Title of Rule: WAC 458-16A-150 Senior citizen and disabled person exemption -- Requirements for keeping the exemption.
Purpose: The rule explains how a senior citizen or disabled person may continue to keep the senior citizen and disabled person property tax exemption after it has been granted.
Statutory Authority for Adoption: RCW 84.36.383, 84.36.389, and 84.36.865.
Statute Being Implemented: RCW 84.36.381, 84.36.383, 84.36.385, 84.36.384, and 84.36.389.
Summary: This expedited rule making corrects an RCW citation in subsection (5)(a) from RCW 84.34.360 to 84.40.360.
Reasons Supporting Proposal: The correct citation will allow for a better understanding of the rule.
Name of Agency Personnel Responsible for Drafting: Ed Ratcliffe, 1025 Union Avenue S.E., Suite #400, Olympia, WA, (360) 570-6126; Implementation and Enforcement: Gary O'Neil, 1025 Union Avenue S.E., Suite #200, Olympia, WA, (360) 570-5860.
Name of Proponent: Department of Revenue, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The rule informs taxpayers, county assessors, and county treasurers about the requirements that must be met to continue to receive the property tax exemption granted by RCW 84.36.381 to senior citizens and disabled persons after the exemption has been granted. The amendment to the rule will correct an RCW citation in subsection (5)(a). This amendment will make it easier for stakeholders to understand the statutory basis for this discussion in the rule.
Proposal Changes the Following Existing Rules: This is a
revision to an existing rule, as explained above.
THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THE USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Ed Ratcliffe, Department of Revenue, P.O. Box 47467, Olympia, WA 98504-7467 , AND RECEIVED BY July 21, 2003.
May 21, 2003
Alan R. Lynn
Legislation and Policy Division
AMENDATORY SECTION(Amending WSR 03-09-002, filed 4/2/03, effective 5/3/03)
WAC 458-16A-150 Senior citizen and disabled person exemption -- Requirements for keeping the exemption. (1) Introduction. This rule explains how and when a senior citizen or disabled person must file additional reports with the county assessor to keep the senior citizen or disabled person property tax exemption. The rule also explains what happens when the claimant or the property no longer qualifies for the full exemption.
(2) Continuing the exemption. The claimant must keep the assessor up to date on the claimant's continued qualification for the senior citizen or disabled person property tax exemption. The claimant keeps the assessor up to date in three ways. First, the claimant submits a change in status form when any change affects his or her exemption. In some circumstances, the change in status form may be submitted by an executor, a surviving spouse, or a purchaser to notify the county of a change in status affecting the exemption. Second, the claimant submits a renewal application for the exemption either upon the assessor's request following an amendment of the income requirement, or every four years. Third, the claimant applies to transfer the exemption when moving to a new principal residence.
(3) Change in status. When a claimant's circumstances change in a way that affects his or her qualification for the senior citizen or disabled person property tax exemption, the claimant must submit a completed change in status form to notify the county of this change.
(a) When to submit form. The claimant must submit a change in status form to the county assessor for any change affecting that person's qualification for the exemption within thirty days of such change in status. If the claimant is unable or fails to submit a change in status form, any subsequent property owner, including a claimant's estate or surviving spouse, should submit a change in status form to avoid interest and in some cases the penalty for willfully claiming the exemption based upon erroneous information.
(b) Changes in status described. Changes in status include:
(i) Changes that affect the property (i.e., new construction, boundary line changes, rentals, ownership changes, etc.);
(ii) Changes to the property owner's annual income that increase or decrease property taxes due under the program; or
(iii) Changes that affect the property owner's eligibility for the exemption (i.e., death, moving to a replacement residence, moving to another residence the claimant does not own, moving into a hospice, a nursing home, or any other long-term care facility, marriage, improvement of a physical disability for a disabled person's claim, or a disabled person entering into gainful employment).
(c) Change in status form. The county assessor designs the change in status form or adapts a master form obtained from the department. The county must obtain approval of the final form from the department before it may be distributed. The claimant, the claimant's agent, or a subsequent owner of the residence must use a change in status form from the county where the principal residence is located. The person filing the form must provide true and accurate information on the change in status form.
(d) Obtaining the form. The claimant or subsequent property owner may obtain the form from the county assessor where his or her principal residence is located.
