United States: Lane Powell Files Petition for Certiorari to SCOTUS Regarding Washington Capital Gains Tax

Published on Aug 29, 2023

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.