A tax, a lawsuit, and a ballot
In March 2026, the legislature passed Senate Bill 6346, a 9.9% tax on household income above $1 million. Governor Bob Ferguson signed it on March 30. Supporters called it a long-overdue fix for one of the most lopsided tax systems in the country. Opponents said it was unconstitutional before the ink dried.
How close it was
- Rate
- 9.9% above $1M
- Applies to income from
- Jan. 1, 2028
- First payments due
- 2029
- Projected revenue
- $3.5–4B a year
Now the tax faces two tests at once.
At the ballot box
Initiative 645 would repeal the tax. Voters decide on November 3, 2026, and a yes vote means repeal. It would also bar local governments from taxing income.
In the courtroom
A lawsuit filed April 9 in Klickitat County Superior Court says the tax violates the state constitution. The lead attorneys are former Attorney General Rob McKenna, a Republican, and former Justice Phil Talmadge, a Democrat.
The Supreme Court has already ruled once. On May 4, it unanimously held that the law can't be challenged by referendum. That decision said nothing about whether the tax itself is constitutional. That question is still coming, and it starts with a ruling from 1933.
The 42nd. For nearly a century, Washington has been one of a handful of states with no personal income tax, and the reason is a court ruling, not a statute.
The words that decide it
Washington's constitution handles taxes in Article VII. Two rules matter here. Section 1 requires taxes on the same class of property to be uniform, and it defines what property is. Section 2 caps regular property tax levies at 1% of a property's value each year.
Tap the highlighted phrases to see what each one does.
All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word “property” as used herein shall mean and include everything, whether tangible or intangible, subject to ownership.
Try the ownership test
Article VII asks one question: can it be owned? Decide for each item.
- Your house
Land and a building you hold title to. It's the textbook case.
- Shares of stock
You can't touch them, but you own them and can sell them. Intangible property.
- Your checking account
A bank balance is a claim you own against the bank. Intangible, and owned.
- A patent on your invention
You can license it, sell it, or leave it to an heir. The law treats it as owned.
- Your paycheck
Once it's paid, it's yours to spend, save, invest, give away, or pass on. That's ownership.
All five pass the same test. Each can be bought, sold, saved, given away, or inherited. Article VII doesn't sort property by where it came from or when it arrived.
1930. Voters approved that definition just two years before they passed an income tax, and the court used those words to strike the tax down.
Seventy percent said yes. Five justices said no.
The Depression hit Washington hard, and property owners were losing land to tax bills they couldn't pay. In November 1932, voters passed two initiatives together: one to limit property taxes, and Initiative 69, a graduated income tax with rates from 1% to 7%, to shift the load off property.
Initiative 69 passed with about 70% of the vote. It never collected a dollar.
Voters, November 1932
About 70% yes
Supreme Court, September 1933
5 to 4 against
A Seattle insurance agent, William Culliton, sued state tax commissioner Samuel Chase. In September 1933, the court struck the tax down. The lead opinion's reasoning fits in five steps:
- Income is something a person owns.
- Article VII says anything subject to ownership is property.
- Property in the same class must be taxed at one uniform rate.
- A graduated tax charges different rates on different amounts of income.
- So a graduated income tax violates the constitution.
The legislature answered in 1934 by asking voters to delete the definition of property from the constitution. Voters said no. The definition is still there.
Not quite. It was a plurality opinion: five justices agreed on the result, but not all of them signed the lead opinion's reasoning. Critics of the ruling have pointed to that for decades.
Ninety-three years in one timeline
The same question keeps coming back in new forms. Filter by where each fight happened.
- 1889StatehoodWashington's first constitution requires property taxes to be uniform.
- 1930Voters define propertyAn amendment defines property as everything, tangible or intangible, subject to ownership.
- 1932Initiative 69 passesA graduated income tax of 1% to 7% wins about 70% of the vote.
- 1933Culliton v. ChaseThe Supreme Court strikes down I-69, 5–4, holding that income is property.
- 1934Voters keep the definitionThe legislature asks voters to delete the definition of property. They decline.
- 1936Jensen v. HennefordAn income tax renamed a tax on the privilege of receiving income is struck down anyway.
- 1951Power, Inc. v. HuntleyA corporate net income tax falls under the same rule.
- 2010I-1098 failsAn income tax on high earners is rejected, with roughly 64% voting no.
- 2017Seattle taxes high earnersThe city adopts a 2.25% tax on income above $250,000.
- 2019Kunath v. City of SeattleThe Court of Appeals strikes down Seattle's tax. The Supreme Court declines review.
