S-1958

AN ACT Relating to low‑cost housing for low‑income buyers; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; and adding a new section to chapter 82.45 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:

(1) There is credited against the tax imposed under this chapter twenty‑five percent of the value of materials or labor and services donated for the provision in this state of low‑cost housing to low‑income buyers. In the case of materials, the value of the donation is determined using the definition of "value" in RCW 82.12.010(1) (a) and (b). In the case of labor and services, the value of the donation is determined by the allocation of the cost method using generally accepted accounting standards. The donation must be made to a nonprofit organization that devotes a majority of its resources to the development, rehabilitation, or preservation of affordable housing. The department of community, trade, and economic development shall make available to prospective donors a list of nonprofit organizations that qualify as nonprofit organizations devoting a majority of their resources to the development, rehabilitation, or preservation of affordable housing.

(2) For the purposes of this section, the term "affordable housing" means residential housing for purchase and occupancy by a low‑income household or residential housing for rental occupancy by a low‑income household.

(3) For the purposes of this section, the term "low‑income household" means a single person, family, or unrelated persons living together whose adjusted income is less than eighty percent of the median family income, adjusted for household size, for the county where the residential housing is located.

NEW SECTION. Sec. 2. A new section is added to chapter 82.08 RCW to read as follows:

(1) The tax levied by RCW 82.08.020 does not apply to sales of tangible personal property that becomes an ingredient or component of a low‑cost housing residence for sale to a low‑income buyer, or charges made for labor and services used in the constructing of a residence of low‑cost housing for sale to a low‑income buyer, but only if the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the exemption certificate for the seller's files.

(2) If the residence is not sold to a low‑income buyer by a seller who has claimed the exemption, the amount of taxes for which an exemption has been taken is immediately due. If the department finds that a person who is not eligible for the exemption has not paid the tax, the department shall assess interest, but not penalties, on the taxes for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, assessed retroactively to the date the tax exemption was taken, and accrue until the taxes for which an exemption has been claimed are repaid.

(3) The seller must maintain records documenting that the low-cost housing has been sold to a low‑income buyer.

(4) For the purposes of this section:

(a) "Low‑cost housing" means a primary residence that has a listed sales price of no more than two‑thirds the median sales price for residential property in the county where the housing is located, adjusted annually.

(b) "Low‑income buyer" means a natural person or persons purchasing low‑cost housing with a federal adjusted gross income for their household of no more than eighty percent of the median family income, adjusted for household size, for the county where the housing is located, calculated in a manner consistent with section 8 of the United States Housing Act of 1937.

NEW SECTION. Sec. 3. A new section is added to chapter 82.12 RCW to read as follows:

(1) The provisions of this chapter do not apply in respect to the use of tangible personal property that becomes an ingredient or component of a residence constructed as low‑cost housing for sale to a low‑income buyer.

(2) If the residence is not sold to a low‑income buyer by a seller who has claimed the exemption, the amount of taxes for which an exemption has been taken shall be immediately due. If the department finds that a person who is not eligible for the exemption has not paid the tax, the department shall assess interest, but not penalties, on the taxes for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, shall be assessed retroactively to the date the tax exemption was taken, and shall accrue until the taxes for which an exemption has been claimed are repaid.

(3) The seller must maintain records documenting that the low-cost housing has been sold to a low‑income buyer.

(4) For the purposes of this section:

(b) "Low‑income buyer" means a natural person or persons purchasing low‑cost housing with federal adjusted gross income for their household of no more than eighty percent of the median family income, adjusted for household size, for the county where the housing is located, calculated in a manner consistent with section 8 of the United States Housing Act of 1937.

NEW SECTION. Sec. 4. A new section is added to chapter 82.45 RCW to read as follows:

(1) The tax imposed under this chapter does not apply to sales of low‑cost housing to low‑income buyers.

(2) For the purpose of this section:

NEW SECTION. Sec. 5. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.