WATERVILLE — A lawsuit filed Wednesday in Douglas County Superior Court aims to overturn a capital gains tax recently approved by state legislators.
Senate Bill 5096 levies a 7% tax on the capital gains of the sale of assets exceeding $250,000.
Conservative group the Freedom Foundation in conjunction with Seattle law firm Lane Powell are challenging what they believe to be a tax on income and therefore a violation of the state constitution.
“The Washington Constitution is unambiguous,” said Freedom Foundation CEO Aaron Withe in a news release. “Taxpayers can’t be treated differently based on the amount of their income. It’s both punitive and illegal.”
The state Senate on Sunday approved the tax by a vote of 25-24 and it now needs only Gov. Jay Inslee’s signature to become law.
A group of seven plaintiffs are challenging the tax and have filed a complaint for declaratory and injunctive relief against the state of Washington, the state Department of Revenue and its director, Vikki Smith.
The lawsuit was filed by conservative group Freedom Foundation with Seattle law firm Lane Powell on behalf of plaintiffs Chris Quinn, Craig Leuthold, Suzie Burke, Lewis and Martha Randall, Rick Glenn and Neil Muller. One or more of the plaintiffs reside in Douglas County.