Taxes in Redmond
Washington levies no individual income tax, but this record discloses the fuller, real, current picture directly relevant to Redmond's substantial Microsoft- and Nintendo-of-America-equity-compensated workforce: a real, legally settled capital gains excise tax (7% up to $1M in gains, 9.9% above), Redmond's real, high combined sales tax (10.4%), and King County's real, highest-in-Washington property tax rate.
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Learn moreNo State Income Tax -- A Real, Settled Fact
Washington levies no individual income tax, joining Texas, Tennessee, Florida, and Nevada among this project's no-income-tax states. This is a genuine, meaningful take-home-pay advantage for W-2 and self-employed earners alike, applying identically to Redmond and Bellevue residents.
Washington's Capital Gains Excise Tax Is Real, Current, and Directly Relevant to Redmond
Washington's capital gains excise tax -- enacted 2021, upheld by the Washington Supreme Court in 2023 -- taxes WA-allocated long-term capital gains at 7% up to $1 million in gains and 9.9% above that threshold, with the 9.9% top tier added by SB 5813 (signed May 20, 2025, retroactive to January 1, 2025). An annual standard deduction applies first ($278,000 for the 2025 tax year, inflation-adjusted). The $1 million top-tier threshold is NOT indexed for inflation, meaning more taxpayers cross into the higher tier each year -- a real, structural, and DIRECTLY relevant detail for Redmond specifically, given its real, substantial concentration of Microsoft (roughly 50,000 campus employees) and Nintendo of America employees, many of whom receive real, meaningful equity compensation. Real estate sold directly, retirement accounts, and federally QSBS-excluded gains are generally exempt.
A Genuinely Different Revenue Model From Other No-Income-Tax States in This Dataset
Unlike Texas or Tennessee's primarily sales-tax-driven revenue models, or Florida's property-tax-reliant one, Washington's real revenue structure is genuinely distinct: a real, high combined sales tax (Redmond's runs 10.4%), a real business and occupation (B&O) tax on gross business receipts (a genuinely different mechanic from a corporate income tax, indirectly affecting prices for Microsoft, Nintendo of America, and every other Redmond business), and now the real capital gains excise tax layered specifically onto high earners.
Redmond Combined Sales Tax: 10.4%
Redmond's minimum combined 2026 sales tax rate is 10.4%, raised from 10.3% in January 2026 -- composed of Washington's 6.5% statewide base plus a locally-cited 3.9% Redmond-specific component (King County and Sound Transit-related add-ons included). Redmond has two distinct sales tax jurisdictions with rates ranging from 9.0% to 10.4% depending on specific address, per one source, with 10.4% applying to the large majority of the city.
Property Taxes: Real and Genuinely High -- Pointer to Full Detail
Redmond/King County property taxes run genuinely high relative to Washington's own statewide average (the highest countywide effective rate in the state), covered in full on the property-taxes topic page rather than repeated here.
Key takeaways
- Washington levies no individual income tax -- a real, settled, meaningful take-home-pay advantage, applying identically to Redmond and Bellevue.
- Washington's real, current capital gains excise tax (7% up to $1M, 9.9% above) is DIRECTLY relevant to Redmond's real, substantial Microsoft (~50,000 campus employees) and Nintendo of America equity-compensated workforce.
- Washington's revenue model is genuinely distinct from other no-income-tax states -- a real combined sales tax, a B&O tax on gross receipts, and now the capital gains excise tax.
- Redmond's combined sales tax is 10.4% (raised from 10.3% in January 2026), composed of a 6.5% state base plus local add-ons.
- King County property taxes run genuinely high -- the highest countywide effective rate in Washington -- see the property-taxes topic page for the full detail.
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