The Washington State Department of Revenue holds a hybrid in-person/virtual public hearing on the capital gains excise tax.
This proposed new rule seeks to clarify administrative aspects of the excise tax on capital gains such as proper filing procedures and penalties related to this excise tax. Effective January 1, 2022, Chapter 82.87 RCW imposes an excise tax on sales or exchanges of long-term capital assets. In March of 2022, the Douglas County Superior Court ruled in Quinn v. State of Washington that the excise tax on capital gains does not meet state constitutional requirements and, therefore, is unconstitutional and invalid. The State has appealed the ruling to the Washington Supreme Court. While the appeal is pending, the Department will continue to provide guidance, such as this rule, to the public regarding the tax as a courtesy. This rule will apply only if the tax is ruled constitutional and valid by the Washington Supreme Court.