(The Center Square) – If the Washington state Legislature were to enact a wealth tax as proposed in recent years, it would face significant legal challenges and a “realistic possibility” of being overturned by the state Supreme Court for violating the state constitution’s uniformity clause, according to a new memo from the State Attorney General’s Office obtained by The Center Square.
The March 7, 2025, memo written by Assistant Attorney General Andrew Krawczyk and sent to Gov. Bob Ferguson’s Office stated that if such a tax faced a legal challenge, “it is difficult to predict the outcome, but it is a realistic possibility for a Court to find that it violates uniformity.
“The provisions that pose the greatest risk are the $50 million threshold exemption and the credit for similar taxes paid to another state,” the memo states further.
Under Washington state’s Constitution, all classes of property must be taxed at a uniform rate and no more than 1%, which the legal memo states “placed stringent limitations on the authority of the state and local governments.” While state law allows the Legislature to create exemptions within a property tax, “there remains, however, an unanswered question with respect to the Legislature’s power to enact property tax exemptions by general law. Namely, is that power limited to a “full” exemption or can the Legislature enact a partial exemption?”
The memo also concluded that placing a $10 million cap on the tax would “would increase the chance” of violating the state Constitution.
Washington Policy Center Senior Researcher Paul Guppy told The Center Square that the memo’s author was “being cautious, because it is illegal.”
“What is the point of having a constitution if the leaders of the state don’t follow it?,” he asked. “You don’t need to be a lawyer to understand the uniformity clause. The people who drafted it … knew it wasn’t technical. It was plain English.”
Despite the reservations expressed in the memo about the tax’s legality, Guppy said he’s not convinced it won’t eventually clear the Legislature and potentially even the State Supreme Court. He cited the 2023 Quinn decision in which the state’s high court upheld a tax on the income derived from the sale of capital gains by concurring with the Legislature’s claim that it was an excise tax.
“That opinion has all kinds of irrelevant rhetoric about our inequitable tax code and the financial burden,” Guppy said. “Those are all fine as far as having a political opinion goes, but that’s not what justices are supposed to do. If the state Supreme Court leans their way, they could definitely pass a wealth tax in the future.”
Last year, the state Legislature proposed a wealth tax of $10 per $1,000 value on certain financial assets, such as stocks and bonds, over $50 million.
Earlier this year, Rep. Joe Fitzgibbon told The Center Square that “a wealth tax did not have sufficient support to pass out of the House in 2025 and it still does not.” The Center Square reached out to Fitzgibbon for possible comment on whether that remained the case and the possibility of a wealth tax being introduced next session.
In a statement, Fitzgibbon wrote that “the House does not plan to advance a wealth tax in 2027. I do not expect that the Legislature will seriously consider a wealth tax in the coming biennium.”
Although the wealth tax didn’t pass, the Legislature this year enacted an income tax with an exemption for anyone making less than $1 million a year. That tax now faces both a lawsuit as well as a potential initiative to overturn it after the state Supreme Court blocked a referendum effort.
A separate legal memo written by the AGO for Ferguson’s Office in December noted that the income tax would be placed “squarely within the type of taxes that our Supreme Court has invalidated under the uniformity and levy limit requirements” of the state Constitution.
