Capital-gains tax struck down by Douglas County court

Mar 3, 2022
Written by WR Communications

A Governor Inslee-appointed Superior Court Judge, Brian Huber, supported his decision to strike down the 7% capital gains tax in part because it violated the state constitution’s uniformity requirement for taxes.

On the final day of the 2021 Legislative session, Senate Bill 5096 was passed, which created a 7% tax on an individual’s capital gains of assets, such as stocks, bonds, and other long-term assets, when the gains exceeded $250,000. Even before the law was passed, a lawsuit was filed arguing that the bill would impose a tax on income, which isn’t legal in Washington State.

Judge Huber’s ruling came after hearing four challenges combined into one on February 4. In a statement this week, Washington State Attorney General Bob Ferguson said, “All the parties recognize this case will ultimately be decided by the State Supreme Court. We respectfully disagree with this ruling, and we will appeal.”