High court declines to review Seattle income tax ruling

wasupremecourt

Washington state Supreme Court

SEATTLE — The state Supreme Court has declined to immediately take up the lower-court ruling that killed Seattle’s income tax and is instead sending the case to the Court of Appeals.

The Seattle Times reports the Supreme Court issued the order after meeting en banc Thursday, more than a year after the city petitioned for direct review.

Seattle made the request in December 2017, after a King County Superior Court judge struck down the tax on well-off households, which the city hadn’t yet started to collect.

In his Nov. 22, 2017, decision, Ruhl said the city lacked specific authority from the state Legislature to impose the income tax. The judge also said the tax violated a Washington law that bans taxes on net income.

Seattle described the measure as an excise tax and sought to skirt the ban on taxing net income by taxing total income instead. Ruhl disagreed.

Rather than appeal Judge John Ruhl’s ruling to the Court of Appeals, the city went straight to the Supreme Court.

“There’s no way they can look at this and see any silver lining,” said income-tax opponent Jason Mercier, director of the Center for Government Reform at the libertarian Washington Policy Center.

Supporters have seen Seattle’s case as an opportunity to break through the long-standing inability of Washington and its cities to tax the wealthy.

In a statement, City Attorney Pete Holmes said the city wouldn’t be giving up.

“While we felt the state Supreme Court was the most appropriate forum to address the constitutional issues we hope to resolve in this case, we’re happy to first take our arguments to the Court of Appeals,” Holmes said.

John Burbank, executive director of the progressive Economic Opportunity Institute, said direct review would have been best because Seattle and other cities need income taxes now. But Burbank said proponents should remain confident.