BILL REQ. #: H-2252.2
| State of Washington | 59th Legislature | 2005 Regular Session |
READ FIRST TIME 03/07/05.
AN ACT Relating to a state real estate excise tax exemption for certain farm and agricultural land; amending RCW 82.45.100, 82.46.010, 82.46.070, and 82.46.075; adding new sections to chapter 82.45 RCW; adding a new section to chapter 82.46 RCW; creating a new section; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that agriculture is an
integral part of Washington state history and agriculture has provided
and continues to provide employment for many of Washington state
citizens. The legislature also finds that providing targeted
incentives to sellers of agricultural lands will allow new and existing
small agricultural producers to purchase productive farm land. The
legislature intends to provide such incentives through excise tax
relief on sales of agricultural lands to new or existing small
producers.
NEW SECTION. Sec. 2 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
farm and agricultural land, if the following conditions are met:
(a) The sale is to a qualified purchaser; and
(b) The farm and agricultural land is not converted to a different
purpose or use within ten years of the sale.
(2) If a person no longer meets the definition of qualified
purchaser or sells the property to an unqualified purchaser at any time
during the ten years following the date of sale, the person shall pay
the entire amount of taxes that would have been due at the time of sale
if the exemption had not been claimed under this section. Interest
shall be imposed from the date of sale to the time of payment in
accordance with RCW 82.45.100(1)(b). Penalties shall be assessed on
the person disqualified from the exemption according to the penalty
rates in RCW 82.45.100(2). The due date for the purposes of
calculating the penalty is thirty days following the date of
disqualification. A person that no longer meets the definition of
qualified purchaser because of acts or circumstances not attributable
to the person, shall not pay additional taxes, interest, or penalties.
(3)(a) For the purposes of verifying eligibility, the purchaser
must submit the following documents:
(i) The schedule F or the successor schedule required for the
filing of farm income for federal income tax purposes, for federal tax
returns of the previous five years; and
(ii) An affidavit that certifies that the person has satisfied the
requirements described in subsection (4)(b)(i) and (iii) of this
section over the course of the preceding calendar year.
(b)(i) The documents required in (a)(i) and (ii) of this subsection
must be submitted to the county treasurer at the same time the
affidavit is submitted under RCW 82.45.150.
(ii) The documents required in (a)(i) and (ii) of this subsection
must be submitted annually to the department on the date that state and
local property taxes are initially due, until the condition in
subsection (1)(b) of this section is met.
(c) The documents required under this subsection are taxpayer
information under RCW 82.32.330 and are not subject to disclosure.
(4) For the purposes of this section, the following definitions
apply:
(a) "Farm and agricultural land" has the same meaning as in RCW
84.34.020(2)(a).
(b) "Qualified purchaser" means a person who:
(i) Is a farmer as defined in RCW 82.04.213;
(ii) Has had average annual gross receipts from the sales of
agricultural products of two hundred fifty thousand dollars or less for
the five calendar years preceding the sale; and
(iii) In conjunction with his or her family, provides a majority of
the day-to-day labor for or management of the farm for at least ten
years after the sale.
NEW SECTION. Sec. 3 A new section is added to chapter 82.45 RCW
to read as follows:
The county treasurer shall act as an agent of the state for the
purposes of approving the exemption provided by section 2 of this act.
NEW SECTION. Sec. 4 A new section is added to chapter 82.45 RCW
to read as follows:
The amount of tax claimed as exempt under section 2 of this act
that would otherwise be due upon the sale of farm and agricultural land
shall be a specific lien upon such real property from the time of sale
until such time as all conditions for exemption under section 2 of this
act have been met. The lien provided by this section also applies to
any penalties and interest imposed under section 2(2) of this act. The
lien may be enforced in the manner prescribed for the foreclosure of
mortgages but only if the person claiming exemption under section 2 of
this act does not meet the definition of qualified purchaser under
section 2 of this act at any time during the ten years following the
date of sale, or the farm and agricultural land is converted to a
different purpose or use within ten years of the date of sale. The
county treasurer shall record the lien with the county auditor and
transmit the lien and the supporting federal tax documents and
affidavits to the department of revenue.
Sec. 5 RCW 82.45.100 and 1997 c 157 s 4 are each amended to read
as follows:
(1) Payment of the tax imposed under this chapter is due and
payable immediately at the time of sale, and if not paid within one
month thereafter shall bear interest from the time of sale until the
date of payment.
(a) Interest imposed before January 1, 1999, shall be computed at
the rate of one percent per month.
(b) Interest imposed after December 31, 1998, shall be computed on
a monthly basis at the rate as computed under RCW 82.32.050(2). The
rate so computed shall be adjusted on the first day of January of each
year for use in computing interest for that calendar year. The
department of revenue shall provide written notification to the county
treasurers of the variable rate on or before December 1 of the year
preceding the calendar year in which the rate applies.
