RES 20-801 - Opposing the Imposition of a Local Income Tax in FW RESOLUTION NO. 20-801
A RESOLUTION of the City of Federal Way,Washington,opposing the
imposition of a local income tax in the City of Federal Way.
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, 10 Wn. App. 2d 205, 210 (2019). Certain language in the court's ruling has caused
discussion in some 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 sought further review from the Washington State Supreme
Court in the Kunath case, and that court declined to review the decision, leaving it in place and
leaving open the question of whether cities may have authority to impose a local income tax; 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 of our City, the
region, state, and country; and
WHEERAS, the motto of the City of Federal Way is "Centered on Opportunity;" 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 Federal Way City Council has deliberately chosen not to,
Resolution No. 20-801 Page I of 4
electing to create a regulatory and taxing climate based on opportunity for businesses to operate in;
and
WHEREAS, a lower tax burden encourages businesses and individuals to locate or reside
in the City; and
WHEREAS, the City Council knows that a strong and inviting 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
WHEREAS, in these times of economic hardship caused by the COVID-19 pandemic, the
City Council wishes to avoid imposing an additional tax burden on City residents and businesses.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
RESOLVES AS FOLLOWS:
Section 1. The City Council hereby declares that it opposes the imposition of a local income
tax on the residents and businesses of the City of Federal Way now, or in the future. Such a tax
would conflict with the high value the City places on avoiding costly tax burdens on individuals and
families and on promoting economic development by inviting businesses and employers to locate
and expand in the City. Small businesses are the backbone of our local economy and it is imperative
that the City not erect barriers to their success. In addition, many individuals and families are
struggling to make ends meet and will benefit from retaining as much of their earnings as possible.
As such,the Federal Way City Council unequivocally states that it opposes the imposition of a local
income tax, in the event a local income tax is determined legal and permissible by the Washington
Resolution No. 20-801 Page 2 of 4
State Supreme Court, the Washington State Legislature, or an inferior Washington state court.
Section 2 Severability.If any section,sentence,clause or phrase of this resolution should be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,
clause, or phrase of this resolution.
,ection 3. Corrections,. The City Clerk and the codifiers of this resolution are authorized to
make necessary corrections to this resolution including, but not limited to, the correction of
scrivener/clerical errors, references, resolution numbering, section/subsection numbers and any
references thereto.
Section 4. Rati l icatmion.Any act consistent with the authority and prior to the effective date of
this resolution is hereby ratified and affirmed.
Section 5.Effective Date.This resolution shall be effective immediately upon passage by the
Federal Way City Council.
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON this 4th day of November, 2020.
[Signatures to follow]
Resolution No. 20-801 Page 3 of 4
CITY OF FEDERAL WAY:
II I�L,.16.11 , _
MAA
YOR
ATTEST:
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S E 1�ANIE COURTNEY, C
' 1'I" CLERK
APPROVED AS TO FORM:
M
J. RYAN
CALL, CITY ATTORNEY
FILED WITH THE CITY CLERK: 10/28/2020
PASSED BY THE CITY COUNCIL: 11/04/2020
RESOLUTION NO.: 20-801
Resolution No. 20-801 Page 4 of 4