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Seattle’s income tax on wealthy residents was ruled unconstitutional on its first legal test.

Personal finance

Seattle Personal Income Tax Ruled Unconstitutional

  • 1/22/2018

Passed by the City Council in July, Seattle’s income tax on wealthy residents was ruled unconstitutional on its first legal test in a recent ruling issued by the King County Superior Court on November 22.

The City of Seattle had presented the tax as something other than an income tax. However, Washington Supreme Court decisions have clarified on multiple occasions that “income” is property and that any tax on property must be uniform. As a result, the Court said that Seattle’s income tax facially violates the Washington constitution.

In his opinion, Judge John R. Ruhl wrote, “In short, the City’s tax, which is labeled ‘income tax’ is exactly that.” He added, “It cannot be restyled as an ‘excise’ tax on the alternate ‘privileges’ of receiving revenue in Seattle or choosing to live in Seattle.”

The City is expected to appeal the decision, but many, including the new mayor Jenny Durkan, are realizing that the chances of ultimately seeing an individual income tax in Seattle are relatively slim. In a Facebook Live session, Mayor Durkan called the tax a “long shot.”


Washington is one of seven states that does not impose a personal income tax. But on July 10, 2017, the Seattle City Council approved an income tax on its wealthy residents. The tax would apply a 2.25 percent levy on total income above $250,000 for individuals and $500,000 for married couples filing jointly.

The tax on high earners would have applied to income earned after January 1, 2018. Collection of 2018 taxes would have begun April 15, 2019. However, given Judge Ruhl’s November 22 ruling, this tax will not go into effect unless that ruling is overturned which seems unlikely.

How we can help

Other Washington cities and state legislators are watching the Seattle income tax closely to determine if there may be an opportunity to impose an income tax in Washington. We can help assess your state and local tax situation so you can address your tax exposure and compliance obligations.