UPDATE: On September 15, 2023, SCOTUS ordered the State of Washington to respond to our Petition for Certiorari. This is a positive step toward the Court granting review. The State has until October 16, 2023, to file its brief.
On Monday, August 21, Lane Powell filed a petition for certiorari to the U.S. Supreme Court (SCOTUS) asking the Court to review the Washington State Supreme Court decision in Quinn v. Dep't of Revenue.
The petition asks SCOTUS to address the constitutional flaws with the Washington capital gains tax resulting from the state Supreme Court's ruling that the tax is an excise tax. By explicitly calling the capital gains tax an excise tax, the Washington Supreme Court created a federal law problem. The federal problem is two-fold: (1) The decision violates the U.S. Constitution by allowing the state to tax transactions that occur outside of the state's borders; and (2) the decision conflicts with Ninth Circuit precedence, San Francis Foundation v. Christie’s, Inc., where the Court of Appeals invalidated a California law that required the seller of a work of art to pay the artist a percentage of the sale price even if that sale took place entirely in another state if the seller was a California resident. Washington with its capital gain tax is similarly — and impermissibly — attempting to tax transactions that occur entirely in other states simply because it involves a Washington resident.
For this case to be heard, four of the nine Justices must agree to accept the case. This case is worthy of the Court's time and attention due to its significant, national impact.
Stay tuned for more updates.
Lane Powell’s team of tax attorneys is here to answer your questions. For more information, contact: Callie Castillo, Scott Edwards, Lewis Horowitz, Aimee Miller, Aaron Johnson, Gary Kirk.
Before proceeding, please note: If you are not a current client of Lane Powell PC, please do not include any information in this email that you or someone else considers to be confidential or secret in nature. Prior to the establishment of a lawyer-client relationship, unsolicited emails from non-clients containing confidential or secret information cannot be protected from disclosure.