FINAL BILL REPORT

HB 947

                                  C 260 L 87

BYRepresentatives Betrozoff, Walk, Patrick, Schmidt, D. Sommers, Baugher, Ferguson, May, Brough and Miller

Providing for the collection of unpaid motor vehicle excise taxes.

House Committe on Transportation

Senate Committee on Transportation

SYNOPSIS AS ENACTED

BACKGROUND:

The motor vehicle excise tax is imposed for the privilege of using any motor vehicle in the state except those vehicles operated under reciprocal agreement, dealers licenses or under authority of a "trip permit."  The tax rate of 2.235 percent is applied to the value of the vehicle and is payable annually at the time of registration or renewal.

Washington state residents who license their vehicles out of state avoid paying motor vehicle excise taxes.  In the event the resident re-registers in Washington, there is no statutory authority to permit the Department of Licensing to collect back taxes.

SUMMARY:

The Department of Revenue is authorized to collect unpaid motor vehicle excise taxes for any years during which a vehicle was located in Washington state but licensed elsewhere.  The department will also charge interest of 9 percent on the unpaid excise taxes.  If payment with interest is not received within 10 days of notification, a penalty of 10 percent is added to the amount of the additional tax owing.

If the Department of Revenue finds that there was intent to evade paying the tax, then a further penalty of 50 percent is added.  In most cases, the Department of Revenue cannot go beyond four years to collect unpaid taxes.

The fiscal impact is estimated to be $200,000 to the General Fund for the 1987-89 biennium.  There is a negligible impact on motor vehicle excise tax distributions to local governments.

VOTES ON FINAL PASSAGE:

      House 90   0

      Senate    49     0

EFFECTIVE:July 26, 1987