rules differ by state and change often. Check the tax authority or a qualified professional for your own situation.