In November 2017, a King County Superior Court judge ruled Seattle’s effort to impose an income tax violates state law. The decision was a major blow for those who hope the courts will use the case to overturn the Supreme Court’s 1933 ruling that a graduated-rate income tax is unconstitutional. First Judge John Ruhl decided that Seattle’s income tax is indeed an income tax, despite the city’s effort to declare it something else — an “excise tax” on “the privilege of living in Seattle.” Then Ruhl decided that two more-important issues must be addressed before courts can consider the constitutional question. The first is that cities cannot adopt an income tax unless the Legislature specifically grants them the authority. The second is that a 1984 state law says cities may not adopt an income tax. These two findings erect high hurdles for Seattle’s effort. Yet the city of Seattle continues to press the case under new mayor Jenny Durkan, and has filed an appeal directly to the Supreme Court. Should the court decide to hear the case, the nine justices are free to decide otherwise. Ruhl’s decision makes that outcome difficult, however, as the justices would have to find an excuse to dispute his legal reasoning.
For more information, see —
Seattle Times, Nov. 22, 2017: Seattle’s income tax on the wealthy is illegal, judge rules
Crosscut, Nov. 22, 2017: Judge rules income tax illegal but Seattle vows to fight on
Seattle Times, Dec. 2, 2017: Appeal likely in ‘longshot’ income-tax case, Seattle Mayor Jenny Durkan says
The (Tacoma) News-Tribune, Dec. 4, 2017 (editorial): Sorry, Seattle, this is no time for income tax talk
Seattle Times, Dec. 8, 2017 (editorial): Seattle should drop its dead-end income-tax case
Bloomberg News, Dec. 15, 2017: Seattle appeals court decision invalidating ‘rich’ tax