Capital Gains Challenge Filed in Douglas County

The first official challenge to Washington State's capital gains tax was filed Wednesday.

According to a press release, the Freedom Foundation and Seattle firm Lane Powell filed suit in Douglas County Superior Court on behalf of seven residents to overturn the soon-to-be law.

Senate Bill 5096, which will impose a 7% tax on certain capital gains after the first $250,000, was passed by the state senate by just one vote Sunday and will soon be signed by Governor Inslee.

The Freedom Foundation cites two points of contention. The first is that the state Constitution demands that taxes on property must be levied uniformly. Plaintiffs also allege the new tax violates the Commerce Clause of the U.S. Constitution by taxing the sale of capital held out-of-state.