The state’s leading trade organization for homebuilders is advising its members to meet with an accountant while staying abreast of legal challenges to the state’s recently adopted income tax. 

The Building Industry Association of Washington warned in a release that assertions by the tax’s proponents that it will only affect the wealthiest 20,000, or less than 1%, of the state’s nearly 3.2 million households is misleading.  

“Many builders could be exposed – especially those operating as LLCs or S-corps where business income flows to personal returns,” BIAW said in a statement. “A strong year – closing multiple homes or finishing a subdivision – could easily push income over $1 million, triggering the tax.” 

Homebuilders should meet with a CPA to discuss the structure of their business entity as well as income timing to avoid being impacted by the tax, the organization said. They also encouraged those in the industry to stay abreast of ongoing and potential legal challenges, including a recent request to the Washington Supreme Court to put a referendum on the tax on a future ballot.