790 millionaires who live in Spokane-area legislative districts will pay new Washington income tax. Will some try to move away?

Coeur d'Alene real estate agent Michael Wendland in recent weeks has seen a "major influx" of wealthy Washington residents considering a move to Idaho.

The reason? New laws adopted by the state Legislature, including a new 9.9% income tax on millionaires, have prompted some residents to consider moving across the border in search of lower taxes. Wendland said he's received about a dozen phone calls in the last three weeks from people seeking more information about the move.

"I'm one Realtor out of 2,400 Realtors," Wendland said. "And the general consensus is, among the real estate community, is that we have all been fielding the phone calls and getting the inquiries of people from the West Side looking to move this way."

This spring, the Washington Legislature approved a 9.9% tax on income for joint filers or individuals of more than $1 million starting in 2029, with the money used to cut other kinds of taxes, as well as boost spending.

The tax is estimated to bring in around $3.5 billion each year .

Supporters cite many of the provisions - including an expansion to the Working Families Tax Credit, universal free school meals for K-12 students, sales tax exemptions on diapers and over-the-counter medicine, and cuts to small business taxes - as key pieces of tax relief included in the bill to balance out the state's tax code. The Working Families Tax Credit is a rebate for low-income families of $50 to $1,330 a year meant to reimburse them for sales taxes.

Opponents of the tax have argued that its implementation will motivate wealthy residents with the means to do so to move out of state and opens the door for the Legislature to expand the income tax to less wealthy people in the future.

Data from the Department of Revenue projects the tax will bring the state just under $3 billion from 20,791 residents, with most of the money collected from wealthy areas in Seattle and the greater Puget Sound area. According to the data, 790 taxpayers from the five legislative districts that represent Spokane County - the 3rd, 4th, 6th, 7th and 9th - would pay a total of $96.3 million.

The 2,660 residents from the 41st district - which represents Mercer Island, Bellevue and Sammamish - would pay the most of any legislative district in the state at $325.3 million. Residents in the 43rd legislative district - which represents downtown Seattle and neighborhoods including Capitol Hill, South Lake Union and University District - would pay the second most at $260.5 million.

Lucy Dadayan, a principal research associate at the Urban-Brookings Tax Policy Center, previously told The Spokesman-Review in an interview that Washington is not the first state to try to tax higher-income earners. However, Dadayan said there "is not clear evidence" that taxes in other states have served as a motivation to move.

The research, she said, showed that those who relocated tended to move between states and areas with higher tax rates, such as New York, California and Washington, D.C., rather than to places with low or no income tax.

"The reason is very simple, because what matters is another host of issues such as business opportunities, work demand, as well as the family and quality of life of the state," Dadayan said. "Not just the tax alone."

But according to Wendland, the legislation is among several new laws passed in the state that have prompted some residents to consider a move across the border. Idaho has a flat 5.3% income tax with a standard deduction of $16,100 for single filers and $31,500 for joint filers.

"There are a lot of people moving from the West Side this way," Wendland said. "That's what we're seeing, a major influx of right now."

Following Washington's legislative session, Sen. Shelly Short, R-Addy, said in an interview that the income tax was "unnecessary" and could face obstacles in the court system and at the ballot box.

Short, whose district borders Idaho, said she's heard from residents in Pend Oreille and Stevens counties who have moved out of state due to the tax.

"We've had folks move," Short said. "And sometimes it's because of the income issues, but it's also the regulatory environment."

Sen. Mark Schoesler, R-Ritzville, said it's an "open secret" that some people from Whitman and Asotin counties have moved to Idaho due to the tax as well as the state's capital gains and estate taxes.

Schoesler said they are also drawn to the appeal of a cheaper cost of living, including cheaper gas, and they "just really feel forgotten in Olympia."

"Their competition in King County is Pierce and Snohomish," Schoesler said. "In my three border counties, it's Idaho."

In an interview Friday, state Sen. Marcus Riccelli, D-Spokane, said once implemented, the tax would be paid by about 200 of the 160,000 people he represents, and would help balance the district's needs and put the state in a "more sustainable structure."

Riccelli said he doubts many folks would move to Idaho as a result of the income tax on millionaires - especially to a state that has a income tax that also taxes a person's first $1 million in income.

"I think our quality of life is good; I think our schools are better," Riccelli said.

Riccell said while lawmakers need to do a better job of explaining some of the tax relief for small businesses in the county, he's also sensitive to Spokane County's status as a border community and is open to seeing what impact the tax may have once it's implemented.

"But kind of the anecdotal - if I'm a real estate agent in Coeur d'Alene, I'm going to be talking about all of the people coming," Riccelli said. "Let's see how this proves out."

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