Tomorrow morning, the Senate Housing and Local Committee has a hearing scheduled on SB 5554. The bill would eliminate the ban on local net income taxes, providing other local taxes are reduced. From the bill title:
Relating to eliminating the prohibition on local net income taxes if certain revenue neutrality requirements are met…
Seems like a heavy lift in a short session, but for income tax supporters hope springs eternal. Jason Mercier, with Washington Policy Center, writes,
Though the Court of Appeals authorized a flat 1% local income tax, for SB 5554 to be fully implemented a constitutional amendment would also be needed to allow a graduated income tax.
SB 5554 is the latest action by lawmakers trying to impose an income tax. Last year the legislature adopted a capital gains income tax (while refusing to pre-empt cities from imposing a local version) with the stated goal from supporters of using the courts to open the door to income taxes across the state. The capital gains income tax is currently subject of litigation arguing it is unconstitutional with a summary judgement hearing scheduled for February 4 at 10 a.m.
A constitutional amendment to allow a local government to pass a graduated income tax requires voter approval, which as Mercier writes, is unlikely unless the Washington electorate has changed dramatically.
Not only have Washingtonians rejected 10 straight income tax ballot measures (including six proposed constitutional amendments), but last December the WA Tax Structure Work Group received an update from its consultant on the community meetings and outreach it conducted showing that voters are still opposed to an income tax.
And the revenue neutral language can be easily repealed by a subsequent Legislature unless it, too, is placed in the Constitution.
It’s always worth watching these things, but tomorrow may be the end of the road for SB 5554.
