Seattle argues income isn’t money

Sep 24, 2019

We previously mentioned the Court of Appeals has been asked to reconsider its bizarre income tax ruling this summer striking down state law banning a local income tax. Yesterday the City of Seattle responded with a brief arguing that income isn’t money. According to Seattle’s brief:

"Although the statute includes 'all moneys,' the legislature specified that 'moneys' means 'coin or paper money issued by the United States government.' RCW 84.04.060. The reference to 'moneys' thus refers to coin or paper money held as an asset, as traditional ad valorem taxes are understood, rather than income earned over time . . .Thus, based on its plain language, the exemption does not apply to personal income subject to the City’s tax."

Seattle is forced to make this argument because under state law, “moneys” are exempted from property taxes (the state supreme court has repeatedly ruled that income is property).

Sometimes judges will look to the dictionary to help clear up disagreement over words. Here is how Webster’s Dictionary defines income and money:

  • Income – “a gain or recurrent benefit usually measured in money that derives from capital or labor.”
  • Money - “something generally accepted as a medium of exchange, a measure of value, or a means of payment.”

We should know soon whose definition of income the Court of Appeals believes is more accurate.