King County Superior Court Judge finds bank tax passed by Legislature in 2019 violates U.S. Constitution.

The Lens reports the controversial bank tax passed by lawmakers in the closing hours of the 2019 legislative session violates the U. S. Constitution’s Commerce Clause. The legislation

…approved just before the end of the 2019 legislative session, imposed a tax on out-of-state financial institutions. The court found this violates the U.S. Constitution’s dormant Commerce Clause that prohibits states from discriminating between in-state and out-of-state commerce.

After its passage and approval by Governor Jay Inslee despite calls to veto itSHB 2167 was eventually challenged in court by the Washington Bankers Association (WBA). WBA President and CEO Glen Simecek said in a statement that “we have always contended this tax violates the Commerce Clause of the Constitution. We are pleased that the Court agreed and granted our motion for summary judgment.”

Jason Mercier at the Washington Policy Center writes that the ruling should have been anticipated.

[Lawmakers] were warned by members of both parties as the tax was rushed to the floor on the last day of the 2019 session that it was constitutionally suspect. The Governor was asked to veto the tax increase by Sen. Braun, Sen. Mullet, Sen. Schoesler, Rep. Wilcox and Rep. Stokesbary. The Governor declined to do so.  

As The Lens reports,

During debate, Sen. Steve O’Ban (R-28) said “we’re buying a lawsuit” with SHB 2167. O’Ban was one of several lawmakers during this year’s session to introduce legislation prohibiting title-only bills, but none of them received public hearings.

The bill then went from title-only to passage within 50 hours.

Senate Financial Institutions, Economic Development & Trade Committee Chair Mark Mullet (D-5) noted on the chamber floor that legislators weren’t even able to get a legal opinion from state Attorney General Bob Ferguson before SHB 2167 was voted on because his office was closed for the weekend. The bill narrowly cleared the Senate 25-24.

We previously wrote about the controversial legislation here, here, and here.

A good outcome.