What you need to know about current legal challenges to Washington’s state income tax

Washington’s newly enacted income tax has already triggered legal challenges from multiple directions. While a state income tax like this seems plainly unconstitutional on its surface, the legal process from here on out is quite nuanced.

Here’s a straightforward breakdown of what’s happening, who’s involved, and what it could mean.

What are the current legal challenges, and who’s behind them?

Two major efforts are underway.

First, Let’s Go Washington filed a referendum seeking to overturn the income tax. That effort was rejected by the Secretary of State, prompting an appeal to the Washington State Supreme Court. The Court has agreed to hear the case, with a decision expected soon.

Second, Citizen Action Defense Fund has formally launched a constitutional challenge. The group is assembling a bipartisan legal team that includes former Attorney General Rob McKenna and former Washington State Supreme Court Justice Phil Talmadge. Their case focuses on whether the income tax violates the state constitution.

What’s the difference between a referendum and an initiative, as far as Washington State law is concerned?

According to a handbook from the Secretary of State, a referendum allows voters to approve or reject a law already passed by the legislature. It’s a straightforward up-or-down vote.

An initiative, on the other hand, is used to propose new laws.

There are also key procedural differences. Referendums require signatures equal to 4% of the votes cast in the last gubernatorial election, while initiatives require 8%. Referendums also give petitioners more control over the ballot language, whereas initiative language is written by the attorney general and often subject to extended legal review. This has been a point of controversy in recent initiative efforts, as the framing of the ballot language can significantly impact the outcome.

There are also two types of initiatives, and petitioners must select one at their initial filing, before collecting signatures:

1. An initiative to the legislature. Once sufficient signatures have been collected and certified by the Secretary of State, the matter goes before the state legislature. The legislature is then constitutionally required to prioritize it above all non-budgetary matters—although there’s no real enforcement mechanism to this, and legislative leaders have been happy to ignore it in recent years. However, if the initiative is voted on by lawmakers and receives a simple majority support, that’s it—it becomes law . If it is rejected or not voted on by lawmakers, it goes to a vote of the people at the next general election.
2. An initiative to the people. This is similar to the process above, except it does not go to the legislature above, and goes directly to a vote by the people once certified by the Secretary of State.

Why was Let’s Go Washington’s petition rejected by the Secretary of State?

The rejection centers on the “necessity clause” included in the income tax legislation. Supporters of the bill in the legislature declared the tax “necessary for the support of the state government and its existing public institutions,” which means the law cannot be challenged by a referendum. Remember, it’s far more effective to challenge something as a referendum than an initiative, because the signature count is lower, and the language appearing on the ballot is far less susceptible to manipulation by opponents.

The justification for the necessity clause is weak, especially since the tax is not expected to generate revenue for several years. If the funding were truly urgent, lawmakers would have raised taxes in a way that generated revenue more immediately.

The income tax’s chief architect, Sen. Jamie Pedersen (D-Seattle), has said the recently passed state budget is balanced “ONLY because of revenue from the Millionaire’s Tax,” as if it’s somehow impossible to address state spending, which has now tripled over the last decade.

An amendment (2548) to remove the necessity clause was pushed by Republicans in the 24-hour debate in the State House back in March, but it failed to pass, in a largely party-line vote.

When will we know the outcomes?

Let’s Go Washington expects a decision from the State Supreme Court on its case by the end of April.

Citizen Action Defense Fund’s lawsuit will take longer, stretching into 2027. That timeline could coincide with changes to the court itself, as there will be at least three new justices in 2027, and five seats will be on the ballot this November.

If the Washington Supreme Court rejects Let’s Go Washington’s lawsuit, what does that mean?

If the Court upholds the necessity clause, it could set a significant precedent. Lawmakers could easily include similar language to future tax increases of any sort, effectively insulating them from referendum challenges.

This would dramatically limit voter oversight and completely neuter their most powerful tool to hold lawmakers accountable—an outcome that would be fundamentally anti-democratic.

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The outcome of these cases will shape not only the future of the income tax, but also how Washington handles voter-approved checks on legislative power. With multiple legal paths unfolding at once, clarity may take time—but the decisions will carry long-term consequences for both taxpayers and policymakers.

You can follow developments on these cases and sign-up for email updates at IncomeTaxWashington.com or directly from Let’s Go Washington and Citizen Action Defense Fund.