Washington’s New 9.9% ‘Millionaires’ Tax Faces Lawsuit From Trucking Owner Who Says It Will Hurt Small Businesses

Washington state's recently enacted tax on very high earners is already the subject of a legal challenge as small-business owners and watchdog groups say the measure may violate the state constitution and unintentionally burden pass-through businesses.

The law, passed by the Legislature on March 11 and signed by Gov. Bob Ferguson on March 30, imposes a 9.9% tax on individual and household income above $1,000,000. Proponents framed it as a levy on “millionaires,” but opponents warn the measure could reach small-business owners whose profits are taxed as personal income.

Trucking Owner Joins the Challenge

Curt Nuccitelli, owner of Spirit Transport Systems, a trucking firm with 14 employees, is one of the plaintiffs in the lawsuit. Nuccitelli told Fox News Digital that because his company’s profits flow through to his personal return, the new 9.9% rate could directly affect his ability to invest in staff and equipment.

“Washington state is already very unfriendly to small businesses, as far as taxes go,” Nuccitelli said. “If I give them a dollar-an-hour raise, that's over $2,000 by the end of the year, so it really limits my ability to continue to grow my company and pay my team a livable wage.”

Legal Arguments and Plaintiffs

The challenge was filed with assistance from the Citizen Action Defense Fund (CADF), a watchdog group that brings legal challenges to state and local government actions. Former Washington Attorney General Rob McKenna and former state Sen. Phil Talmadge are working with CADF on the case.

Plaintiffs rely in part on a 1933 Washington Supreme Court decision that treated income as a form of property. Their lawyers contend the Washington Constitution requires any income tax to be uniform across the state and—by precedent—capped at 1%, conditions they say the new law violates.

Jackson Maynard, an attorney on the CADF team, told reporters that the plaintiffs have a “strong argument” based on that precedent and added that the law could undermine a historically important competitive advantage for the state’s economy.

State Response and What’s Next

The Washington Attorney General’s Office said it will defend the law in court. Deputy communications director Mike Faulk told Fox News Digital, “We will be defending the constitutionality of this law in court and expect to prevail. We’ll preserve our legal arguments for the anticipated filings.”

As the case moves toward litigation, both sides are preparing briefs and legal strategy. Beyond the constitutional question, the dispute raises broader policy arguments about whether the tax will affect small businesses, pass-through entities, and Washington’s appeal to employers and innovators.

What to watch next: Court filings and early pleadings will clarify the specific constitutional claims and how broadly the plaintiffs seek relief. The outcome could determine whether the 9.9% tax takes effect as written or is blocked or altered by the courts.