The ink is barely dry on Washington state’s new income tax targeting high earners, and it is already headed for a courtroom fight that could determine whether the policy survives at all.
Signed into law on March 30 by Governor Bob Ferguson, the measure imposes a 9.9 percent tax on income exceeding one million dollars for individuals and households. It marks a sharp departure for a state that has long resisted adopting a traditional income tax.
Supporters have framed the law as a targeted effort aimed at the wealthiest residents. Critics, however, argue the impact may reach further than advertised, particularly for small business owners whose earnings are often reported as personal income. That concern is now central to a lawsuit challenging the measure’s legality.
Curt Nuccitelli, owner of Spirit Transport Systems, is among the plaintiffs. His company employs 14 people, and like many small business operators, its profits flow through to his personal tax filings.
He argues the new tax could limit his ability to expand operations, invest in equipment, or raise wages for his employees. In his view, even incremental pay increases become harder to sustain under the added tax burden.
The legal challenge hinges on a long-standing interpretation of Washington’s constitution. A 1933 state Supreme Court ruling classified income as property, meaning it must be taxed uniformly and cannot exceed a one percent rate. Opponents of the new law argue that the 9.9 percent tax clearly conflicts with those requirements, setting up a direct constitutional test.
Attorneys involved in the case, including those working with the Citizen Action Defense Fund, contend the language of the constitution leaves little room for interpretation. They argue the law not only exceeds the cap but also applies unevenly, targeting a specific income bracket rather than maintaining uniformity across taxpayers.
State officials are preparing to defend the measure. The Washington Attorney General’s Office has indicated it expects to prevail in court, though it has not yet detailed its full legal strategy. The case will likely revisit fundamental questions about how income is classified and whether past rulings still apply in the current legal and economic landscape.
Beyond the courtroom arguments, the policy debate is already taking shape. Critics warn that introducing an income tax, even one aimed at high earners, could alter the state’s economic positioning, particularly its reputation as a base for major companies and startups. Supporters, on the other hand, view the measure as a way to generate revenue from those most able to pay.
For now, the outcome rests with the courts.
