First legal challenge to income tax filed

We knew it was going to happen, and it sure didn’t take long. The first lawsuit to challenge the City of Seattle’s new income tax was filed last week in King County Superior Court.

The lawsuit follows the expected script. It challenges the ordinance as being illegal for three reasons:

  1. It taxes net income, which is explicitly prohibited by state law.
  2. It is  tax that was not authorized by the state legislature, as required by Article XI, Section 12 of the state Constitution.
  3. Since it doesn’t tax income under $250,000, it is not a uniform tax on a class of property, as required under Article VII, Section 1 of the state Constitution.

The lawsuit asks for declaratory relief from the judge, finding that the ordinance is prohibited by law and thus invalid. It does not ask for an injunction preventing the city from implementing it while the case proceeds.

The case has been assigned to Judge John Ruhl, with a trial date of July 16, 2018. Since there is little dispute over the facts in the case, only the interpretation of the applicable laws, this case will never see a trial. It will be decided by the judge, after substantial legal briefs are filed by both sides.

The only question now is how quickly it makes its way to the state Supreme Court.