In a decision issued on July 15, 2019, Division I of the Court of Appeals of Washington ruled that the 2017 City of Seattle 2.25% tax on high-income residents was unconstitutional because it violated the Washington state constitution’s uniformity requirement (Art. VII, Sect. 1).
In striking down the tax, the court relied on a series of Washington Supreme Court decisions dating back to 1933, which “unequivocally held that income is property, a tax on income is a tax on property, taxes on property must be uniformly levied, and a graduated income tax is not uniform.” The court found the Seattle income tax to be graduated and, therefore, unconstitutional.
A judge of the King County Superior Court previously found that the Seattle’s ordinance that imposed the income tax violated RCW 36.65.030, which specifically prohibits cities from levying a tax on net income. But, the court ruled this statute to be unconstitutional because it violated the single subject rule of the state constitution (Art. II, Sect. 19) when the statute was originally enacted 35 years ago.
In the end, the court felt “constrained by stare decisis to follow our Supreme Court’s existing decisions that an income tax is a property tax. We have no authority to overrule, revise, or abrogate a decision by our Supreme Court,” thus teeing the case up for review by the state Supreme Court.
The City of Seattle will most certainly appeal this decision.
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