The Turbulent Ride For Washington's New Capital Gains Tax May Have Come To A Screeching Halt

• Published date: 04 March 2022
• Subject Matter: Tax, Income Tax, Capital Gains Tax
• Law Firm: Foster Garvey
• Author: Mr Larry Brant

As previously reported on May 7, June 17 and November 4 of last year, two lawsuits were filed in Douglas County Superior Court in Washington, seeking a declaration that the state's new capital gains tax is unconstitutional. The court consolidated the cases. The parties filed cross motions for summary judgment, along with legal briefs in support of their positions. The lawyers for the State of Washington asked for a judgment that the tax regime meets constitutional muster. On the other hand, the lawyers for the taxpayers that initiated the case sought a judgment that the tax regime is unconstitutional.

On February 4, 2022, Judge Brian C. Huber heard oral arguments on the motions. Much sooner than most of us tax practitioners envisioned, on March 1, 2022, Judge Huber issued his 12-page opinion. In a thoughtful and well-reasoned opinion, he strikes down the new law as...