Judge paves way for move to repeal capital gains tax


OLYMPIA, Wash. (AP) — Opponents of the state’s new capital gains tax may begin collecting signatures on a move to repeal the law after a judge approved final wording of how the measure would be described on the ballot paper and the initiative petitions.

The Everett Herald reported that Thursday, Thurston County Superior Court Judge Indu Thom gave the go-ahead for the repeal campaign to begin collecting signatures before the July deadline.

At issue is legislation Governor Jay Inslee signed in May 2021. It took effect Jan. 1 and is expected to generate $415 million for early learning and child care programs in 2023, the first year of collection. .

By law, a capital gains tax will be levied on annual profits from the sale of long-term assets, such as stocks and bonds, for certain individuals and married couples. The state will collect 7% of those profits over $250,000. The law contains exemptions for retirement accounts, real estate, and certain agricultural and small businesses.

An estimated 7,000 taxpayers could be subject to the new tax, according to a 2021 tax analysis.

Sponsors of Initiative 1929, which would repeal the law, must collect and deliver signatures from 324,516 registered voters in Washington by 5 p.m. on July 8 in order to qualify for the November ballot. They will have to submit nearly 400,000 signatures to account for invalid or duplicate signatures.

Meanwhile, a lawsuit challenging the legality of the capital gains tax is making its way through the courts.

In March, Douglas County Superior Court Judge Brian Huber ruled that it was an unconstitutional income tax. Attorney General Bob Ferguson said at the time that his office would appeal to the state Supreme Court.


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