Do-over? Appeals court asked to re-think ruling finding cities can tax income.

Last month – it seems so long ago – the state Appeals Court rejected a 1984 statute prohibiting municipalities from levying an income tax. The decision came as the court considered Seattle’s graduated income tax.

We wrote at the time the court’s decision to reject the graduated income tax was expected; the state Supreme Court has long held that graduated income taxes are unconstitutional. The scrapping of the statutory prohibition on the basis that the legislation violated the single-subject rule, however, surprised even proponents of the Seattle tax. Some Republican lawmakers signaled their intent to refile a standalone statutory prohibition in the 2020 session.

Jason Mercier, of the Washington Policy Center, reports that the Appeals Court has been asked to reconsider.

Led by former State Supreme Court Justice Chief Gerry Alexander, former Associate Justice Phil Talmadge and former Attorney General Rob McKenna, plaintiffs filed an extensive brief painstakingly pointing out the errors of the Courts original ruling. Included in the brief are the transcripts from the 1984 public hearings and floor debates on the law explicitly banning a local income tax. The brief also points out that the state Supreme Court has already repeatedly ruled that income is “intangible personal property.” This is important because the Appeals Court “refused” to read income into the exemption against taxing intangible personal property.

The motion for reconsideration is worth reading, as it clearly counters the court’s analysis. 

And the saga continues.