(The Center Square) – The Washington State Supreme Court has upheld the constitutionality of the state’s capital gains tax. The court released its 7-2 ruling on Friday morning.
The state Legislature passed the capital gains tax in 2021, and Gov. Jay Inslee signed it into law. It creates a 7% tax on profits of more than $250,000 from the sale of some assets, such as stocks and bonds.
Last March, Douglas County Superior Court Judge Brian Huber ruled the tax was “properly characterized as an income tax…rather than as an excise tax as argued by the State” and struck it down. The state constitution’s uniformity clause does not allow income to be taxed at different rates.
State Attorney General Bob Ferguson directly appealed the decision to the Supreme Court, which in July agreed to hear the case.
