NO to Washington State Senate Bill 6229
Follow along on the journey!
The Situation:The Washington State Senate has introduced SB 6229, a bill that effectively enters every Washington startup founder into the NCAA Transfer Portal.
The Play:The bill proposes to decouple Washington from Federal Section 1202, meaning the state will slap a 7% tax on startup exits that are federally tax-free. While the IRS grants founders a 100% exemption on Qualified Small Business Stock (QSBS) to reward the risk of starting a company, SB 6229 seeks to claw that money back at the state level starting in 2026.
Why this is a Fumble: The Scholarship is Gone: Section 1202 is the scholarship that recruits top talent and their supporting investor community to build risky ventures. Removing it puts Washington at a competitive disadvantage against ~45 other states that honor the federal exemption. NJ has already reversed this same tax because of brain drain to NY and PA.
Recruiting Violation: By passing this, Washington is actively recruiting for Texas, Tennessee, and Florida. These states are standing by with zero income tax and full 1202 protection, ready to sign the talent we are pushing away. Talent Drain: Just like in college football, your star players (founders and investors) have mobility. If the home team changes the deal, they will transfer to a program that wants them to win.
The Ask: Sign the petition to tell the Senate: Don’t open the Transfer Portal. Keep our star players in Washington. Vote NO on SB 6229 and keep Washington a top-tier program for innovation.
Testimony Date: TBD – I’ve requested to testify in person in Olympia.