The decision was handed down late Tuesday.

  State Supreme Court rules WA State can collect capital gains tax prior to a final decision

Back on November 4th, WA State Attorney General Bob Ferguson filed with the State Supreme court, seeking a stay, which would allow the Department of Revenue to collect the controversial capital gains tax prior to a final ruling by the court in early 2023.

 The court ruled in favor of the stay, which means those who sell stocks, bonds, investments, real estate, large vehicles or boats etc. will have to pay the tax.

March 1st, a judge ruled the tax was unconstitutional, and therefore invalid. The state has appealed, and the Supreme Court will be making a final ruling in early 2023.

 According to the Washington Policy Center, numerous requests have been made prior to this decision by the court as to whether the Department of Revenue would attempt to collect the tax. The answer was vague, and according to Jason Mercier of the WPC, the DOR response was "the decision has not been made yet."

This now means the DOR can begin to implement plans to collect the tax, the State Supreme Court is slated to begin hearing oral arguments in the case on January 26th, 2023.  Then, they will render a final decision.

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Numerous tax experts, including a formal national IRS tax attorney, have said capital gains are considered income, and therefore this tax would violate the state constitution.  But WA state considers it an excise tax, stemming from just the real estate portion of capital gains.

If the Court rules it is unconstitutional, the state claims it will "refund" the taxes collected to taxpayers. But already experts are saying such a process would likely be lengthy and cumbersome if it happens at all.

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