The Freedom Foundation brought suit last week to end the constitutionally illegal state income tax the WA State legislature enacted last session.
Douglas County Superior Court heard the first round of arguments in the Freedom Foundation’s
lawsuit challenging the controversial capital gains income tax narrowly adopted by the democrat legislature in April.
Gov. Inslee, who claimed
on the campaign trail in 2012 that he would “veto anything that heads
in the wrong direction, and the wrong direction is new taxes in the
state of Washington,” signed the bill in May, stating at the signing ceremony that, “This could be the pinnacle of the greatest joy of the bills that I’ve signed as governor.”
Going into the hearing, Judge Brian Huber had five issues before him,
two of which were decided at the hearing and three of which will be
addressed at a later time.
First, Huber decided to consolidate the lawsuit against SB 5096
filed jointly on April 28 by the Freedom Foundation and attorneys from
Lane Powell PC on behalf of 10 Washington residents with a second
challenge filed by the Opportunity for All Coalition (OFAC) on May 20.
Going forward, the two cases will now be treated as one, as both Freedom
Foundation and OFAC had requested.
Second, the judge granted a request by a group of farmers to file an
amicus brief in support of the plaintiffs contending the tax is
unconstitutional.
Third, a group of additional interests — consisting of the Washington
Education Association (the statewide teachers union, which has been
seeking to impose an income tax on Washingtonians for almost 90 years),
the Edmonds School District, a parent of a public school student, a
public school teacher and a child care provider — petitioned the court
to be allowed to intervene in the proceedings as parties defending the
tax alongside Attorney General Bob Ferguson’s office.
The parties contend they will receive some of the money collected
from other taxpayers and therefore have an interest in defending the
law, while the Freedom Foundation argued they do not meet the standards
to be admitted as parties and could instead be permitted to file an
amicus brief.
Huber indicated he would accept additional written arguments on the
question from both sides and issue a written decision in the next week
or so.
Fourth, the Attorney General’s Office had asked the judge to dismiss
the case outright, contending that state law prevents taxpayers from
challenging a tax in court until after they have paid the applicable tax
and, in this case, no one will pay the new capital gains income tax
until 2023.
However, the applicable state law
specifically allows taxpayers to preemptively challenge taxes they
allege to be “in violation of the Constitution of the United States or
that of the state,” which is exactly what the plaintiffs in this case
contend.
Finally, in the event the judge did not dismiss the case, Ferguson’s
office had argued, without elaboration, that the “ends of justice” would
be better served by transferring the case to Thurston County Superior
Court. As the home to the state capital and state agencies, presumably
Ferguson’s team believes it more likely to receive a ruling upholding
the tax before a Thurston County judge.
While the Freedom Foundation was prepared to argue these issues at
the hearing, Huber indicated he needed additional time to consider
whether to dismiss the case and directed the parties to work out a time
for a second hearing sometime in August.
As it has for years, the Freedom Foundation will continue to do its
utmost to prevent the imposition of a new, unnecessary, harmful and
precedent-setting income tax on Washington residents.
