1315AMSWMS2763.1HB 1315S COMM AMDBy Committee on Ways & MeansADOPTED 04/14/2005 Strike everything after the enacting clause and insert thefollowing:Sec. RCW 82.32.330 and 2000 c 173 s 1 and 2000 c 106 s 1 areeach reenacted and amended to read as follows: (1) For purposes of this section: (a) "Disclose" means to make known to any person in any mannerwhatever a return or tax information; (b) "Return" means a tax or information return or claim for refundrequired by, or provided for or permitted under, the laws of this statewhich is filed with the department of revenue by, on behalf of, or withrespect to a person, and any amendment or supplement thereto, includingsupporting schedules, attachments, or lists that are supplemental to,or part of, the return so filed; (c) "Tax information" means (i) a taxpayer's identity, (ii) thenature, source, or amount of the taxpayer's income, payments, receipts,deductions, exemptions, credits, assets, liabilities, net worth, taxliability deficiencies, overassessments, or tax payments, whether takenfrom the taxpayer's books and records or any other source, (iii)whether the taxpayer's return was, is being, or will be examined orsubject to other investigation or processing, (iv) a part of a writtendetermination that is not designated as a precedent and disclosedpursuant to RCW 82.32.410, or a background file document relating to awritten determination, and (v) other data received by, recorded by,prepared by, furnished to, or collected by the department of revenuewith respect to the determination of the existence, or possibleexistence, of liability, or the amount thereof, of a person under thelaws of this state for a tax, penalty, interest, fine, forfeiture, orother imposition, or offense: PROVIDED, That data, material, ordocuments that do not disclose information related to a specific oridentifiable taxpayer do not constitute tax information under this 1 section. Except as provided by RCW 82.32.410, nothing in this chaptershall require any person possessing data, material, or documents madeconfidential and privileged by this section to delete information fromsuch data, material, or documents so as to permit its disclosure; (d) "State agency" means every Washington state office, department,division, bureau, board, commission, or other state agency; (e) "Taxpayer identity" means the taxpayer's name, address,telephone number, registration number, or any combination thereof, orany other information disclosing the identity of the taxpayer; and (f) "Department" means the department of revenue or its officer,agent, employee, or representative. (2) Returns and tax information shall be confidential andprivileged, and except as authorized by this section, neither thedepartment of revenue nor any other person may disclose any return ortax information. (3) ((The foregoing, however, shall)) This section does notprohibit the department of revenue from: (a) Disclosing such return or tax information in a civil orcriminal judicial proceeding or an administrative proceeding: (i) In respect of any tax imposed under the laws of this state ifthe taxpayer or its officer or other person liable under Title 82 RCWis a party in the proceeding; or (ii) In which the taxpayer about whom such return or taxinformation is sought and another state agency are adverse parties inthe proceeding; (b) Disclosing, subject to such requirements and conditions as thedirector shall prescribe by rules adopted pursuant to chapter 34.05RCW, such return or tax information regarding a taxpayer to suchtaxpayer or to such person or persons as that taxpayer may designate ina request for, or consent to, such disclosure, or to any other person,at the taxpayer's request, to the extent necessary to comply with arequest for information or assistance made by the taxpayer to suchother person: PROVIDED, That tax information not received from thetaxpayer shall not be so disclosed if the director determines that suchdisclosure would compromise any investigation or litigation by anyfederal, state, or local government agency in connection with the civilor criminal liability of the taxpayer or another person, or that suchdisclosure would identify a confidential informant, or that such 2 disclosure is contrary to any agreement entered into by the departmentthat provides for the reciprocal exchange of information with othergovernment agencies which agreement requires confidentiality withrespect to such information unless such information is required to bedisclosed to the taxpayer by the order of any court; (c) Disclosing the name of a taxpayer with a deficiency greaterthan five thousand dollars and against whom a warrant under RCW82.32.210 has been either issued or filed and remains outstanding fora period of at least ten working days. The department shall not berequired to disclose any information under this subsection if ataxpayer: (i) Has been issued a tax assessment; (ii) has been issueda warrant that has not been filed; and (iii) has entered a deferredpayment arrangement with the department of revenue and is makingpayments upon such deficiency that will fully satisfy the indebtednesswithin twelve months; (d) Disclosing the name of a taxpayer with a deficiency greaterthan five thousand dollars and against whom a warrant under RCW82.32.210 has been filed with a court of record and remainsoutstanding; (e) Publishing statistics so classified as to prevent theidentification of particular returns or reports or items thereof; (f) Disclosing such return or tax information, for officialpurposes only, to the governor or attorney general, or to any stateagency, or to any committee or subcommittee of the legislature dealingwith matters of taxation, revenue, trade, commerce, the control ofindustry or the professions; (g) Permitting the department of revenue's records to be auditedand examined by the proper state officer, his or her agents andemployees; (h) Disclosing any such return or tax information to a peaceofficer as defined in RCW 9A.04.110 or county prosecuting attorney, forofficial purposes. The disclosure may be made only in response to asearch warrant, subpoena, or other court order, unless the disclosureis for the purpose of criminal tax enforcement. A peace officer orcounty prosecuting attorney who receives the return or tax informationmay disclose that return or tax information only for use in theinvestigation and a related court proceeding, or in the court 3 proceeding for which the return or tax information originally wassought; (i) Disclosing any such return or tax information to the properofficer of the internal revenue service of the United States, theCanadian government or provincial governments of Canada, or to theproper officer of the tax department of any state or city or town orcounty, for official purposes, but only if the statutes of the UnitedStates, Canada or its provincial governments, or of such other state orcity or town or county, as the case may be, grants substantiallysimilar privileges to the proper officers of this state; (j) Disclosing any such return or tax information to the Departmentof Justice, the Bureau of Alcohol, Tobacco and Firearms of theDepartment of the Treasury, the