- 2021Capital gains taxThe legislature passes a 7% tax on long-term capital gains above $250,000.
- 2023Quinn v. StateThe Supreme Court upholds it, 7–2, as an excise tax on sales, and leaves Culliton in place.
- Mar 2026SB 6346 signedA 9.9% tax on household income above $1 million becomes law.
- Apr 2026Lawsuit filedChallengers sue in Klickitat County, citing Culliton and the 1% cap.
- May 2026Heywood v. HobbsThe Supreme Court unanimously blocks a referendum, without ruling on whether the tax is constitutional.
- Jul 2026I-645 qualifiesA repeal initiative makes the November ballot.
- Nov 2026Voters decide I-645A yes vote repeals the tax.
- 2027–28Supreme Court ruling expectedThe court decides whether Culliton still controls.
Yes. In 1895, the U.S. Supreme Court struck down a federal income tax in Pollock v. Farmers' Loan & Trust Co. Congress didn't pass around it. The country amended the Constitution, and the 16th Amendment was ratified in 1913.
What uniform means for a paycheck
This is the heart of the challenge. Every dollar of income is the same kind of property. Under SB 6346, a household's first $1 million faces a 0% rate and every dollar above it faces 9.9%. Challengers say that's two rates on one class of property, which is exactly what uniformity forbids.
Under the court's precedent, an income tax has to be flat and no higher than 1%. Move the slider to compare the two.
- SB 6346 tax
- $99,000
- Effective rate
- 4.95%
- Flat 1% on all income
- $20,000
Simplified for illustration. Uses total household income in place of Washington taxable income and ignores deductions and credits. Not tax advice.
“It's just like…”
Supporters lean on a few comparisons. Each one tells you something, though not always what it's meant to. Pick one.
| Feature | Capital gains tax | SB 6346 |
|---|---|---|
| What's taxed | Profit from selling stocks and other long-term assets, above $250,000 | Household income above $1 million, starting from federal AGI |
| Trigger | A sale or exchange | Receiving income during the year |
| Rate | 7% | 9.9% |
| Outcome | Upheld 7–2 in 2023 as an excise tax | Pending |
The capital gains tax survived because the court treated it as a tax on the act of selling an asset. SB 6346 has no sale to attach to. It starts from the same base as a classic income tax, the kind Culliton struck down.
| Feature | Seattle's tax | SB 6346 |
|---|---|---|
| What's taxed | Total income above $250,000 for individuals | Household income above $1 million |
| Trigger | Receiving income as a resident | Receiving income during the year |
| Rate | 2.25% | 9.9% |
| Outcome | Struck down in 2019; review denied | Pending |
This is SB 6346's closest relative: a tax on total income above a threshold. Same structure at a smaller scale, and courts struck it down under Culliton.
| Feature | Massachusetts | SB 6346 |
|---|---|---|
| What's taxed | Income above $1 million | Household income above $1 million |
| Rate | 4% surtax | 9.9% |
| How it was created | Voters amended the state constitution in 2022 | The legislature passed a bill |
| Outcome | In effect | Pending |
Same goal, different route. Massachusetts had a flat-rate rule in its constitution too, so it asked voters to change the constitution first.
Washington would become the 42nd state with a personal income tax. But a head count doesn't answer what Washington's own constitution allows.
States with their own uniformity limits have lived within them. Pennsylvania's income tax is a flat rate for that reason. Illinois' constitution requires a flat rate, and Illinois voters rejected an amendment to allow graduated rates in 2020. Massachusetts kept a flat rate until its voters amended the constitution.
What other states do is a policy argument. What Washington's constitution permits is a legal one.
Yes, at first. A Douglas County Superior Court judge struck it down in 2022. The Supreme Court reversed in 2023. The new lawsuit is likely to follow a similar path: a trial court first, then the Supreme Court.
Why income is property
The question isn't whether Washington can ever have a graduated income tax. It's who gets to decide.
The text has no exception
Article VII defines property as everything, tangible or intangible, subject to ownership. Nothing in that sentence carves out money because it arrived this year instead of last. The moment a paycheck lands, it's owned. It can be spent, saved, invested, given away, or left to your heirs.
The history points one way
Voters adopted the definition in 1930. The court applied it to income in 1933. In 1934, the legislature asked voters to remove it so a graduated income tax could stand. You don't ask to delete a definition unless it covers the thing you want to tax. Voters kept it.
Ninety-three years of precedent
Culliton in 1933, Jensen in 1936, Power, Inc. v. Huntley in 1951, and Kunath in 2019 all applied the same rule. In 2019 the Court of Appeals put it in one line: “a tax on income is a tax on property.” Even Quinn, which upheld the capital gains tax, left Culliton standing.
