The Washington state Supreme Court has upheld the constitutionality of Washington State’s new capital gains tax even though taxes on income violate the state’s constitution. The instead based their opinion on semantics. Supporters called the tax an excise tax, not a tax on income or property. The argument they accepted is that the tax is an excise tax because it is a tax on goods or services (that applies to sales or transfers of assets), and is therefore not a tax on income or property.
The court declined for now to revisit precedent forbidding a progressive income tax.
It is a 7% tax on the sale of financial assets such as stocks and bonds. The tax applies to profits over $250,000 and does not apply to real estate or retirement accounts–yet. Now that the door is open, expect more attempts to charge “excise taxes” on more and more types of transactions and on lower and lower profit amounts. At some point, there will likely be attempts to impose a state income tax if the makeup of the state government doesn’t change. And if a state income tax is imposed, in some form, expect more people from Spokane to move over the state line to Idaho.
https://www.seattletimes.com/seattle-news/politics/wa-supreme-court-upholds-capital-gains-tax/
Contact Deepak Malhotra if you need help with real estate investing. Even if you are not looking in Cheney, Medical Lake, Airway Heights, or the Spokane area, mentoring services or referrals can be provided.