Brief Description: Increasing the personal property exemption for the head of a family.

Sponsors: Representatives Kilmer, Kristiansen, Linville, Bailey, Pettigrew, P. Sullivan, Dunn, Ericks, Appleton, Green, Morrell, Sells and Simpson.

Hearing Date: 1/30/06

Staff: Bob Longman (786-7139).

Background:

All property in this state is subject to the property tax each year based on the property's value, unless a specific exemption is provided by law. Property taxes apply to both real property (real estate) and personal property (all other property that is not real estate). Household goods and business inventories are exempt from tax by statute. Thus, taxable personal property consists mainly of office and business equipment.

The state Constitution authorizes the Legislature to exempt personal property to the amount of
three thousand for each head of a family. This exemption was increased from three hundred dollars by a constitutional amendment approved by the voters in 1988. The Legislature has enacted this exemption in statute. Under rules of the Department of Revenue, a head of a family means an individual, not an entity such as a corporation, limited liability company, or a partnership. The following persons are eligible as a head of a family under the rules: Any person receiving an old age pension under the laws of this state; any citizen of the United States, over the age of sixty-five years, who has resided in the state of Washington continuously for ten years; a husband or wife, when the claimant is a married person, or a surviving spouse not remarried; and any person who resides with, and provides care and maintenance for other family members as defined in the rule.

Summary of Bill:

The personal property tax exemption for a head of family is increased to ten thousand dollars.

This bill implements the constitutional amendment in HJR 4223.

Appropriation: None.

Fiscal Note: Requested on January 23, 2006.

Effective Date: The bill takes effect on January 1, 2007, if HJR 4223 is approved by the voters at the next general election.