WA State Seeks to Collect Capital Gains Tax Before Court Ruling

According to information via The Washington Policy Center (WPC) and court filings, the state of Washington is going to try to collect the controversial capital gains tax beginning March 1st,  before an anticipated State Supreme Court ruling.

 The tax was ruled un-Constitutional on March 1st by Judge

 Back on March 1st of this year, a Douglas County Superior Court Judge ruled the capital gains tax is in fact an income tax and is therefore unconstitutional.

According to GOP House Representative Ed Orcutt:

"Douglas County Superior Court Judge Brian Huber ruled the capital gains legislation "is properly characterized as an income tax...rather than an excise tax as argued by the state."

  However, on Thursday, Nov. 4th, WA State Attorney General Bob Ferguson filed a motion asking the Supreme Court to allow the Department of Revenue to collect the tax before a final ruling is made by that same court.

Jason Mercier of the WPC says the DOR has been repeatedly asked if they will begin to collect or plan to but said it was undecided until Ferguson's filing on Thursday.

Ferguson argued in his motion:

 “Plaintiffs will not be able to meet their burden of proving beyond a reasonable doubt that the capital gains tax is unconstitutional. The trial court ruled in their favor based on the erroneous premise that the tax is a property tax subject to the limitations in article VII of Washington’s Constitution, but that conclusion was incorrect, and is at the very least debatable...It would be profoundly irresponsible for the Department to fail to prepare to collect the tax in April 2023 as directed by statute.”

No immediate word if his request will be granted, but if so, the Department of Revenue would begin collecting before the case is expected to be decided once and for all by the State Supreme Court.