Department of Defense, the UnitedStates Customs Service, the Coast Guard of the United States, and theUnited States Department of Transportation, or any authorizedrepresentative thereof, for official purposes; (k) Publishing or otherwise disclosing the text of a writtendetermination designated by the director as a precedent pursuant to RCW82.32.410; (l) Disclosing, in a manner that is not associated with other taxinformation, the taxpayer name, entity type, business address, mailingaddress, revenue tax registration numbers, North American industryclassification system or standard industrial classification code of ataxpayer, and the dates of opening and closing of business. Thissubsection shall not be construed as giving authority to the departmentto give, sell, or provide access to any list of taxpayers for anycommercial purpose; (m) Disclosing such return or tax information that is alsomaintained by another Washington state or local governmental agency asa public record available for inspection and copying under theprovisions of chapter 42.17 RCW or is a document maintained by a courtof record not otherwise prohibited from disclosure; (n) Disclosing such return or tax information to the United Statesdepartment of agriculture for the limited purpose of investigating foodstamp fraud by retailers; (o) Disclosing to a financial institution, escrow company, or titlecompany, in connection with specific real property that is the subject 4 of a real estate transaction, current amounts due the department for afiled tax warrant, judgment, or lien against the real property; ((or)) (p) Disclosing to a person against whom the department has assertedliability as a successor under RCW 82.32.140 return or tax informationpertaining to the specific business of the taxpayer to which the personhas succeeded; or (q) Disclosing such return or tax information in the possession ofthe department relating to the administration or enforcement of thereal estate excise tax imposed under chapter 82.45 RCW, includinginformation regarding transactions exempt or otherwise not subject totax. (4)(a) The department may disclose return or taxpayer informationto a person under investigation or during any court or administrativeproceeding against a person under investigation as provided in thissubsection (4). The disclosure must be in connection with thedepartment's official duties relating to an audit, collection activity,or a civil or criminal investigation. The disclosure may occur onlywhen the person under investigation and the person in possession ofdata, materials, or documents are parties to the return or taxinformation to be disclosed. The department may disclose return or taxinformation such as invoices, contracts, bills, statements, resale orexemption certificates, or checks. However, the department may notdisclose general ledgers, sales or cash receipt journals, checkregisters, accounts receivable/payable ledgers, general journals,financial statements, expert's workpapers, income tax returns, statetax returns, tax return workpapers, or other similar data, materials,or documents. (b) Before disclosure of any tax return or tax information underthis subsection (4), the department shall, through writtencorrespondence, inform the person in possession of the data, materials,or documents to be disclosed. The correspondence shall clearlyidentify the data, materials, or documents to be disclosed. Thedepartment may not disclose any tax return or tax information underthis subsection (4) until the time period allowed in (c) of thissubsection has expired or until the court has ruled on any challengebrought under (c) of this subsection. (c) The person in possession of the data, materials, or documentsto be disclosed by the department has twenty days from the receipt of 5 the written request required under (b) of this subsection to petitionthe superior court of the county in which the petitioner resides forinjunctive relief. The court shall limit or deny the request of thedepartment if the court determines that: (i) The data, materials, or documents sought for disclosure arecumulative or duplicative, or are obtainable from some other sourcethat is more convenient, less burdensome, or less expensive; (ii) The production of the data, materials, or documents soughtwould be unduly burdensome or expensive, taking into account the needsof the department, the amount in controversy, limitations on thepetitioner's resources, and the importance of the issues at stake; or (iii) The data, materials, or documents sought for disclosurecontain trade secret information that, if disclosed, could harm thepetitioner. (d) The department shall reimburse reasonable expenses for theproduction of data, materials, or documents incurred by the person inpossession of the data, materials, or documents to be disclosed. (e) Requesting information under (b) of this subsection that mayindicate that a taxpayer is under investigation does not constitute adisclosure of tax return or tax information under this section. (5) Any person acquiring knowledge of any return or tax informationin the course of his or her employment with the department of revenueand any person acquiring knowledge of any return or tax information asprovided under subsection (3)(f), (g), (h), (i), (j), or (n) of thissection, who discloses any such return or tax information to anotherperson not entitled to knowledge of such return or tax informationunder the provisions of this section, is guilty of a misdemeanor. Ifthe person guilty of such violation is an officer or employee of thestate, such person shall forfeit such office or employment and shall beincapable of holding any public office or employment in this state fora period of two years thereafter.NEW SECTION.Sec. A new section is added to chapter 43.07 RCWto read as follows: (1) The secretary of state shall adopt rules requiring any entitythat is required to file an annual report with the secretary of state,including entities under Titles 23, 23B, 24, and 25 RCW, to disclose 6 any transfer in the controlling interest of the entity and any interestin real property. (2) This information shall be made available to the department ofrevenue upon request for the purposes of tracking the transfer of thecontrolling interest in real property and to determine when the realestate excise tax is applicable in such cases. (3) For the purposes of this section, "controlling interest" hasthe same meaning as provided in RCW 82.45.033.NEW SECTION.Sec. A new section is added to chapter 82.45 RCWto read as follows: An organization that fails to report a transfer of the controllinginterest in the organization under section 2 of this act to thesecretary of state and is later determined to be subject to real estateexcise taxes due to the transfer, shall be subject to the provisions ofRCW 82.45.100 as well as the evasion penalty in RCW 82.32.090(6).HB 1315S COMM AMDBy Committee on Ways & MeansADOPTED 04/14/2005 On page 1, line 2 of the title, after taxes; strike the remainderof the title and insert reenacting and amending RCW 82.32.330; addinga new section to chapter 43.07 RCW; and adding a new section to chapter82.45 RCW.--- END --- 7