Lower court rules Washington's capital gains tax unconstitutional
Washington state's new capital gains tax was ruled unconstitutional Tuesday by Douglas County Superior Court Judge Brian Huber.
In the ruling, Huber sided with opponents of the tax who have argued it is an income tax, unconstitutional in the state, rather than an excise tax, and he said the new tax violated the uniformity requirements of the state's constitution. The case will likely head to the Washington Supreme Court for review.
“There’s a great deal at stake in this case, including funding for early learning, child care programs, and school construction," state Attorney General Bob Ferguson said in a news release after the ruling. "Consequently, we will continue defending this law enacted by the peoples’ representatives in the Legislature. 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.”
Gov. Jay Inslee signed the tax into law last May. The law imposes a 7% tax on sales that result in capital gains, including for stocks, bonds and other capital assets, of over $250,000. Certain assets like real estate, assets in a retirement account and timber are exempt. The tax went into effect at the start of this year, with payments due next year.
https://www.bizjournals.com/seattle/news/2022/03/02/lower-court-capital-gains-tax-unconstitutional.html
Douglas County has a population of about 38,000. Basically the middle of nowhere.