Seattle Income Tax Ruled Invalid

On November 22, 2017, the King County Superior Court ruled that the new Seattle income tax is invalid under Washington state law. Tim Burgess, the then interim mayor of Seattle, and Pete Holmes, the Seattle city attorney, have signaled their intention to appeal the decision, which may still be heard by the Washington Court of Appeals.

The Seattle City Council’s legislation—CB 119002—which was passed on July 10, 2017, imposes a 2.25% income tax on Seattle residents who earn more than $250,000 or $500,000 if married filing jointly, effective January 1, 2018. Taxpayers below these thresholds face no additional income tax.


Multiple plaintiffs sued the City of Seattle after the income tax legislation was passed, arguing the tax was invalid on statutory grounds and unconstitutional under the Constitution of the State of Washington. 

On November 17, 2017, arguments by the plaintiffs and Seattle were heard in King County Superior Court by Judge John Ruhl. Five days later, he ruled in favor of the plaintiffs and held the Seattle income tax to be invalid under state law.

The Ruling 

Judge Ruhl found the following:

  • The Washington legislature must expressly delegate specific taxing authority to municipalities and that Seattle failed to demonstrate such specific authority existed with respect to its income tax on residents.
  • Seattle’s income tax wasn’t an excise tax that could be imposed by Seattle as part of the express delegation by specific authority granted by the legislature to impose excise taxes.
  • Seattle’s income tax is an impermissible net income tax, expressly precluded under Washington law RCW 36.65.030, which prohibits localities from imposing a tax on net income.

Since the Seattle income tax was found to be invalid on statutory grounds, Judge Ruhl declined to address the issue of whether the tax violated Article 7, Section 1, of the Constitution of the State of Washington. 

Next Steps

Judge Ruhl’s decision is the first stage of the litigation process determining the validity of the Seattle income tax. If the City of Seattle appeals the ruling, the case may move to the Washington Court of Appeals.

We’re Here to Help

To better understand how this tax and the legal proceedings surrounding it might affect you or your business, please contact one of our state and local tax partners:

Adam Cline | (206) 302-6786

Marke Greene | (206) 302-6496

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