(2) In addition to the interest described in subsection (1) of this
section, if the payment of any tax is not received by the county
treasurer or the department of revenue, as the case may be, within one
month of the date due, there shall be assessed a penalty of five
percent of the amount of the tax; if the tax is not received within two
months of the date due, there shall be assessed a total penalty of ten
percent of the amount of the tax; and if the tax is not received within
three months of the date due, there shall be assessed a total penalty
of twenty percent of the amount of the tax. The payment of the penalty
described in this subsection shall be collectible from the seller only,
and RCW 82.45.070 does not apply to the penalties described in this
subsection.
(3) If the tax imposed under this chapter is not received by the
due date, the transferee shall be personally liable for the tax, along
with any interest as provided in subsection (1) of this section,
unless:
(a) An instrument evidencing the sale is recorded in the official
real property records of the county in which the property conveyed is
located; or
(b) Either the transferor or transferee notifies the department of
revenue in writing of the occurrence of the sale within thirty days
following the date of the sale.
(4) If upon examination of any affidavits or from other information
obtained by the department or its agents it appears that all or a
portion of the tax is unpaid, the department shall assess against the
taxpayer the additional amount found to be due plus interest and
penalties as provided in subsections (1) and (2) of this section. The
department shall notify the taxpayer by mail of the additional amount
and the same shall become due and shall be paid within thirty days from
the date of the notice, or within such further time as the department
may provide.
(5) No assessment or refund may be made by the department more than
four years after the date of sale except upon a showing of:
(a) Fraud or misrepresentation of a material fact by the taxpayer;
(b) A failure by the taxpayer to record documentation of a sale or
otherwise report the sale to the county treasurer; ((or))
(c) A failure of the transferor or transferee to report the sale
under RCW 82.45.090(2); or
(d) Disqualification from the exemption in section 2 of this act.
(6) Penalties collected on taxes due under this chapter under
subsection (2) of this section and RCW 82.32.090 (2) through (((6)))
(7) shall be deposited in the housing trust fund as described in
chapter 43.185 RCW.
Sec. 6 RCW 82.46.010 and 1994 c 272 s 1 are each amended to read
as follows:
(1) The legislative authority of any county or city shall identify
in the adopted budget the capital projects funded in whole or in part
from the proceeds of the tax authorized in this section, and shall
indicate that such tax is intended to be in addition to other funds
that may be reasonably available for such capital projects.
(2) The legislative authority of any county or any city may impose
an excise tax on each sale of real property in the unincorporated areas
of the county for the county tax and in the corporate limits of the
city for the city tax at a rate not exceeding one-quarter of one
percent of the selling price. The revenues from this tax shall be used
by any city or county with a population of five thousand or less and
any city or county that does not plan under RCW 36.70A.040 for any
capital purpose identified in a capital improvements plan and local
capital improvements, including those listed in RCW 35.43.040.
After April 30, 1992, revenues generated from the tax imposed under
this subsection in counties over five thousand population and cities
over five thousand population that are required or choose to plan under
RCW 36.70A.040 shall be used solely for financing capital projects
specified in a capital facilities plan element of a comprehensive plan
and housing relocation assistance under RCW 59.18.440 and 59.18.450.
However, revenues (a) pledged by such counties and cities to debt
retirement prior to April 30, 1992, may continue to be used for that
purpose until the original debt for which the revenues were pledged is
retired, or (b) committed prior to April 30, 1992, by such counties or
cities to a project may continue to be used for that purpose until the
project is completed.
(3) In lieu of imposing the tax authorized in RCW 82.14.030(2), the
legislative authority of any county or any city may impose an
additional excise tax on each sale of real property in the
unincorporated areas of the county for the county tax and in the
corporate limits of the city for the city tax at a rate not exceeding
one-half of one percent of the selling price.
(4) Unless otherwise provided in this chapter, taxes imposed under
this section shall be collected from persons who are taxable by the
state under chapter 82.45 RCW upon the occurrence of any taxable event
within the unincorporated areas of the county or within the corporate
limits of the city, as the case may be.
(5) Taxes imposed under this section shall comply with all
applicable rules, regulations, laws, and court decisions regarding real
estate excise taxes as imposed by the state under chapter 82.45 RCW.
(6) As used in this section, "city" means any city or town and
"capital project" means those public works projects of a local
government for planning, acquisition, construction, reconstruction,
repair, replacement, rehabilitation, or improvement of streets; roads;
highways; sidewalks; street and road lighting systems; traffic signals;
bridges; domestic water systems; storm and sanitary sewer systems;
parks; recreational facilities; law enforcement facilities; fire
protection facilities; trails; libraries; administrative and/
Sec. 7 RCW 82.46.070 and 1990 1st ex.s. c 5 s 3 are each amended
to read as follows:
(1) Subject to subsection (2) of this section, the legislative
authority of any county may impose an additional excise tax on each
sale of real property in the county at a rate not to exceed one percent
of the selling price. The proceeds of the tax shall be used
exclusively for the acquisition and maintenance of conservation areas.
