WA Supreme Court: State Can Start Rulemaking on Capital Gains Tax
November 30, 2022
Available Now: Capital Gains Lawsuit Resources
Olympia, WA: The WA State Supreme Court just ruled in favor of allowing the Washington Department of Revenue to move forward on rulemaking around the state’s capital gains tax.
A WA State Supreme Court hearing on the lawsuit challenging childcare and education funding, Quinn v. Washington, is scheduled for January 26, 2023 and a final decision is expected months later.
Agreeing with State Attorney General Bob Ferguson’s request for a stay, the WA State Supreme Court stayed the trial court’s order declaring the state’s capital gains tax void and inoperable pending the Supreme Court’s final decision in the case. The Department of Revenue can now move forward with issuing rules, providing guidance to taxpayers, and rolling out its website and tax payment mechanisms before the tax due date of April 18, 2023. These actions are needed to ensure the State is prepared to collect and use revenue from the tax to fund critically needed education investments, as well as to ensure that capital gains taxpayers, an estimated 0.1% of all Washington taxpayers, do not miss the filing deadline and incur penalties. The Court’s ruling comes as our state’s childcare and education systems face a funding crisis.
Treasure Mackley, Executive Director of Invest in WA Now, responded: “Allowing capital gains tax preparations to go forward is the right step for Washington’s students and parents. The lawsuit challenging the capital gains tax is just a delay tactic by a small group of millionaires who refuse to pay what they owe. We cannot afford to put the self-interests and fortunes of the super-rich ahead of our communities.”
According to recent news reports:
Washington’s school districts are facing massive cuts without additional funding (Crosscut 11/2/22).
29.6% of Washington households couldn’t access childcare. In the Seattle metro area, a whopping 40% of families with kids under 5 couldn’t access child care. (US News 2/1/22)
According to the state’s motion, “If the Department is unable to establish the mechanisms and rules to collect the tax before the due date, there is a risk that some taxpayers will evade the tax altogether, reducing funding for the vital education programs it supports.”
Earlier this year a trial court in Douglas County ruled in favor of the millionaires behind Quinn, which is attempting to eliminate $500 million per year in education funding raised from a 7% capital gains tax on extraordinary profits from stock sales exceeding $250,000. These monies will fund the Education Legacy Trust Account, which supports child care, pre-schools, special education, and community and technical colleges, among other things.