Seattle City Council Approves Local Income Tax On High Earners

Jul 11, 2017

 

The Seattle City Council voted 9-0 Monday to pass a citywide income tax on high earners.

The 2.25 percent tax applies to annual income over $250,000 for an individual and $500,000 for a couple filing jointly.

 

Mayor Ed Murray supports the tax and is expected to sign it into law. 

The tax is scheduled to apply to income earned in 2018, though proponents say they expect a lawsuit that may delay its implementation. 

Legal experts view the city's legislation as a test case that may determine whether citywide income taxes are legal in Washington state.

Currently, there are no state or local income taxes in Washington. The state Supreme Court decided in 1933 that the state Constitution allows only for a flat 1 percent tax on income. Proponents of Seattle's income tax say they hope the modern court will reverse that ruling. 

A 1984 state law also made it illegal for cities to tax net income. Seattle leaders crafted the city's law to get around that restriction. 

Copyright 2017 KNKX Public Radio.