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King County court rules against Seattle income tax

The City of Seattle lost its fight for an income tax in King County court Wednesday.

While losing a case in court is usually cause for concern, for Seattle, it plays into the city’s plan to take its income tax to the state Supreme Court.

RELATED: Making the case for Seattle’s income tax

Wednesday’s ruling is celebrated by those suing the city.

“Today’s ruling is a victory for all taxpayers in Seattle and throughout the state, and for everyone who values the rule of law,” said Brian T. Hodges, a senior attorney with Pacific Legal Foundation who represents several Seattle residents in challenging the tax. “Seattle politicians billed their plan as a ‘wealth tax,’ but it’s ultimately aimed just as much at the middle class and even the poor.”

The judgement by Judge John Ruhl essentially states that the plaintiffs’ case has merit. The judge denied the city a summary judgement which would have sped up the legal process and delivered the city a win. The fight against Seattle’s income tax is now over in county court — a waypoint on the city’s course to the Supreme Court. To move it forward, the city will have to appeal.

Seattle income tax

After passing an income tax this year, Seattle was sued by four parties. According to court documents, Seattle argued that “it is time to reverse a long line of Washington Supreme Court decisions, all of which hold that income taxes are ‘property taxes’ and thus subject to the ‘uniformity’ restrictions that art.” It speaks to the city’s ultimate goal to get its income tax beyond King County’s court and to the court in Olympia.

The city also argued that its income tax was actually an excise tax, and that it only applied to total income, not net income which is prohibited by state law. But Judge Ruhl denied the city’s arguments, saying that “the city’s tax is not an ‘excise tax'” and therefore is not authorized by state law.

“By subverting constitutional protections against discriminatory tax schemes, their strategy was to pave the way for more taxes, on more people, at all income levels,” Hodges said. “They also sought to undermine the fundamental principle that your income is your property, protected by constitutional safeguards for property rights. The court performed a service for all taxpayers, and all property owners, by defeating the city’s strategy to undermine their rights.”

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