The Washington State Supreme Court held a hearing on January 26 to decide the legality of the capital gains “excise” tax. WR and the Opportunity for All Coalition (OFAC), the Building Industry Association of Washington (BIAW), and others continue to support the lawsuit to strike down Washington State’s illegal and unconstitutional income tax.
Former Attorney General Rob McKenna and his legal team did an excellent job presenting arguments against the faulty logic of a Washington excise tax on income derived anywhere in the country, violating both the constitution and the people’s will.
McKenna asked the Court how this could be an excise tax if it’s reaching income and activity outside the State. “I thought it was it was a good sign that they [judges] were very interested in the Commerce Clause argument that the plaintiffs have made here that this tact violates the federal Commerce Clause by trying to extend Washington’s taxing power outside of the state,” he said in comments following the hearing.
Callie Castillo, a lead attorney in the case, commented after the oral arguments, saying, “The Supreme Court is considering whether the new capital gains tax is an excise tax, as the State claims it is, or an income tax, as the Superior Court held it to be. If it’s an income tax, it’s unconstitutional because income is property under Washington’s law, and it exceeds our state constitution’s limits on property taxes. If the Supreme Court rules that it’s an excise tax, it’s still unconstitutional because it taxes gains from anywhere in the country or world, beyond Washington State’s jurisdiction, in violation of the federal commerce clause.”
The Court’s decision on the matter is pending.
Read more about the three possible rulings