The groups filed an amicus brief July 16 in Douglas County Superior Court, supporting a lawsuit filed by the Washington Farm Bureau and some of its members challenging the tax’s constitutionality.
Farmers and ranchers own capital gains subject to the tax, according to the brief. Producers know the tax takes effect Jan. 1 and are speeding up sales of assets to avoid the tax, even it means accepting less money, the brief claims.
“There is nothing speculative or theoretical about it,” the brief states. “The interests at stake for farmers are direct and substantial.”
The capital gains tax was passed this year by Democratic lawmakers. The 7% tax will apply to income over $250,000 gained by selling some long-held assets, including shares in a business partnership.
The Farm Bureau and Freedom Foundation, a conservative think tank, filed lawsuits in Douglas County in Central Washington to overturn the tax. Judge Brian Huber combined the suits into one case July 13.
Huber also allowed in the record an amicus brief prepared by Wenatchee lawyer Allison Foreman on behalf of the farm groups.
The Washington State Tree Fruit Association, Washington State Dairy Federation, Washington Cattlemen’s Association, Hop Growers of Washington, Washington State Sheep Producers, Washington Winegrowers Association, Northwest Horticultural Council and Whatcom Family Farmers signed the brief.
The brief re-enforces the leading role that farmers have taken in opposing the capital gains tax. Opponents argue the tax violates the state constitution because it does not tax all income the same.
The state denies it’s a tax on income. The state calls it an excise tax on the transaction of selling capital assets.
The Attorney General’s Office has moved to have the lawsuits tossed out. The state argues that farmers and other plaintiffs have no standing to sue because they haven’t been taxed yet.
According to the brief submitted by Foreman, farmers are challenging the tax’s constitutionality, not its application.
If the attorney general’s office can’t get the suit dismissed, it hopes Judge Huber will grant a motion to move the case to Thurston County, where the Department of Revenue is based.
Foreman stated that moving the suit would be convenient for state officials, but not just.
“Farmers affected by the tax live in Douglas County and have the right to pursue justice here, near their fields, not hundreds of miles away in the seat of state government,” the brief states.
Huber is the county’s only Superior Court judge. At the hearing July 13, he told lawyers to schedule another hearing on the attorney general’s motions, saying he wanted more time to read the briefs.
A hearing has not yet been set.
Huber also is considering whether to grant intervenor status to the Washington Education Association and the Edmonds School District to defend the tax. Capital gains taxes will go into education accounts.
