Washington Supreme Court upholds state’s capital gains tax

OLYMPIA, Wash. — The Washington Supreme Court has issued a ruling on a capital gains tax, enacted in 2021, that targets the wealthy.

In a ruling released Friday, the court upheld the tax, ruling it is constitutional.

Chris Quinn v. State of Washington began in January when a lower court found the tax unconstitutional because they said it doesn’t apply equally to everyone.

Supporters of the capital gain tax said it helps level the state’s tax code by targeting the wealthiest residents to raise $500 million per year for schools.

“Because the capital gains tax is an excise tax under Washington law, it is not subject to the uniformity and levy requirements of article VII. We further hold the capital gains tax is consistent with our state constitution’s Quinn v. State, No. 100769-8 4 privileges and immunities clause and the federal dormant commerce clause. We therefore reject Plaintiffs’ facial challenge to the capital gains tax and remand to the trial court for further proceedings consistent with this opinion,” the opinion released Friday said.

The court declined to change its stance on Washington’s income tax.