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Court: Seattle wealth tax unconstitutional but so is tax ban

Photo by: Symi81

By: KIRO 7 News Staff

The Washington Court of Appeals ruled Monday that Seattle is legally allowed to implement its own income tax.

However, this doesn’t immediately clear the way for Seattle because the question still needs to work its way through the courts.

The court found that RCW 36.65, which bans cities from implementing taxes on net income, to be unconstitutional and no longer valid.

It did not overturn the 1933 prohibition on state income taxes — that would be up to the Washington State Supreme Court. 

The ruling stated: “Seattle has the statuatory authority to adopt a property tax on income.”

The tax was developed by the Economic Opportunity Institute, who is defending the lawsuit along with the city. 

“We are elated,” EOI  Executive Director John Burbank said in a statement. “Having clarified Seattle’s authority to tax income, and cleared away the underlying impediments, we are ready to appeal this decision to the Washington State Supreme Court. Seattle has the most regressive tax system of any city in the country, and we will finally have the forum to start correcting that.”

Councilmember Kshama Sawant originally introduced the income tax proposal in June 2017. 

King County Superior Court Judge John Ruhl later struck down the income tax on wealthy residents, saying the city lacked permission from the legislature to impose the tax. 

This decision from the Court of Appeals allows the EOI to ask thte state Supreme Court to review the case. 

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