A new label doesn't change the tax
In 1936, the state tried calling an income tax a tax on the privilege of receiving income. The court looked past the name. SB 6346 begins with federal adjusted gross income and taxes what a household receives in a year. There's no sale or transaction to attach it to, which is what saved the capital gains tax.
There's a front door
When the U.S. Supreme Court blocked a federal income tax in 1895, the country amended its Constitution. Massachusetts amended its constitution before adopting a millionaire tax. Washington has the same option: send an amendment to the voters and let them decide whether income should stay in the definition of property.
A two-thirds vote in both the House and the Senate, then a simple majority of voters at the next general election. SB 6346 passed with simple majorities in both chambers.
The other side
A strong argument has to face the best objections. These are the ones the state and the tax's supporters are most likely to raise.
Culliton was never as solid as it looks
The 1933 decision was a plurality. A tax study published by the state Department of Revenue argues the court wrongly believed an earlier case, Aberdeen Savings & Loan v. Chase (1930), had already held income to be property, and that later courts repeated the mistake as settled law.
Income doesn't fit the property-tax mold
Property taxes are measured by the value of what you own on a given date. Income is a flow over a year. Critics say a cap of “1% of value” makes little sense when applied to income, which suggests the two were never meant to be treated alike.
Precedent can change
The Supreme Court can reaffirm Culliton, narrow it, or overrule it. The state may also argue that the $1 million standard deduction works like a permitted exemption rather than a second tax rate.
The current system is upside down
Supporters point to figures cited by the bill's sponsor, Sen. Jamie Pedersen:
Share of household income paid in state and local taxes.
In their view, the tax fixes a structure that asks the least of those with the most, and the constitutional question shouldn't freeze a 1930s reading in place.
Voters are getting a say anyway
With I-645 on the November ballot, supporters argue the public is already deciding the policy question directly, and the courts should decide only the legal one.
So, is income property?
By the constitution's own words, yes. Article VII calls everything subject to ownership property, and few things are more plainly owned than the money a person earns. Voters wrote that definition in 1930, the Supreme Court applied it to income in 1933, and Washington's courts have followed it ever since.
If income is property, the rest follows. The uniformity rule doesn't require the state to tax every income. It requires that whatever tax the state imposes falls at the same rate on every dollar, whether the income is large or small, and no higher than 1%.
A 9.9% tax that starts at $1 million does the opposite. It taxes the same kind of property at 0% for most households and 9.9% for a few.
Whatever you think about taxing the wealthy, the constitution leaves that choice to the voters. If Washington wants a graduated income tax, the path is the one the country took in 1913 and Massachusetts took in 2022: put an amendment on the ballot and let the people decide.
What happens next
- November 3, 2026Voters decide I-645. A yes vote repeals the tax.
- Klickitat County Superior CourtThe trial court rules on the constitutional challenge. In the capital gains case, the trial judge struck the tax down before the Supreme Court reversed.
- Washington Supreme CourtA final ruling is expected in 2027 or 2028, before collections begin.
- January 1, 2028If the tax survives both, it applies to income from this date, with first payments due in 2029.
Test yourself
1. In what year did the Supreme Court first hold that income is property?
Culliton v. Chase, September 1933.
2. What was the vote?
One vote decided it, and the rule has stood ever since.
3. Why did the 2021 capital gains tax survive?
Quinn called it an excise tax on the sale of assets and left Culliton in place.
4. What test does Article VII use to define property?
Everything, tangible or intangible, subject to ownership.
5. On I-645, what does a yes vote do?
Yes means repeal. No keeps the tax in place.
Sources
- Washington State Standard: Income tax signed in Washington with a legal challenge close behind
- Washington State Standard: After marathon debate, WA House advances income tax
- RSM: Washington State enacts millionaire's tax
- KING 5: Lawsuit filed against Washington's millionaires tax
- KUOW: WA Supreme Court rules against first challenge to millionaires tax
- KIRO 7: Initiative to repeal WA millionaires tax qualifies for November ballot
- Washington State Standard: Ballot fight on WA income tax looks certain
- Post Alley: The property question challenging Washington's new tax
- Davis Wright Tremaine: Will the millionaires' tax survive scrutiny?
- Quinn v. State of Washington (2023), full opinion
- Kunath v. City of Seattle (2019), Court of Appeals opinion
- Washington tax study, Appendix B: Income tax constitutional issues
- Sen. Jamie Pedersen: Millionaires Tax passes as 2026 session ends
- The Startup Law Blog: The Washington income tax legal challenge