Support for income tax legal challenge: AWB is contributing financial support to the lawsuit challenging Washington’s new income tax. The decision follows AWB’s strong opposition to the income tax bill during the 2026 legislative session — and aligns with the association’s historical position on the income tax issue going back to the 1930s.
“Washington’s economy has been built largely on three key competitive advantages – a best of class workforce, our low-cost electricity, and the lack of an income tax,” AWB President Kris Johnson said. “We are hopeful this lawsuit will be successful in retaining one of these key advantages.”
The lawsuit. Filed by former Washington Attorney General Rob McKenna, former Washington Supreme Court Justice Phil Talmadge, and the Citizen Action Defense Fund, the lawsuit argues the income tax violates Article VII of the Washington Constitution in two key ways:
-
It imposes a non-uniform tax on property, taxing similar income at different rates; and exceeds the constitutional 1% limit on property taxes, with a top rate of 9.9%.
-
The lawsuit also notes Washington voters have rejected various income tax proposals 10 separate times over the past 92 years, the last time being in 2010 when Initiative 1098 was soundly defeated.
Real-world impacts: Chelan County entrepreneurs Lauren and Ben Petter — the lawsuit’s lead plaintiffs — write in The Seattle Times that “for most business owners, what is reported as “income” isn’t money sitting in a personal account. It’s capital reinvested back into the business — hiring, new projects, better systems and the ability to weather tougher seasons.”
“In stronger years, that income is what builds stability and future opportunity. Policies like this risk disproportionately impacting small and growing businesses, where that reinvestment is essential to survival and growth.”
What’s next: AWB’s Spring Summit in Vancouver will feature a special discussion on the income tax and the legal challenge. Learn more and register (and see details below).
