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Washington’s I-1366 Ruled Unconstitutional

  • Jan 21, 2016 | Gail Cole

 Tim Eyman's Initiative 1366 ruled unconstitutional.

In November 2015, 51.52% of Washington State voters approved Initiative 1366, which sought to reduce the state sales tax rate from 6.5% to 5.5%, “unless the legislature refers to the ballot for a vote a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes and majority legislative approval for fee increases.”

Opponents sued to keep it off the ballot, and in August 2015, King County Superior Court Judge Dean Lum found the initiative to “exceed the initiative power.” Nonetheless, he allowed it on the ballot. The Washington Supreme Court also questioned its legality but allowed the voters to have their say. A small majority of voters gave it the thumbs up.

I-1366 was again challenged on the grounds that it addressed two subjects: a state sales tax cut and a constitutional amendment (ballot initiatives may only address one subject). Meanwhile, as the fate of the initiative was being decided, state legislators struggled to deal with it in the event it should stand. If the state sales tax were to drop by 1%, the state would lose approximately $8 billion in sales tax revenue through the middle of 2021.

The case was heard in King County Superior Court on Tuesday, January 19, 2016. Today, January 21, 2016, Judge William Downing ruled that I-1366 violates the Washington Constitution and is therefore “void in its entirety.”

Beyond dispute

According to the opinion:

“It really is beyond dispute that the impetus behind I-1399 was to further the goal of adoption of a constitutional amendment requiring a two-thirds vote of the legislature for any tax increase. It is also beyond dispute that a constitutional amendment cannot be adopted by initiative but must first be ‘proposed’ by the legislature and thereafter submitted to a popular vote.”

Washington’s amendment process “is intended to foster debate and careful consideration.” I-1399 “either blithely or belligerently undercuts that process. Even if the 2016 legislature were not facing a daunting and immediate challenge to solve the school funding crisis, the prospect of a severe budget cut to take effect in April (said to amount to $1.4 billion in the first year) would greatly impede the intended deliberative process; in the operative reality, it renders it an impossibility.”

“The initiative,” said Judge Downing, “must be struck down in its entirety” No. 15-2-28277-8 SEA Findings of Fact and Conclusions of Law and Order).

As a result of the ruling, the Washington state sales tax rate will not decrease on April 1, 2016.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.