WA: State Death Tax Illegal!

Note the news coverage immediately focuses on the hit to the state budget instead of on the fact that an illegal state death tax has been wrongly collected:


(KOMO Wire Services)

OLYMPIA - The state Supreme Court threw out Washington's estate tax Thursday, causing a potential loss of $430 million over the next two years at a time when lawmakers already are facing a $1.8 billion spending gap.

The unanimous decision by the nine-member court concluded that "when an estate has no federal estate tax, there is no obligation to pay any state estate tax." It ordered a refund of estate taxes collected by the Department of Revenue since Jan. 1, 2002.

The refund could be as high as $150 million, said Mike Gowrylow, a spokesman for the state agency. He said the $430 million includes that refund, and the state's reliance on $277 million that was expected to be collected from 2005 to 2007.

"There is no question in my mind that we have made a difficult budget much, much more difficult," Gov. Christine Gregoire said at a Thursday news conference about her economic development plans.