DEPARTMENT OF REVENUE
[Filed September 26, 2018, 4:19 p.m.]
Title of Rule and Other Identifying Information: WAC 458-61A-218 Low income housing (the real estate excise tax (REET)).
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Adding to REET rules a description of the new REET exemption for low-income housing contained in EHB 2444 in 2018, codified in RCW 82.45.010
Reasons Supporting Proposal: EHB 2444 in 2018, codified in RCW 82.45.010
[(3)](s), created a new REET exemption by excluding certain sales of low-income housing from the definition of a sale for purposes of applying REET. This rule describes the circumstances under which REET does not apply to the sales of certain low-income housing as defined in statute. This rule makes the "Exemptions and Exclusions" section of the REET rules in chapter 458-61A WAC more comprehensive.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of revenue, governmental.
Name of Agency Personnel Responsible for Drafting: Rex Munger, 6400 Linderson Way S.W., Tumwater, WA, 360-534-1554; Implementation and Enforcement: Randy Simmons, 6400 Linderson Way S.W., Tumwater, WA, 360-534-1605.
This notice meets the following criteria to use the expedited adoption process for these rules:
Adopts or incorporates by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule.
Explanation of the Reason the Agency Believes the Expedited Rule-Making Process is Appropriate: The rule follows the wording of the new REET exemption contained in RCW 82.45.010
[(3)](s). It does not contain any new interpretations.
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 THIS USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Rex Munger, Department of Revenue, P.O. Box 47467, Olympia, WA 98504-7467, phone 360-534-1554, fax 360-534-1606, email RexM@dor.wa.gov, AND RECEIVED BY December 3, 2018.
September 26, 2018
Erin T. Lopez
WAC 458-61A-218Low income housing.
Transfers of qualified low-income housing developments are not subject to the real estate excise tax. Transfers of controlling interests in qualified low-income housing developments are also not subject to the real estate excise tax. The real estate excise tax does apply to such transfers if, due to noncompliance with federal statutory requirements, the seller is subject to recapture, in whole or in part, of its allocated federal low-income housing tax credits within the four years prior to the date of transfer. RCW 82.45.010
(2) Definition. For purposes of this section, "qualified low-income housing development" means real property and improvements in respect to which the seller or, in the case of a transfer of a controlling interest, the owner or beneficial owner, was allocated federal low-income housing tax credits. These are tax credits authorized under 26 U.S.C. Sec. 42, or a successor statute, and allocated by the Washington state housing finance commission.
(3) Expiration. This section does not apply to transfers of, or transfers of controlling interests in, qualified low-income housing developments occurring on or after July 1, 2035.
(4) Refund limitation
. Refunds are not authorized for any tax liability imposed or authorized under chapter 82.45
RCW, and properly paid before July 1, 2018, with respect to a transfer of qualified low-income housing as defined in RCW 82.45.010