A growing number of business owners in Washington state are indicating that they are either relocating operations or considering leaving altogether, citing an increasingly challenging economic environment marked by rising taxes and regulatory costs.

Recent survey results from the Association of Washington Business show that nearly one in six businesses is planning to leave the state, with nearly half of respondents reporting flat performance and widespread pessimism about the local economy.

The AWB winter quarterly survey, based on responses collected in January and February 2026, revealed that 17 percent of business leaders say they are planning to relocate their companies out of state, more than double the share reporting this intention a year earlier.

Owners also expressed concern about Washington’s tax burden — including recent business and occupation tax increases, a new surcharge on large firms, higher capital gains and estate taxes, and expanded sales tax on services — as the most significant challenge facing their operations.

Business leaders also noted that nearly half of firms are more likely to expand outside Washington than within it, a reversal from prior years, and that rising costs associated with health care, regulation and inflation are compounding pressures on growth and competitiveness.

Many owners said they are considering moving their personal residences as well, reflecting broader anxiety about long-term prospects for both families and firms in the state.

Independent reports and owner accounts further illustrate these dynamics.

Small businesses have been forced to close after tax expansions, with owners pointing to a recent $9 billion state tax package — including broadened retail sales tax to digital services and higher business taxes — as a contributing factor for unsustainable operating costs.

One Redmond entrepreneur, after more than a decade in business, cited the cumulative tax burden as a key reason for shuttering his company.

Economic observers say these trends reflect deeper concerns within Washington’s business community about the state’s fiscal policies and competitiveness relative to other states.

While policymakers argue that expanded revenues are necessary to fund public services and address budget shortfalls, business owners warn that the current trajectory could drive capital, jobs and talent to lower-cost environments.

Stakeholders on both sides continue to debate changes that might stabilise the business climate without undermining essential state services.

The situation poses a significant test for Washington’s economic strategy as lawmakers prepare for further tax and budget negotiations in the coming legislative session.