Court greenlights for signature-gathering initiative to repeal WA’s capital gains tax
Apr 29, 2022, 2:11 PM | Updated: 3:14 pm
WA State Capitol (KIRO 7 News)
(KIRO 7 News)
Thursday, a Thurston County Superior Court judge approved the ballot title and summary of I-1929, a ballot initiative that seeks to repeal Washington’s state’s recently legislated capital gains tax, laying the groundwork for the signature-gathering process.
The judge determined that the wording of the initiative must avoid characterization as either an income or an excise tax.
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Either description paints the capital gains tax with a particular ideological brush. Historically, the state rejects income taxes — Washington is one of only nine states in the union without a tax on personal income.
Originally, Attorney General Bob Ferguson assisted in drafting the ballot title and summary to include the language “excise.” In March, the Legislature approved a bill that requires the Attorney General’s Office to draft impact statements on initiatives that “cause a net change in state revenue.”
“I will adapt the proposal of the Attorney General’s Office and the sponsor, to simply indicate that this measure concerns taxes and conveys to the voters the general subject of the measure as required, without introducing any bias or prejudice against the measure,” a Thurston County Superior Court judge said.
The ballot initiative would repeal SB 5096, passed in 2021, creating a 7% tax on the sale or exchange of capital assets beyond $250,000.
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The Legislature characterizes the bill as an excise tax — a decision that has lain the groundwork for a series of legal challenges.
In March, a Douglas County Superior Court judge determined that the excise tax is more accurately described as an income tax and is therefore in violation of the state’s constitution. That decision has been submitted for an appeal to the State Supreme Court by Attorney General Bob Ferguson.
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