Seattle does not have an income tax. The city tried to enact one in 2017, but Washington courts struck it down before a dollar was collected, and the constitutional barrier that killed it is still in place. If you live or work in Seattle, no local tax applies to your wages, salary, or other income.
What Seattle Tried to Pass in 2017
The Seattle City Council passed Council Bill 119002, which became Ordinance 125339, in July 2017. The law would have imposed a 2.25% tax on total income above set thresholds, drawn from the same total income figure on a taxpayer’s federal return. The tax applied only to income above the threshold, not every dollar earned.1Seattle City Council. Record No CB 119002
The thresholds were:
- Single, head of household, or married filing separately: 2.25% on income above $250,000
- Married filing jointly: 2.25% on income above $500,000
Those thresholds were set to adjust each January starting in 2019 using the Consumer Price Index for the Seattle-Tacoma-Bremerton area. The ordinance defined a “resident” as anyone who maintained a home in Seattle for the full tax year, or who kept a permanent residence in the city and spent more than 183 days there.1Seattle City Council. Record No CB 119002
None of it took effect. The ordinance was challenged almost immediately, and no returns were ever filed or collected.
Why the Courts Struck It Down
A trial court invalidated the tax, and the Washington Court of Appeals affirmed in 2019 in Kunath v. City of Seattle. The appeals court held that under decades of Washington Supreme Court precedent, income is property, and Seattle’s two-rate structure taxed that property at non-uniform rates. The ordinance created two classes of income, one taxed at 0% below the threshold and one taxed at 2.25% above it, and that alone violated the state constitution’s uniformity requirement.2FindLaw. Kunath v City of Seattle
The Washington Supreme Court declined to take the case and later denied review, leaving the Court of Appeals ruling as the final word.3Washington State Courts. City of Seattle – Reply to Answer to Petition for Review
The Constitutional Problem: Income Is Property
The root issue sits in Article VII, Section 1 of the Washington State Constitution. It requires that “all taxes shall be uniform upon the same class of property” and defines property to “mean and include everything, whether tangible or intangible, subject to ownership.”4Washington State Legislature. Washington State Constitution Because income counts as something subject to ownership, any tax on income is treated as a property tax and has to apply at a single, uniform rate.
The Washington Supreme Court established this reading in 1933 in Culliton v. Chase, striking down a graduated state income tax that voters had approved by a 70% margin. The court held that graduated rates imposed higher taxes on larger amounts of the same class of property, violating uniformity.5vLex United States. Culliton v Chase, 174 Wash 363, 25 P2d 81 (Wash 1933)
Three years later, the legislature tried relabeling a new income tax as a tax on “the privilege of receiving income.” In Jensen v. Henneford (1936), the court rejected the label, holding that the right to receive income is an element of ownership and taxing that right is the same as taxing the income.6Washington State Department of Revenue. Chapter 5 – Principal Constraints
That pair of decisions has held for more than 90 years. Washington voters have rejected constitutional amendments to allow an income tax multiple times. Nothing a city council drafts can get around it, because the problem is in the state constitution itself.
State Law Also Blocks Local Income Taxes
On top of the constitutional barrier, there is a statutory one. RCW 36.65.030 says that “a county, city, or town shall not levy a tax on net income.”7Washington State Legislature. Washington Code 36.65.030 – Tax on Net Income Prohibited The Kunath court actually struck this statute down on procedural grounds, finding that the original bill creating it violated the legislature’s single-subject rule. That did not save Seattle’s tax, because the constitutional barrier stood on its own.2FindLaw. Kunath v City of Seattle
Lawmakers and voters have since moved to shore up the statutory ban. In 2024, the legislature passed Initiative 2111, which addresses taxes on personal income.8Washington State Legislature. Initiative 2111 House Bill 1588 from the 2019-20 session proposed broadening RCW 36.65.030 to cover every form of income, with language telling courts to “construe broadly” the prohibition on any local income tax on individuals or households.9Washington State Legislature. House Bill 1588
So Seattle faces two independent obstacles. Only a constitutional amendment can clear the first. The second is being reinforced, not relaxed.
The One Tax on High Earners That Did Survive: Capital Gains
While a direct income tax remains blocked, Washington found a path that held up in court. In 2021, the legislature passed a tax on long-term capital gains structured as an excise tax rather than an income tax. In Quinn v. State (2023), the Washington Supreme Court upheld it, reasoning that the tax applies to the act of selling or exchanging capital assets, not to the gains themselves. Owning appreciated stock does not trigger the tax; selling it does. The court called this “consistent with a long line of precedent recognizing excise taxes as those levied on the exercise of rights associated with property ownership.”10Washington State Courts. Quinn v State, No 100769-8
The tax originally imposed a flat 7% rate on gains above $250,000 per year. Starting with the 2025 tax year, the legislature expanded it to tiered rates with a $1,000,000 standard deduction:11Washington Department of Revenue. New Tiered Rates for Washingtons Capital Gains Tax
- First $1,000,000 in taxable gains: 7%
- Gains above $1,000,000: 9.9%
Major categories of assets sit outside the tax. Real estate sales are excluded regardless of property type or holding period. Transactions inside retirement accounts such as 401(k)s, IRAs, and defined benefit plans do not count, and neither do assets held for a year or less.12Washington Department of Revenue. Frequently Asked Questions About Washingtons Capital Gains Tax This is a state tax, not a Seattle tax, and it reaches only certain investment transactions.
What Could Change This
Seattle’s income tax ordinance remains dead, and the constitutional barrier is intact. The debate has moved to Olympia. Senate Bill 6346, introduced in 2026, proposes a 9.9% state income tax with a $1,000,000 standard deduction and includes a provision to override Initiative 2111’s income tax ban. Critics have noted that the income threshold would be set by statute rather than locked into the constitution, meaning a future legislature could lower it.
Washington voters have rejected income tax proposals repeatedly since the 1930s, and any constitutional amendment allowing graduated rates would have to pass a statewide vote. For now, if you earn income in Seattle, the city has no legal authority to tax it, and nothing on the current ordinance books requires you to file a local income tax return.