Legal Challenges Certain as Ferguson Prepares to Sign new Income Tax

OLYMPIA, WA – A bill to institute a state income tax (SB 6346) has been on Gov. Bob Ferguson’s desk for five days, and he’s expected to sign it but opponents are gearing up for legal challenges once he does.

Ferguson has 20 days from the time of delivery to act on the legislation, meaning it will likely be signed before April 2, 2026.

Three key opponents of the income tax talked to The Center Square about what they expect will happen after Ferguson signs the legislation into law.

Senate Minority Leader John Braun, R-Centralia, told The Center Square in a Wednesday interview, he expects wherever the challenge comes from, it will be soon.

“I wouldn’t be surprised if there’s a couple legal challenges. The legalities are very, very obvious to anyone who wants to take the time to read the Constitution,” Braun said .

The majority Democrats pushed this issue now hoping the left leaning makeup of the Washington Supreme Court is on their side, he added.

“I think they believe they have an opening because of the nature of the State Supreme Court,” Braun said. “Can’t go in too much of this topic, but it is interesting that we have so many state Supreme Court members up for reelection this fall. That certainly adds a new, and interesting dynamic.”

Three justices are departing by the end of 2026. Long-serving Justice Barbara Madsen is retiring next month. Justice Raquel Montoya-Lewis is not seeking reelection, and Justice Charles Johnson is required to retire at the end of 2026 when he turns 75.

“In no case does any kind of legal action happen very fast. That’s going to take a year, I would think, minimum, maybe two years,” Braun said suggesting the lower courts are likely to follow the precedent of rulings against an income tax. “But the real test is with the State Supreme Court.”

If Ferguson signs it like he promised, the tax on income above one million dollars takes effect January 1, 2028, with the first payments due in 2029.

It is projected to raise $3-$4 billion annually for education, tax relief for some businesses and families and to boost the general fund.

What about a citizen initiative to overturn the income tax?

“There is a lot of talk out there about an initiative. I expect one in the next two years. I don’t know whether it’ll be this year or next year. The people are really worked up about this,” Braun said. “I haven’t talked to a single person that’s happy about this, and I’ve talked to a lot of them that are just downright mad about it. So, you can’t bottle that, and so maybe that means an initiative sooner rather than later is smarter. I don’t know.”

“I wouldn’t say so much as if the team comes here, but I would say, which players decide to come to that particular team, right? Because almost all of those players are going to make north of a million and they’re going to be subject to the income tax, and they’re going to be calculating what their net income is going to be,” Gildon said. “You’re talking about the tax layering effect of the B&O tax, the income tax, the sales tax, the property tax, all of the taxes that we have, that layer one on top of another. And whether you’re talking about business or basketball, tax policy matters.”

On Tuesday, ESPN reported that the “NBA will hold a vote at the board of governors meetings next week to explore adding expansion teams exclusively in Las Vegas and Seattle with the two new franchises being targeted to start play in the 2028-29 season.”

Sen. Shelly Short, R-Addy, told The Center Square Wednesday she is hearing plenty of concern about the tax from her constituents in northeast Washington.

“You know, we talked a lot about the LLCs, S Corps, and things like that. Small businesses being impacted by the income tax. Well, the piece that finally struck me was the businesses where the money that they make is considered income, personal income,” said Short, noting those businesses falling under the income tax won’t have the capital to reinvest, create more jobs or potentially even stay afloat.

Opponents of the income tax argue rolling back the higher estate tax rate is an acknowledgment that tax the rich policies lead to capital flight.

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