Lakehaven Water and Sewer District offices in Federal Way. File photo

Lakehaven Water and Sewer District offices in Federal Way. File photo

Federal Way wins court case for water and sewer tax

Tax is expected to generate about $1 million in revenue each year.

The City of Federal Way now has the authority to tax water and sewer utilities, the city announced June 18.

In March 2018, the Federal Way City Council passed an ordinance to impose a 7.75-percent tax on water and sewer utilities not already paying excise taxes to the city.

Lakehaven Water and Sewer District, along with co-plaintiffs Highline Water District and Midway Sewer District, challenged the legality of the ordinance on two fronts, alleging the ordinance is not authorized by state law and that it is unconstitutional.

The State Supreme Court affirmed the Superior Court’s ruling and granted summary judgment to the city.

“The Legislature properly delegated the city authority to impose the excise tax on the districts, and the governmental immunity doctrine does not shield the districts from the excise because they perform a proprietary function in providing water-sewer services to ratepayers,” the decision stated. “The districts lack standing to bring their constitutional claims challenging the tax.”

Federal Way Mayor Jim Ferrell said: “I’m extremely gratified that our state’s highest court agreed with the city’s position. We are pleased this matter has been resolved. During these difficult financial times, this additional revenue will help provide vital services for the people of this community.”

Moving forward, the tax is expected to generate about $1 million in revenue for the city each year. The city is expected to receive an additional $1.8 million in revenue that was being held in an escrow account while the case was being decided over the last year and a half.

Talk to us

Please share your story tips by emailing

To share your opinion for publication, submit a letter through our website Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in News

Federal Way Mirror virtual candidate forum set for Oct. 14

Live forum with candidates in the running for District 30 State Representative seats at 6 p.m. Wednesday, Oct. 14.

Emergency grant brings relief to Bonney Lake wildfire evacuees

The Mirror’s Hometown Hero for September is Federal Way Lions Club member Jan Barber

Washington State Capitol Building in Olympia. File photo
Surge in consumer spending eases state budget challenges

A jump in tax collections cuts a projected $9 billion shortfall in half, acccording to new forecast.

Free community mental health day in Federal Way

Free mental health services, COVID-19 testing from 2-7 p.m. Saturday, Sept. 26 at the PAEC

Two puppies stolen from Federal Way home | Police blotter

Following is a sample from the Federal Way police log Sept. 15-22.

Federal Way shows support for South King firefighters

A drive-thru donation event on Sept. 12 collected about $500 for the South King Firefighters Foundation

Screenshot from
Fred Hutch seeks volunteers of color for COVID-19 study

Research company recently released a Spanish-language version of the website for accessibility, inclusivity.

High speed rail and hub cities explored in Cascadia Corridor study

A new paper outlines a potential plan for the region.

Olivia Sullivan/staff photo
Federal Way flags at half-staff in memory of Justice Ruth Bader Ginsburg

Justice Ginsburg died at age 87 on Friday, Sept. 18.

Most Read