In March 2023, the Washington Supreme Court ruled that the state’s capital gains tax is a constitutional excise tax, not an income tax, even though it is measured by net long-term capital gains allocable to Washington. Politicians and some press argued that the tax was easy to apply because the starting point was long-term capital gains reported on a taxpayer’s federal income tax return. However, because the statute was designed to mollify certain political constituencies, and to qualify as an excise tax instead of a tax on income, this tax statute is incredibly confusing and promises to open the door to much litigation.
Below, we provide a number of resources to help you navigate the tax and its potential implications.
Callie A. Castillo Scott M. Edwards Lewis M. Horowitz Aaron C. Johnson Gary M. Kirk Jamie R. Lanier Aimee L. Miller
Lane Powell Tax Team
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