Washington’s newly approved “millionaires tax” is already facing a legal challenge, setting up a high-stakes court fight over whether the state can impose an income tax.
The lawsuit, filed by the Citizen Action Defense Fund, argues the 9.9% tax on income above $1 million violates the state constitution.
Former Washington Attorney General Rob McKenna is leading the legal challenge, joined by former state Supreme Court Justice Phil Talmadge.
The tax, passed by Democrats last month without Republican support, targets high earners and is expected to generate more than $3 billion annually once it takes effect in 2028.
Supporters say the measure will fund schools, health care, and tax relief while impacting fewer than 1% of households.
“When Washingtonians hear the benefits that flow to working families, to businesses large and small, to kids in schools with those free meals, it is going to make a huge, huge difference,” Gov. Bob Ferguson said when signing the bill into law.
Opponents argue the law is unconstitutional and could pave the way for a broader income tax.
“This is not about, as one of the speakers said, hope and change. There’s a lot of fear about this tax,” Citizen Action Defense Fund Executive Director Jackson Maynard said.
At the center of the lawsuit is a long-running legal question in Washington: whether income qualifies as property under the state constitution. McKenna has argued that it does, meaning any such tax must meet strict limits on property taxation.
“As you all know, it isn’t the Legislature’s role or the state Supreme Court’s job to rewrite our Constitution to override a decision the voters made and have repeatedly reaffirmed,” McKenna said.
State leaders have signaled they are ready to defend the law in court.
“I’m very familiar with Rob McKenna,” Ferguson told FOX 13. “As AG, he was opposite side of many cases we brought, and we never lost a case when Rob litigated the other side, so we feel confident that we’ll prevail against him yet again in this lawsuit.”
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