Fisher Investments announced last week that it would be relocating the firm’s headquarters from Camas, Washington, to Texas due to The Lone Star State’s tax-friendly policies and in response to Washington state’s new capital gains tax.
The company already has a corporate office in Plano, Texas, and the company’s founder and executive chairman, billionaire Ken Fisher, reportedly lives in Dallas.
In a 7-2 vote, the Washington Supreme Court agreed to uphold a 2021 decision by state lawmakers to pass a 7% excise tax on capital investments such as stocks, bonds, business interests, or other tangible assets in excess of $250,000 for both individuals and couples, the Washington State Department of Revenue said in a news statement.
The firm’s decision to relocate its headquarters to Texas was swiftly announced after the Supreme Court pro-tax ruling on March 24.
“In honor of the Washington state Supreme Court’s wisdom and knowledge of the law, and in recognition of whatever it may do next, Fisher Investments is immediately moving its headquarters from Washington state to Texas,” Fisher Investments said in a news statement on Friday.
The state’s Department of Revenue is already prepared to collect the new tax, which is due at the state’s Department of Revenue by the filing deadline of April 18, 2023.
“Now that the legal challenges have been settled, the Department of Revenue will continue to uphold its statutory obligation to collect the capital gains tax,” said Ryser. “I’d like to thank the agency staff who worked through the legal uncertainty to prepare for either outcome. Because of their hard work, the agency has been ready and able to perform its duties since the system went live in February.”
Still, those against the recent Supreme Court decision argue that the capital gains tax is illegal to implement under the state’s constitution. Critics claim that the capital gains tax is a form of property tax on income, which violates the uniformity and levy limitations on property taxes imposed by article VII, sections 1 and 2 of the Washington Constitution.
Another argument is that the tax violates the privileges and immunities clause of the Washington Constitution and the dormant commerce clause of the U.S. Constitution, which was found to be accurate, according to a March 2022 ruling from the Douglas County Superior Court in Quinn vs. State of Washington.
However, in the end, the Washington State Supreme Court ruled that the capital gains tax was consistent with other state and federal constitutional requirements and that it was a valid excise tax not subject to uniformity and levy requirements.
Other than a brief statement announcing the relocation, Fisher Investments has not made any formal statements on the matter. The Dallas Express contacted Fisher Investments about the Supreme Court ruling, but the firm’s spokesperson was not immediately available for comment.