Effective Date of Rule: Thirty-one days after filing.
Purpose: Rule 110 explains the procedures property owners must follow to apply for and renew real and personal property tax exemptions and leasehold excise tax exemptions.
Rule 110 was amended to:
|•||Recognize section 305 of E2SHB 1597 (chapter 106, Laws of 2010), which adds property of hospitals established under chapter 36.62 RCW to the property tax exemption for "hospitals";|
|•||Recognize sections 301, 303, and 304 of SB 5468 (chapter 111, Laws of 2007), which:|
|o||Adds property of hospitals established under chapter 36.62 RCW to the property tax exemption for hospitals,|
|o||Allows electronic filing,|
|o||Replaces affidavits with certifying statements,|
|o||Removes application and renewal fees, and|
|o||Makes physical inspection of exempt premises discretionary with the department;|
|•||Remove obsolete language and references.|
Citation of Existing Rules Affected by this Order: Amending WAC 458-16-110 (Rule 110) Applications -- Who must file, initial applications, annual declarations, appeals, filing fees, penalties, and refunds.
Statutory Authority for Adoption: RCW 84.08.010, 84.08.070, and 84.36.865.
Adopted under notice filed as WSR 10-18-075 on August 31, 2010.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 1, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: November 12, 2010.
Alan R. Lynn
AMENDATORY SECTION(Amending WSR 02-02-009, filed 12/20/01, effective 1/20/02)
WAC 458-16-110 Applications -- Who must file, initial applications, annual declarations, appeals, filing fees, penalties, and refunds. (1) Introduction. This rule explains the procedures property owners must follow to apply for and renew all real and personal property exemptions or leasehold excise tax exemptions under chapter 84.36 RCW for which the taxpayer must apply in order to receive. It also specifies the ((
fee that must be submitted with each initial application
or renewal declaration for exemption, as well as the)) late
filing penalty that is due whenever an application or renewal
declaration is received after the filing deadline.
(2) Application required. All foreign national governments, cemeteries, nongovernmental nonprofit corporations, organizations, or associations, soil and water conservation districts, a hospital established under chapter 36.62 RCW and a public hospital district established under chapter 70.44 RCW seeking a property tax exemption or a leasehold excise tax exemption under chapter 84.36 RCW must submit an application for exemption and supporting documentation to the state department of revenue (department). Unless otherwise exempted by law, no real or personal property or leasehold interest is exempt from taxation until an application is submitted and an exemption is granted.
(3) Where to obtain application and annual renewal
declaration forms. Applications for exemption may be obtained
from any county assessor's office, the department's property
tax division, or on the internet at
http://dor.wa.gov/index.asp)) http://dor.wa.gov under
Property Tax, "Forms." Annual renewal declaration forms are
mailed by the department to all entities receiving a property
tax or leasehold excise tax exemption except for certain
cemeteries, military housing providers and tribal governments.
If such a form is not received in the mail, an annual renewal
declaration may be obtained from the department's property tax
division (( or an application form may be obtained and adapted
for use as an annual renewal declaration)).
(4) Initial application, filing deadlines, and other requirements. In general, initial applications for exemption must be filed with the department on or before March 31st to exempt the property from taxes due in the following year. However, an initial application may be filed after March 31st if the property is acquired or converted to an exempt use after that date, if the property may qualify for an exemption under chapter 84.36 RCW. In this situation, the application must be submitted within sixty days of acquisition or conversion of the property to an exempt use. If an initial application is not received within this sixty day period, the late filing penalty described in subsection (12) of this rule is imposed.
(a))) The following requirements apply to all initial
(i) A filing fee of thirty-five dollars must be
submitted with each application for exemption. The department
will not process any application unless this fee is paid;
(ii))) (a) The application must be made on a form prescribed by the department and signed by the applicant or the applicant's authorized agent;
(iii))) (b) One application can be submitted for all
real property that is contiguous and part of a homogeneous
unit. If exemption is sought for multiple parcels of real
property, which are not contiguous nor part of a homogeneous
unit, a separate application for each parcel must be
submitted. However, multiple applications are not required
for church property with a noncontiguous parsonage or convent.
(A))) (i) "Contiguous property" means real property
adjoining other real property, all of which is under the
control of a single applicant even though the properties may
be separated by public roads, railroads, rights of way, or
(B))) (ii) "Homogeneous unit" means the property is
controlled by a single applicant and the operation and use of
the property is integrated with and directly related to the
exempt activity of the applicant.
