Kennewick City Council Says NO on Local Income Tax…for Now
The Kennewick City Council voted on a resolution to not impose a local income tax.
Local taxes are in addition to federal and state income taxes. Local income taxes generally apply to people who live or work in the city and can be assessed to fund projects and add needed revenue to a city's budget.
We currently don't have an income tax in the State of Washington, we just pay Federal Income Tax but it's not out of the realm of possibility that we as Washingtonians might have to pay such a tax in the future.
Seattle passed a resolution for such a tax back in 2017 but it's being challenged in the Supreme Court right now. The courts did rule that you can't selectively issue a tax on a certain group of people like the wealthy but it did say that cities have the right to collect an income tax on property.
That ruling has lead Kennewick City Council to vote on a resolution against implementing a local income tax.
Here is the complete resolution as presented at the September 7th City Council Meeting:
CITY OF KENNEWICK
RESOLUTION NO. 21-10
A RESOLUTION OF THE CITY OF KENNEWICK, WASHINGTON, REGARDING
OPPOSITION TO A LOCAL INCOME TAX ON THE RESIDENTS AND
BUSINESSES OF THE CITY, AND OTHER MATTERS RELATING THERETO
Article VII, § 1 of the Washington State Constitution establishes the basic
framework for taxation in the state of Washington, including what shall be permitted as a tax; and WHEREAS, after the City of Seattle, attempted to enact an income tax on certain individuals applicable within its municipal boundaries, the Washington State Court of Appeals, Division I ruled that such a tax, when selectively applied, was unconstitutional and invalid. Kunath v. City of Seattle, 10 Wash.App. 2d 205 (Div. I 2019); and WHEREAS, certain language in the Kunath ruling has caused discussion in various communities across Washington as to whether cities have authority to impose a local income tax, which is legally considered a tax on property; and
WHEREAS, the Washington State Supreme Court denied the request for appeal of the Kunath case such that the ruling stands at this time; and WHEREAS, the City Council wants to declare its position regarding the potential for cities to impose a local income tax on its residents and businesses; and WHEREAS, businesses large and small provide the economic lifeblood in our City, the region, state, and country; and WHEREAS, businesses are already subject to a highly regressive business and occupation tax imposed by the state of Washington. Although many cities across the state additionally impose a local business and occupation tax, the Kennewick City Council has deliberately chosen not to, electing to create a regulatory and taxing climate based on opportunity for businesses to operate in; and WHEREAS, the City Council knows that a strong and encouraging business climate is one of the best ways to attract and retain good businesses to employ people in family-wage jobs; and
WHEREAS, use of a local income tax may generate additional revenue in the short term, but would most likely result in less long-term revenue due to the dampening effect it would have on our businesses; and NOW
THEREFORE, THE CITY COUNCIL OF THE CITY OF KENNEWICK,
WASHINGTON, HEREBY DECLARES RESOLVES as follows:
Section 1. The City Council hereby declares that a local income tax would be in direct conflict with the high value the City places on promoting economic development through the attraction and expansion of financially healthy, family-wage paying employers. Small businesses are the backbone of our local, regional, state, and national economy and it is imperative that the City not put unnecessary hurdles in the way of their success. As such, the Kennewick City Council prohibits the imposition of a local income tax in the event a local income tax is determined legal and permissible by the Washington State Supreme Court or the Washington State Legislature.
Section 2. Effective date. This Resolution shall be effective upon adoption.
Several other Washington Cities have joined with Kennewick in the resolution to not impose a local income tax.
It's legal but the City of Kennewick is against the local income tax for the time being.