WATERVILLE – Two lawsuits against Washington’s new capital gains tax are now one.
Douglas County Judge Brian Huber ordered both cases in a Superior Court hearing today, which combined the tax law into a single lawsuit. However, he is still being asked to decide whether to move the case to Thurston County or even drop it altogether. These questions will be decided after a future hearing.
“This is a circle with a judge,” Huber told lawyers in a Zoom call on Tuesday. “We have a weekly calendar that goes on, and as much as we like to dive into cases involving such matters, it takes time.”
The tax, due to take effect Jan. 1, would take 7 percent of annual long-term capital gains from sales of stocks and bonds that exceed an annual threshold of $ 250,000. The state says it will only affect the richest Washingtoners, less than 0.25 percent of the population. Opponents say the measure is an unconstitutional income tax within the meaning of the Washington Constitution.
The conservative nonprofit Freedom Foundation filed its first lawsuit against the Douglas County tax in April, representing seven plaintiffs including Maryhill Winery owner Craig Leuthold of Spokane, Seattle real estate magnate Suzie Burke, and Freeland investor and former E * Trade Board Member Lewis E. Randall. Developer Chris Quinn, the lead plaintiff, is the only Douglas County resident involved in the lawsuit.
In May, Orondo orchardist and President of the Chelan-Douglas Farm Bureau, April Clayton, along with eight other people and the Washington Farm Bureau, sued the new tax to take effect. Both groups of plaintiffs agreed to pool the suits without objection from state lawyers or other groups interested in the case.
Those groups that intend to intervene include the Edmonds School District and the Washington Education Association. They say the new tax law “will invest billions of dollars in the children of our state.” Huber said he would decide by letter whether they can join the lawsuit.
“I would like to take a closer look not only at the rule, but also at the case law cited by the parties,” said Huber.