Here are my notes from today’s Seattle income tax Court of Appeals hearing:

• I was hoping to provide live updates but court wi-fi blocked social media sites (Twitter/Facebook).
   
• Division 1 Court of Appeals is an intimate setting with only two rows of public seating. Most in attendance are the attorneys for the various cases. In contrast, the Seattle income tax case at trial court required an overflow room for attendees.
   
• For the other cases this morning each side had 10 min to argue. Both sides for the Seattle income tax arguments, however, were provided 20 min each (divided between various attorneys).
   
• Paul Lawrence argued first for City of Seattle saying the trial court errored on 3 respects: 1) Cities have power to impose income tax; 2) Seattle’s tax is an “excise tax”; 3) It is not a net income tax.
   
• The Court interrupted asking if income is property and court abides by precedent, why isn’t this a short opinion for court to decide?
   
• Seattle argues the Appeals Court can provide guidance to Supreme Court as to why prior income tax cases were wrongly decided.
   
• The court again interrupted asking what grant of authority has the legislature provided Seattle to impose an income tax?
   
• Seattle argues a tax based on residency can be a validate excise tax making claim the income tax is an excise tax on the privilege of living in Seattle.
   
• Next an attorney for Economic Opportunity Institute (EOI) argued the state law prohibiting a local income tax is unconstitutional.
   
• Former Attorney General Rob Mckenna spoke the majority of time for the plaintiffs arguing the income tax is illegal.
   
• The Court asked if it has the power to overrule the numerous state Supreme Court income tax decisions – McKenna said no.
   
• McKenna says the right to live someplace is not a privilege – therefore even if Seattle called the income tax an excise tax it still would be illegal. Illustrating the point McKenna pointed out prior Supreme Court rulings rejected attempts to classify an income tax as an excise tax.
   
• McKenna closes by saying no matter how Seattle classifies the tax, the legislature has not granted local governments the authority to impose this type of tax.  
   
• Seattle closes by arguing its income tax is not a restricted net income tax but instead a gross income tax on personal income and therefore not restricted by state law. 
   
• Hard to judge based on oral arguments but I sensed the judges were very skeptical of Seattle's arguments and feel bound by prior state Supreme Court rulings prohibiting a graduated income tax. 

Additional Information
Seattle’s illegal income tax – Round 3