Washington Millionaires Tax faces legal challenge from CADF

Washington State’s newly enacted “millionaires tax” is facing a fresh court challenge after the Citizen Action Defense Fund (CADF) filed a lawsuit on Thursday, April 9, 2026. The case targets the constitutionality of the measure, which sets a 9.9% rate on income above $1 million while excluding earnings below that threshold.

The legal effort is being led by two prominent former state officials : former Washington Attorney General Rob McKenna and former state Supreme Court Justice Phil Talmadge. Their filing argues the tax conflicts with Washington’s constitution, pointing to long-standing court interpretations that treat income as property under state law.

At the center of the lawsuit is how Washington courts have historically classified income and what that means for taxation. The plaintiffs say Washington precedent has consistently held that income is property, which would require any property tax to be uniform and subject to constitutional limits. They contend the new law departs from that framework and does not align with the constitution’s text as they interpret it.

The measure was signed into law by Governor Bob Ferguson on March 30, 2026 . The law is scheduled to take effect in 2028, and supporters expect it to raise more than $3 billion per year once implemented.

Backers of the tax describe it as narrowly targeted and tied to specific spending goals . Supporters say it is intended to apply to less than 1% of households and that the revenue would be directed toward education, healthcare initiatives, and tax relief.

Opponents argue the policy could reshape Washington’s tax landscape beyond the stated scope . CADF and other critics say the law could set a precedent that opens the door to a broader income tax in the state, framing the dispute as not only about the current rate and threshold but also about what the legal structure could permit later.

The court fight is unfolding alongside a separate political push to undo the law . Organizers are also pursuing repeal efforts that could result in a voter referendum as early as the current year, creating parallel tracks of uncertainty over whether the tax will survive through its planned 2028 start date.