Resolution 19-018 Opposition to Income tax CITY OF SPOKANE VALLEY
SPOKANE COUNTY,WASHINGTON
RESOLUTION NO. 19-018
A RESOLUTION OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY,
WASHINGTON, REGARDING OPPOSITION TO A LOCAL INCOME TAX ON THE
RESIDENTS AND BUSINESSES OF THE CITY,AND OTHER MATTERS RELATING
THERETO.
WHEREAS, 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, the City of Seattle recently 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, Slip
Opinion 79447-7-1 (2019). Certain language in the court's 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 City of Seattle is seeking further review from the Washington State Supreme
Court in the Kunath case, and that court has not ruled yet on that request for further appeal; 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 Spokane Valley 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, Spokane Valley sits several miles from Washington's border with the state of Idaho,
which already results in substantial loss of commerce to businesses located in north Idaho. Furthermore,
Idaho has a more favorable business regulatory climate, including lower taxes, as an enticement for
businesses to locate there to attract commerce from Washington's border communities; 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.
NOW THEREFORE, be it resolved by the City Council of the City of Spokane Valley, Spokane
County, Washington as follows:
Resolution 19-018 Page 1 oft
Section 1. The City Council hereby declares that the imposition of a local income tax on the
businesses and residents of the City of Spokane Valley is prohibited. Such a 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 Spokane Valley 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.
Adopted this 261h day of November, 2019.
City . Spokane Valley,
L.R Higgi •
AT ,ES/ T
. A Asir .i LI
pristine Bainbridge, City Clerk
Resolution 19-018 Page 2 of 2