Capital gains tax challenge heads straight to state’s Supreme Court

Jul 21, 2022
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Written by Washington Retail
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Earlier this year, a Douglas County Superior Court judge deemed the state’s new capital gains tax unconstitutional as it would only tax the wealthy, violating the state’s constitutional requirement for taxes to be levied uniformly across classes of property. Judge Huber, an Inslee appointee, ruled the 7% tax on gains over $250,000 a year is an income tax, not an excise tax, as the democrats had argued.

For the better part of a century, Washingtonians have rejected the idea of an income tax. As the new capital gains tax challenge goes before the State Supreme Court, the case could result in reversing that sentiment and open the door for the legislature to impose a graduated income tax—with a simple majority vote. Voters wouldn’t have the opportunity to approve the tax first with an amendment to the constitution.

On September 13, 1960, the supreme court issued a unanimous one-page ruling that if a graduated income tax is to be imposed in Washington, the court shouldn’t be asked to reverse its multiple rulings prohibiting it. Instead, our constitution would need to be amended.

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