Washington—Sales and Use Tax: Initiative 1366 Was Unconstitutional

Initiative 1366 (I-1366), which required a reduction in the Washington sales tax rate if the legislature did not propose a constitutional amendment mandating two-thirds legislative approval or voter approval to raise taxes, violated the single-subject rule of article II, section 19 of the Washington State Constitution and was void in its entirety. The main issue involved whether the subjects are so unrelated that “it is impossible for the court to assess whether either subject would have received majority support if voted on separately.” The court held that a reduction in the sales tax rate was unrelated to both a constitutional amendment and to the way that future taxes and fees are approved. The fact that only one of the initiative’s provisions would go into effect did not save it from violating article II, section 19, as it was impossible to evaluate how many people voted for one provision as opposed to the other.

Though the state argued that I-1366 constituted valid, contingent legislation, the sales tax reduction was not contingent on an operative set of facts outside the legislation. The constitutional amendment was not an event that triggered the rate reduction but served as an escape hatch.

I-1366 also violated article XXIII, as it altered the process for amending the state constitution. A constitutional amendment cannot be proposed or enacted via initiative.

Lee v. State of Washington, Washington Supreme Court, No. 92708-1, May 26, 2016, ¶204-054

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Wolters Kluwer TAA

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