State wants to collect capital-gains income before state Supreme Court rules – The State Supreme Court will hear oral arguments on January 26, 2023, on the constitutionality of the law that passed in 2021 which levies a 7% tax on capital-gains income above $250,000 for the sale of stocks, bonds and businesses. As previously reported, a Douglas County Superior Court judge ruled in March 2022 that the capital-gains income tax “is declared unconstitutional and invalid and, therefore, is void and inoperable as a matter of law.”
In the meantime, the Dept. of Revenue (DOR) has continued with rulemaking as if they are going to collect the tax, despite the fact that it currently has the status of invalid by the Douglas County Superior Court. In October 2022, the Citizen Action Defense Fund (CADF) sent the DOR a letter demanding that the agency stop its rule-making activities to implement the capital-gains income tax, and asked the Joint Administrative Rules Review Committee for a review of the statutory authority for DOR’s capital-gains income-tax rules.
Just last week, Attorney General Bob Ferguson’s office filed a motion with the state Supreme Court asking them to allow the DOR to collect the capital-gains income tax before the Courts make their final ruling on the case (if the court hasn’t ruled by April 15). More to come on this in the coming months.
AGC’s Construction Advocacy Fund (CAF) made a financial contribution to Opportunity for All Coalition, which is the effort working to overturn the capital-gains income tax. If you have any questions, contact Michele Willms.