City finance spokeswoman: “Highly unlikely” Seattle will be collecting income taxes in 2019

This may well qualify as one of those “bottom stories of the day,” but it’s worth noting: The Seattle Times reports Seattle officials are not rushing to put in place systems required to begin collecting the city’s controversial income tax. 

When Seattle passed an income tax on wealthy households, officials estimated the city would need to spend up to $13 million on an information-technology system and up to $6 million annually on as many as 50 new staff.

But a King County Superior Court judge ruled the measure illegal in November, throwing into doubt the city’s stated plan to start collecting the tax in 2019…

In an email, a spokeswoman for the city’s Finance and Administrative Services said the city won’t be buying an IT system or bringing on new staff this year.

This year’s costs “will be limited to planning efforts,” said the spokeswoman, Cyndi Wilder. “We do not anticipate major technology expenditures or hiring of additional staff.”

That, at least, sounds prudent within the constraints of a system in which the City Council has rushed to adopt a tax that violates both the constitution and state statute. As the Washington Research Council wrote in its analysis of the King County Superior Court decision,

In briefs to the court, the plaintiffs presented three key arguments as to why the ordinance should be declared to be void:

1) Cities only have authority to impose such taxes as they are specifically authorized by the Legislature to impose . There is no legislative authorization for the tax the city adopted.

2)  Cities are explicitly prohibited by statute from imposing a tax on net income. The tax the city adopted is a tax on net income.

3)  The income tax is a property tax that violates the constitutional require- ment that taxes on property be uniform and the constitutional 1 percent rate limitation.

[Judge] Ruhl concluded that the first two arguments (the tax is not authorized and it is a prohibited net income tax) are valid and on these bases declared the ordinance to be void. Having invalidated the ordinance on statutory grounds, Judge Ruhl found it unnecessary to consider the constitutional argument.

The Seattle Times story adds,

It’s unlikely the Supreme Court will take up the case and rule by the end of this year. Regardless, it’s “highly unlikely” the city will be ready to collect the tax in 2019, Wilder said.

Also, we suspect, it’s unlikely the city will be ready to collect the tax in 2020, 2021, or … well, you get the idea.