Lawmakers pushing WA capital gains tax regardless of judge ruling it unconstitutional

OLYMPIA -- State lawmakers are continuing to move forward with a capital gains tax after a Douglas County Superior Court judge ruled that the tax violates the state constitution.

Judge Brian Huber says the tax has all the qualifications of an income tax, but is being disguised under a different name to make it legal.

In an interview with Washington Policy Center, Scott Schumacher, University of Washington tax law professor, agreed with Huber's ruling claiming the tax violates multiple current laws.

"It's not uniformly applied. It's only applied to those who have capital gains above $250,000 and it's also above the maximum of 1% tax on property. Both of those are in the Washington constitution," Schumacher said.

However, lawmakers are still carrying it out and labeling it as an excise tax, which means those rules don't apply.

Yakima Chamber of Commere President Verlynn Best says after two years of COVID, the state shouldn't be trying to tax people even more than they already are.

“it's just another tax on top of all the other one's we pay, really. It's taxation and, in this state, with the budget and the access of funds they have and the budget they built, they don't need anymore of our taxes,” Best said.

The capital gains tax would potentially raise about $500 million a year and go towards public schools and early learning programs.

State lawmakers will likely appeal Huber's ruling and bring the issue to the State Supreme Court to decide on.

You can find out more information on the Washington capital gains tax here.