Washington Justices Weigh Constitutionality of Capital Gains Tax

Several members of the Washington Supreme Court asked probing questions of both sides in arguments Thursday on constitutionality of the state’s new tax on capital gains.

A trial court struck down the tax law in May, siding with farming and business groups that argued past court rulings categorized income taxes as property taxes, which under Washington’s constitution aren’t allowed to exceed 1% annually. The tax, which took effect on Jan. 1, 2022, is 7% on gains over $250,000 per year, excluding those from retirement account sales, real estate, and certain small businesses.

Revenue from ...