SEATTLE — Former Washington state Attorney General Rob McKenna has filed a lawsuit challenging the state’s recently passed capital gains tax.
The lawsuit, which was filed Thursday in Douglas County Superior Court, is the second lawsuit filed against the tax.
Gov. Jay Inslee signed the measure into law May 4, imposing a 7% tax on the sale of stocks, bonds and other high-end assets in excess of $250,000 for both individuals and couples.
The most recent lawsuit was filed on behalf of a coalition of farmers, business owners, investors and the Washington State Farm Bureau.
It claims the law is unconstitutional by labeling the capital gains tax as an excise tax – which the group says are typically taxes on privileges like owning a business or transactions on gas, cigarettes or alcohol – instead of an income tax.
“If this is an excise tax, it’s an illegal one,” McKenna said in a statement.
However, Inslee has said he considers the capital gains tax an excise tax and has said he believes it will survive legal challenges.
It's expected to bring in $415 million in 2023, the first year the state would see money from the tax, which would start in January 2022.