(e) Failure to submit the form after a change in status occurs. If the claimant fails to submit the change in status form, the application information relied upon becomes erroneous for the period following the change in status. Upon discovery of the erroneous information, the assessor determines the status of the exemption, and notifies the county treasurer to collect any unpaid property taxes and interest from the claimant, the claimant's estate, or if the property has been transferred, from the subsequent property owner. The treasurer may collect any unpaid property taxes, interest, and penalties for a period not to exceed three years as provided for under RCW 84.40.380. In addition, if a person willfully fails to submit the form or provides erroneous information, that person is liable for an additional penalty equal to one hundred percent of the unpaid taxes. RCW 84.36.385. If the change in status results in a refund of property taxes, the treasurer may refund property taxes and interest for up to the most recent three years after the taxes were paid as provided in chapter 84.69 RCW.
(f) Loss of the exemption. If the change in status disqualifies the applicant for the exemption, property taxes must be recalculated based upon the current full assessed value of the property and paid from the date the change in status occurred. RCW 84.40.360. For example, the exemption is lost when the claimant dies (unless the spouse is also qualified). The property taxes are recalculated to the full assessed amount of the principal residence on a pro rata basis beginning the day following the date of the claimant's death for the remainder of the year.
(g) Loss of exemption on part of the property. If the change in status removes a portion of the property from the exemption, property taxes in their full amount on that portion of the property that is no longer exempt must be recalculated based upon the current full assessed value of that portion of the property and paid from the date the change in status occurred. For example, a property owner subdivides his or her one-acre lot into two parcels. The parcel that does not have the principal residence built upon it no longer qualifies for the exemption. The property taxes are recalculated to the full assessed amount of that parcel on a pro rata basis for the remainder of the year beginning the day following the date the subdivision was given final approval.
(h) Exemption reduced. If the change in status reduces the exemption amount, the increased property taxes are due in the year following the change in income. For example, a claimant's income rises so that only excess levies on her principal residence are exempt. The claimant's income is based upon the assessment year. The following year when the taxes are collected, the property taxes due are calculated with only an exemption for excess levies.
(4) Renewal application. The county assessor must notify claimants when to file a renewal application with updated supporting documentation.
(a) Notice to renew. Written notice must be sent by the assessor in the year the renewal application is requested. Notice must be sent no later than December 10th, three weeks before the December 31st filing requirement.
(b) When to renew. The assessor must request a renewal application at least once every four years. The assessor may request a renewal application for any year the income requirements are amended in the statute after the exemption is granted. Once notified, the claimant must file the renewal application by December 31st of that year.
(c) Processing renewal applications. Renewal applications are processed in the same manner as the initial application.
(d) The renewal application form. The county assessor may design the renewal application form or adapt either its own application form or the application master form obtained from the department. The county must obtain approval of the final renewal application form from the department before it may be distributed. The property owner must use a renewal form from the county where the principal residence is located. The claimant must provide true and accurate information on the renewal application form.
(e) Obtaining the form. The assessor provides this form to senior citizens or disabled persons claiming the exemption when requesting renewal.
(f) Failure to submit the renewal application. If the property owner fails to submit the renewal application form, the exemption is discontinued until the claimant reapplies for the program. The assessor may postpone collection activities and continue to work with an eligible claimant to complete an application for a missed period.
(5) Transfer of the exemption. When a claimant moves to a replacement residence, the claimant must file a change in status form with the county where his or her former principal residence was located. No claimant may receive an exemption on more than the equivalent of one residence in any year.
(a) Exemption on the former residence. The exemption on
the former residence applies to the closing date on the sale
of the former residence, provided the claimant lived in the
residence for most of the portion of that year prior to the
date of closing. Property taxes in their full amount must be
recalculated based upon the current full assessed value of the
property and paid from the day following the date the sale
closed. The taxes are paid for the remaining portion of the
RCW 84.34.360.)) RCW 84.40.360.
(b) Exemption upon the replacement residence. Upon moving, the claimant must reapply for the exemption in the county where the replacement residence is located if the claimant wants to continue in the exemption program. The same application, supporting documents, and application process is used for the exemption on the replacement residence as when a claimant first applies. See WAC 458-16A-135. The exemption on the replacement residence applies on a pro rata basis in the year he or she moves, but only from the latter of the date the claimant moves into the new principal residence or the day following the date the sale closes on his or her previous residence.
[Statutory Authority: RCW 84.36.383, 84.36.389, and 84.36.865. 03-09-002, § 458-16A-150, filed 4/2/03, effective 5/3/03.]