(5) Documentation a nonprofit organization must submit with its application for exemption. Unless the following information was previously submitted to the department and it is still current, in addition to the application for exemption, a nonprofit organization, corporation, or association must also submit:
(a) Copies of the articles of incorporation or association, constitution, or other establishing documents, as well as all current amendments to these documents, showing nonprofit status;
(b) A copy of the bylaws of the nonprofit entity, if requested by the department;
(c) A copy of any current letter issued by the Internal Revenue Service that exempts the applicant from federal income taxes. This letter is not usually, but may be, required if the nonprofit entity applying for an exemption is part of a larger organization, association, or corporation, like a church or the Boy Scouts of America, that was issued a group 501 (c)(3) exemption ruling by or is otherwise exempt from filing with the Internal Revenue Service; and
(d) The information required in subsection (6) of this rule.
(6) Other documentation a nonprofit entity, foreign national government, hospital established under chapter 36.62 RCW, hospital owned and operated by a public hospital district, or soil and water conservation district must submit with its initial application for exemption. In addition to the initial application for exemption, a nonprofit entity, foreign national government, and public hospital district established under chapter 70.44 RCW, or soil and water conservation district must submit the following information regarding the real or personal property for which exemption is sought, unless it was previously submitted to the department and it is still current:
(a) An accurate description of the real and personal property;
(b) An accurate map identifying by dimension the use or proposed use of all real property that shows buildings, building sites, parking areas, landscaping, vacant areas, and if requested by the department, floor plans of the buildings. The map will be used to determine whether the property is entitled to a total or partial exemption based upon the use of the total area;
(c) A legal description of all real property, listing the county tax parcel number, and if the property is owned by the applicant, a copy of the current deed; and
(d) If the property is rented or loaned to or from another property owner, a copy of the rental agreement or other document explaining the terms of the lease or loan. This documentation must describe:
(i) What property is rented or loaned;
(ii) The amount of the rent or other consideration paid or received;
(iii) The name of the party from whom and the name of the party to whom the property is rented or loaned;
(iv) How the property is being used; and
(v) The monthly amount of maintenance and operation costs related to rented or loaned property if a nonprofit entity is claiming an exemption for property leased to another party.
(7) Department's review of the application and notice of its determination. Upon receipt of an application for exemption, the department will review the application and all supporting documentation. Additional information may be requested about the ownership and use of the property, if the department needs this information to determine if the exemption should be granted. An application for exemption is not considered complete until all required and requested information is received by the department.
(a) Physical inspection. The department ((
physically inspect the property as part of the application
(b) Deadline. If a complete application is received by March 31st for that assessment year, the department will issue a determination about the application by August 1st. If a complete application is not received by March 31st, the determination will be made within thirty days of the date the complete application is received by the department or by August 1st, whichever is later.
(c) Notice to applicant. The department will mail a written determination about the exemption application to the applicant. An application may be approved or denied, in whole or in part. If the application is denied for any portion of the property covered by the application, the department must clearly explain its reason for denial in its written determination.
(d) Notice to assessor. Once the department makes its determination about the application for exemption, it will notify the assessor of the county in which the property is located about the determination made. In turn, the assessor takes appropriate action so that the department's determination is reflected on the county's assessment roll(s) for the years covered by the determination.
(8) Effective date of the exemption. If an application is approved, the property is exempt from property taxes due the year immediately following the year the application for exemption is submitted.
(a) For example, if an application for exemption is
submitted to the department in ((
2000)) 2010 and the
application is approved (( in)) for assessment year (( 2000))
2010, the property will be exempt from taxes due in (( 2001))
(b) Retroactive applications for exemption for previous
years are accepted, up to a maximum of three years from the
date taxes were ((
paid)) due on the property, if the applicant
provides the department with acceptable proof that the
property qualified for exemption during the pertinent
assessment years and pays the (( initial application filing
fee, renewal declaration fees, and)) late filing penalties.
(9) Annual renewal declaration. To retain a property tax
exemption, each nonprofit entity (except nonprofit
cemeteries), foreign national government, public hospital
district, and soil and water conservation district receiving
an exemption must annually submit a renewal declaration
certifying that the use and exempt status of the real and
personal property has not changed. The renewal declaration is
a form ((
prepared)) provided by the department.
(a) On or before January 1st each year, the department mails a renewal declaration to the entity receiving an exemption for the property at the entity's last known address. Within sixty days of changing its mailing address, the exempt entity must notify the department about the change.
(b) The renewal declaration, signed by the exempt entity
or the exempt entity's authorized agent, ((
and renewal fee of
eight dollars and seventy-five cents)) must be (( submitted))
mailed or delivered to the department or submitted
electronically using the department's on-line service no later
than March 31st each year. (( The department will not process
a renewal declaration unless this fee is paid.))
(i) The renewal declaration must include information
about any change of use of the exempt property and a
certification as to)) statement certifying the truth and
accuracy of the information listed.
