Income/Franchise:
Washington Supreme Court Grants State’s Motion to Stay Capital Gains Tax Ruling While Case is Pending
Case No. 100769-8, Wash. (Order 11/30/22). The Washington Supreme Court (Court) granted Washington State’s motion to stay “pending this Court’s final decision in this matter” a trial court judge’s ruling from earlier this year, which held that Washington’s new tax on long-term capital gains earned by some individuals from the sale or exchange of certain capital assets at the rate of 7% beginning January 1, 2022 [see E.S.S.B. 5096 (2021) and previously issued Multistate Tax Alert for more details on this new law], constitutes an “income tax” under state caselaw (rather than an “excise tax”) that does not meet state constitutional requirements and, therefore, is unconstitutional and invalid. The State has since appealed the trial court’s ruling to the Washington Supreme Court.
Note that while this appeal is pending, the Washington Department of Revenue has stated that it will continue to provide guidance to the public regarding its implementation of the tax [see State Tax Matters, Issue 2022-45, for more details on related administrative guidance under development]. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
