The Longview City Council unanimously adopted a local income tax ban resolution at its October 28 meeting. This means at least one county and ten Washington cities have now acted to ban a local income tax including Battle Ground, DuPont, Granger, Kennewick, Longview, Moses Lake, Richland, Spokane, Spokane Valley, Union Gap and Yakima County. Yakima voters this November will also consider a charter amendment to ban a local income tax.
From a summary of the Longview income tax ban resolution:
“Cities across Washington are acting to ban a local income tax. The effort comes as state lawmakers this year enacted Washington’s first statewide income tax, on capital gains income, a bill whose constitutionality is being challenged in the courts. Other cities have already acted to prevent a local income tax.”
Here is the Longview income tax ban resolution:
“The imposition of a local income tax on the businesses and residents of the City of Longview is prohibited. Such a tax would be in direct conflict with the high value the City places on promoting economic development through the attraction and expansion of financially healthy, family wage paying employers. Small businesses are the backbone of our local, regional, state, and national economy and it is imperative that the City not put unnecessary hurdles in the way of their success. As such, the Longview City Council prohibits the imposition of a local income tax in the event a local income tax is determined legal and permissible by the Washington State Supreme Court or the Washington State Legislature.”
As for the economic benefit of not having an income tax, for years, the Washington Department of Commerce has made the state’s no-income-tax policy a major selling point for its “Choose Washington” jobs promotion campaign. According to Commerce Department officials:
“We offer businesses some competitive advantages found in few other states. This includes no personal or corporate income tax.”
Former Washington State Treasurer Duane Davidson also agrees that having no income tax is an important advantage to the people of the state. At Washington Policy Center’s May 2019 Solutions Summit held in Spokane, Treasurer Davidson described the importance of avoiding an income tax and explained why not having one is a positive policy for Washington.
Local governments are passing these bans in response to a surprising 2019 Court of Appeals ruling that opened the door to a flat 1% local income tax. The state Supreme Court let this ruling stand by not hearing the appeal.
Earlier this year the legislature adopted an unconstitutional capital gains income tax (while refusing to pre-empt cities from imposing a local version) with the stated goal from supporters of using the courts to open the door to income taxes across the state. The legislature has also funded budget studies to convince Washingtonians to support an income tax, with a taxpayer funded commission now traveling the state to do the same.
In response to these ongoing efforts to impose an income tax, the Tri-City Herald editorial board wrote in September after Kennewick adopted an income tax ban:
“If enough individual communities rise up against just the idea of an income tax, perhaps lawmakers will stop trying to force the issue and instead focus on other tax reforms that would be more acceptable to the general public . . . Other cities should add momentum to this anti-tax drive, including Richland, West Richland, Pasco, Benton City, Prosser and Connell. The more who join in the message, the more forceful it will be.”
Indeed. Other cities and counties should do the same and signal to citizens and businesses that they will protect their economic competitive advantage by prohibiting the imposition of a local income tax.
Additional Information
Washington cities move to prohibit local income taxes
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October 29, 2021 at 10:23AM
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Longview joins growing lists of WA cities banning a local income tax - Washington Policy
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