(ii) The renewal declaration is due on or before March
31st even if the department fails to mail the declaration to
the exempt entity. If an exempt entity does not receive a
renewal declaration, ((
an application form may be submitted to
the)) a replacement renewal declaration form may be requested
from the department to renew the exemption or the exempt
entity may use the department's on-line system to submit the
(c) If the renewal declaration and renewal fee are not
received by March 31st, the department will mail a second
notice to the exempt entity at the entity's last known mailing
address. If the exempt entity fails to respond to the second
notice, the department will remove the exemption from the
property and notify the assessor of the county in which the
property is located that the exemption has been ((
(d) Real property, which was previously exempt from taxation, is assessed and taxed as provided in RCW 84.40.350 through 84.40.390 when it loses its exempt status.
(i) Property that no longer retains its exempt status is subject to a pro rata portion of the taxes allocable to the remaining portion of the year after the date the property lost its exempt status.
(ii) The assessor lists and assesses the property with reference to its true and fair value on the date the property lost its exempt status.
(iii) RCW 84.40.380 sets forth the dates upon which taxes are payable when property loses its exempt status. Taxes due and payable under RCW 84.40.350 through 84.40.390 constitute a lien on the property that attaches on the date the property loses its exempt status.
(10) Failure to submit an annual renewal declaration and
reapplication for exemption. If property loses its exempt
status because the annual renewal declaration ((
fee were)) was not submitted and subsequently the owner wishes
to reapply for the property tax exemption:
(a) If the owner reapplies within the same assessment
year during which the exemption is ((
cancelled)) canceled, the
owner must submit the annual renewal declaration and pay the
(( renewal fee and any)) required late filing penalties; or
(b) If the owner reapplies after the assessment year
during which the exemption is cancelled, the owner must submit
an initial application and pay the ((
initial application fee,
any unpaid renewal fees for the intervening years, and))
required late filing penalties.
(11) Initial application and renewal declaration procedures regarding cemeteries. There are several types of cemeteries. The initial application for exemption and renewal declaration procedures are specific as to the type of cemetery at issue.
(a) The assessor shall consider the following types of cemeteries exempt from property tax, no initial application or renewal declaration is required for:
(i) Cemeteries owned, controlled, operated, and maintained by a cemetery district authorized by RCW 68.52.090; or
(ii) Indian cemeteries, which are considered to be held by the tribe or held in trust for the tribe by the United States.
(b) An initial application is submitted to the department, but no renewal declaration is required, for:
(i) Family cemeteries;
(ii) Historical cemeteries;
(iii) Community cemeteries; and
(iv) Cemeteries belonging to nonprofit organizations, associations, or corporations.
(c) An initial application for exemption and a renewal declaration must be submitted by all for-profit cemeteries seeking a property tax exemption.
(12) Late filing penalty. When an initial application or renewal declaration is submitted after the due date, a late filing penalty of ten dollars is due for every month, or portion thereof. This penalty is calculated from the date the application or renewal declaration was due until the postmark date shown on the application or declaration or the date the application or declaration is given to the department.
(13) Refund of filing ((
fee or)) penalty. No (( filing
fees or)) late filing penalty (( are)) is refunded after a
determination on the application is issued by the department. However, (( filing fees and)) the late filing penalty will be
refunded under the following circumstances:
(a) When a duplicate application or renewal declaration for the same property is submitted during the same calendar year;
(b) When an application or renewal declaration is received by the department and the department has no authority to grant the exemption requested; or
(c) When a written request to withdraw the application is received before the department issues a determination. The withdrawal request must be signed by the owner or the owner's authorized agent.
(14) Appeals. Any applicant that receives a negative determination from the department on either an initial application or a renewal declaration may appeal this determination to the state board of tax appeals (BTA). Similarly, any assessor who disagrees with the department's determination may appeal the determination to the BTA. See WAC 458-16-120 for specific information about the appeal process.
[Statutory Authority: RCW 84.36.865, 84.36.040, 84.36.042, 84.36.045, 84.36.046, 84.36.050, 84.36.385, 84.36.560, 84.36.570, 84.36.800, 84.36.805, 84.36.810, 84.36.815, 84.36.820, 84.36.825, 84.36.830, 84.36.833, 84.36.840, 84.36.850, and 84.40.350 through 84.40.390. 02-02-009, § 458-16-110, filed 12/20/01, effective 1/20/02. Statutory Authority: RCW 84.36.865, 84.36.037, 84.36.805, 84.36.815, 84.36.825 and 84.36.840. 98-18-006, § 458-16-110, filed 8/20/98, effective 9/20/98. Statutory Authority: RCW 84.08.010, 84.08.070 and chapter 84.36 RCW. 94-07-008, § 458-16-110, filed 3/3/94, effective 4/3/94. Statutory Authority: RCW 84.36.865. 85-05-025 (Order PT 85-1), § 458-16-110, filed 2/15/85; 81-05-017 (Order PT 81-7), § 458-16-110, filed 2/11/81; Order PT 77-2, § 458-16-110, filed 5/23/77; Order PT 76-2, § 458-16-110, filed 4/7/76. Formerly WAC 458-12-146.]