Olympia, Washington - Washington Governor Bob Ferguson on Monday signed a bill into law establishing a Millionaires' Tax in the state.

"Adoption of the historic Millionaires’ Tax makes our tax system more fair, and means free meals for K-12 students, the largest tax break in state history for small businesses, eliminating the sales tax for baby diapers, and sending a check to nearly 500,000 working families to make life more affordable," Ferguson said in a statement.

Senate Bill 6346 establishes a tax on households with an annual adjusted gross income of $1 million or more. It is expected to apply to less than 0.5% of Washingtonians.

The money will be used, in part, to fund free breakfast and lunch for every K-12 public school student, an expansion of the Working Families Tax Credit, and affordable childcare investments.

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The sales tax on diapers, over-the-counter drugs, and hygiene products will be eliminated, while the B&O tax for small businesses will be reduced or eliminated.

"The Working Families Tax Credit made a real difference for my family, like many other parents," said Athena Dunn, a single parent of three. "Because of the stability, I've been able to stay on track with my education. I'm proud to say I'll be graduating this June with my bachelor's degree."

"Millionaires and billionaires got a huge tax cut from the federal government at the expense of working families. Here in Washington state, we took a historic step forward to rebalance an unfair system," Ferguson posted on X, referring to tax breaks for the wealthy in Donald Trump's so-called "One Big Beautiful Bill Act."

"Because of the hard work of so many on the Millionaires' Tax, it's a historic day for Washingtonians," the governor wrote in a separate post.