Judge Clears Way for Lawsuit Over Capital Gains Tax to Continue

In layman's terms, and according to the state Constitution, capital gains taxes are illegal. However, during the last legislative session, Democratic legislators pushed one through due to their majority.

In short, every other state, and even the IRS, consider profits-money from the sale of large ticket items to be income. Whether it's a boat, stocks, investments etc. even the IRS considers capital gains to be income

However, Inslee and Democratic legislators worded their legislation so that it is not called income.  It's playing fast with the rules.

But now a lawsuit supported by the Freedom Foundation and others can move forward. Friday, a WA State Superior Court Judge in Douglas County, Brian Huber, struck down and rejected all of the state's arguments that this lawsuit be dismissed.

According to the FF CEO Aaron Withe:

“Judge Huber rightly rejected every one of the state’s attempts to have the lawsuit weighted in their favor,” continued Withe. “State attorneys tried to have our lawsuit dismissed and, if not thrown out entirely, moved to Olympia, where they figure they’d have an easier time getting a judgment in their favor.”

In the past, it's not been unusual when the state has been sued, that AG Bob Ferguson (who defends the state against lawsuits) and his staff have been successful in getting these cases moved to Thurston County. That happens to be where Olympia is located and is considered perhaps THE most "Inslee-friendly" judges in our state.

The result ends up being Superior Court Judges often dismiss or even refuse to hear lawsuits brought against the state. We saw this during COVID.

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But now, Judge Huber has rejected all of the attempts by the state to drop or dismiss, and now it appears this suit will be going forward.

Ten times over a decades-long battle, WA voters have rejected proposals to institute a state income tax. Now it appears this will head to court.