Unless otherwise provided in this chapter, the taxes imposed under
this subsection shall be imposed in the same manner and on the same
occurrences, and are subject to the same conditions, as the taxes under
chapter 82.45 RCW, except:
(a) The tax shall be the obligation of the purchaser; and
(b) The tax does not apply to the acquisition of conservation areas
by the county.
The county may enforce the obligation through an action of debt
against the purchaser or may foreclose the lien on the property in the
same manner prescribed for the foreclosure of mortgages.
The tax shall take effect thirty days after the election at which
the taxes are authorized.
(2) No tax may be imposed under subsection (1) of this section
unless approved by a majority of the voters of the county voting
thereon for a specified period and maximum rate after:
(a) The adoption of a resolution by the county legislative
authority of the county proposing this action; or
(b) The filing of a petition proposing this action with the county
auditor, which petition is signed by county voters at least equal in
number to ten percent of the total number of voters in the county who
voted at the last preceding general election.
The ballot proposition shall be submitted to the voters of the
county at the next general election occurring at least sixty days after
a petition is filed, or at any special election prior to this general
election that has been called for such purpose by the county
legislative authority.
(3) A plan for the expenditure of the excise tax proceeds shall be
prepared by the county legislative authority at least sixty days before
the election if the proposal is initiated by resolution of the county
legislative authority, or within six months after the tax has been
authorized by the voters if the proposal is initiated by petition.
Prior to the adoption of this plan, the elected officials of cities
located within the county shall be consulted and a public hearing shall
be held to obtain public input. The proceeds of this excise tax must
be expended in conformance with this plan.
(4) As used in this section, "conservation area" has the meaning
given under RCW 36.32.570.
Sec. 8 RCW 82.46.075 and 2002 c 343 s 1 are each amended to read
as follows:
(1) Subject to subsections (4) and (5) of this section, the
legislative authority of any county may impose an additional excise tax
on the purchase and sale of real property in the county at the rate of
one-half of one percent of the selling price. The proceeds of the tax
shall be used exclusively for the development of affordable housing
including acquisition, building, rehabilitation, and maintenance and
operation of housing for very low, low, and moderate-income persons and
those with special needs.
(2) Revenues generated from the tax imposed under this section
shall be placed in an affordable housing account administered by the
county. Disbursements from the account shall be made following a
competitive grant and loan process. The county legislative authority
shall determine a mechanism for receiving grant and loan applications,
and criteria by which the applications shall be approved and funded.
Eligible recipients of grants and loans from the account shall be
private nonprofit, affordable housing providers, the housing authority
for the county, or other housing programs conducted or funded by a
public agency, or by a public agency in partnership with a private
nonprofit entity.
(3) Unless otherwise provided in this chapter, the taxes imposed
under this section shall be imposed in the same manner and on the same
occurrences, and are subject to the same conditions, as the taxes under
chapter 82.45 RCW, except that the tax shall be the obligation of both
the purchaser and the seller, as determined by the county legislative
authority, with at least one-half of the obligation being that of the
purchaser. The county may enforce the obligation through an action of
debt against the purchaser or seller or may foreclose the lien on the
property in the same manner prescribed for the foreclosure of
mortgages. The imposition of the tax is effective thirty days after
the election at which the tax is authorized.
(4)(a) No tax may be imposed under this section unless approved by
a majority of the voters of the county voting, for a specified period
and for a specified maximum rate. This vote must follow either:
(i) The adoption of a resolution by the county legislative
authority proposing this action; or
(ii) The filing of a petition proposing this action with the county
auditor, signed by county voters at least equal in number to ten
percent of the total number of voters in the county who voted in the
preceding general election.
(b) The ballot proposition shall be submitted to the voters of the
county at the next general election occurring at least sixty days after
a petition is filed, or at any special election prior to this general
election called for this purpose by the county legislative authority.
(5) No tax may be imposed under this section unless the county
imposes a tax under RCW 82.46.070 at the maximum rate and the tax was
imposed by January 1, 2003.
(6) A plan for the expenditure of the proceeds of the tax imposed
by this section shall be prepared by the county legislative authority
at least sixty days before the election if the proposal is initiated by
resolution of the county legislative authority, or within six months
after the tax has been authorized by the voters if the proposal is
initiated by petition. Prior to the adoption of this plan, the elected
officials of cities located within the county shall be consulted and at
least one public hearing shall be held to obtain public comment. The
proceeds of the tax shall be expended in conformance with this plan.
NEW SECTION. Sec. 9 A new section is added to chapter 82.46 RCW
to read as follows:
The exemption in section 2 of this act is for the state real estate
excise tax in chapter 82.45 RCW and does not extend to taxes imposed
under this chapter.
NEW SECTION. Sec. 10 This act is necessary for the immediate
preservation of the public peace, health, or safety, or support of the
state government and its existing public institutions, and takes effect
July 1, 2005.