State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 01/19/11. Referred to Committee on Ways & Means.
AN ACT Relating to providing the department of revenue with additional flexibility to achieve operational efficiencies through the expanded use of electronic means to remit and report taxes; amending RCW 82.32.085 and 82.32.090; reenacting and amending RCW 82.32.080; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.32.080 and 2010 c 111 s 304 and 2010 c 106 s 226
are each reenacted and amended to read as follows:
(1) When authorized by the department, payment of the tax may be
made by uncertified check under such rules as the department
prescribes, but, if a check so received is not paid by the bank on
which it is drawn, the taxpayer, by whom such check is tendered, will
remain liable for payment of the tax and for all legal penalties, the
same as if such check had not been tendered.
(2)(a) Except as otherwise provided in this subsection, payment of
the tax must be made by electronic funds transfer, as defined in RCW
82.32.085((, if the taxpayer is required to file and remit its taxes on
a monthly basis)). As an alternative to electronic funds transfer, the
department may authorize other forms of electronic payment, such as
payment by credit card ((and e-check)). All taxes administered by this
chapter are subject to this requirement, except ((the taxes authorized
by chapters 82.14A, 82.14B, 82.24, 82.29A, and 84.33 RCW. It is the
intent of this subsection to require electronic payment for those taxes
reported on the department's combined excise tax return or any
successor return. The mandatory electronic payment requirement in this
subsection also applies to taxpayers who: (i) Are subject to the tax
imposed in RCW 82.04.257 but for whom the department has authorized a
tax reporting frequency that is less frequent than monthly; or (ii)
meet the threshold for filing and remitting taxes on a monthly basis as
established by rule of the department but for whom the department has
authorized a less frequent reporting frequency, when such authorization
became effective on or after July 26, 2009)) that the department may
exclude any taxes not reported on the combined excise tax return or any
successor return from the electronic payment requirement in this
subsection.
(b) The department((, for good cause,)) may waive the electronic
payment requirement in this subsection for any taxpayer or class of
taxpayers, for good cause or for whom the department has assigned a
reporting frequency that is less than quarterly. In the discretion of
the department, a waiver under this subsection may be made temporary or
permanent, and may be made on the department's own motion.
(c) The department is authorized to accept payment of taxes by
electronic funds transfer or other acceptable forms of electronic
payment from taxpayers that are not subject to the mandatory electronic
payment requirements in this subsection.
(3)(a) Except as otherwise provided in this subsection, returns
must be filed electronically using the department's online tax filing
service((, if the taxpayer is required to file and remit its taxes on
a monthly basis. The mandatory electronic filing requirement in this
subsection also applies to taxpayers who: (i) Are subject to the tax
imposed in RCW 82.04.257 but for whom the department has authorized a
tax reporting frequency that is less frequent than monthly; or (ii)
meet the threshold for filing and remitting taxes on a monthly basis as
established by rule of the department but for whom the department has
authorized a less frequent reporting frequency, when such authorization
became effective on or after July 26, 2009)) or other method of
electronic reporting as the department may authorize.
(b) The department((, for good cause,)) may waive the electronic
filing requirement in this subsection for any taxpayer or class of
taxpayers, for good cause or for whom the department has assigned a
reporting frequency that is less than quarterly. In the discretion of
the department, a waiver under this subsection may be made temporary or
permanent, and may be made on the department's own motion.
(c) The department is authorized to allow electronic filing of
returns from taxpayers that are not subject to the mandatory electronic
filing requirements in this subsection.
(4)(a)(i) The department, for good cause shown, may extend the time
for making and filing any return, and may grant such reasonable
additional time within which to make and file returns as it may deem
proper, but any permanent extension granting the taxpayer a reporting
date without penalty more than ten days beyond the due date, and any
extension in excess of thirty days must be conditional on deposit with
the department of an amount to be determined by the department which is
approximately equal to the estimated tax liability for the reporting
period or periods for which the extension is granted. In the case of
a permanent extension or a temporary extension of more than thirty days
the deposit must be deposited within the state treasury with other tax
funds and a credit recorded to the taxpayer's account which may be
applied to taxpayer's liability upon cancellation of the permanent
extension or upon reporting of the tax liability where an extension of
more than thirty days has been granted.
(ii) The department must review the requirement for deposit at
least annually and may require a change in the amount of the deposit
required when it believes that such amount does not approximate the tax
liability for the reporting period or periods for which the extension
is granted.
(b) During a state of emergency declared under RCW 43.06.010(12),
the department, on its own motion or at the request of any taxpayer
affected by the emergency, may extend the time for making or filing any
return as the department deems proper. The department may not require
any deposit as a condition for granting an extension under this
subsection (4)(b).
(5) The department must keep full and accurate records of all funds
received and disbursed by it. Subject to the provisions of RCW
82.32.105 and 82.32.350, the department must apply the payment of the
taxpayer first against penalties and interest, and then upon the tax,
without regard to any direction of the taxpayer.
(6) The department may refuse to accept any return that is not
accompanied by a remittance of the tax shown to be due thereon or that
is not filed electronically as required in this section. When such
return is not accepted, the taxpayer is deemed to have failed or
refused to file a return and is subject to the procedures provided in
RCW 82.32.100 and to the penalties provided in RCW 82.32.090. The
above authority to refuse to accept a return may not apply when a
return is timely filed electronically and a timely payment has been
made by electronic funds transfer or other form of electronic payment
as authorized by the department.
(7) Except for returns and remittances required to be transmitted
to the department electronically under this section and except as
otherwise provided in this chapter, a return or remittance that is
transmitted to the department by United States mail is deemed filed or
received on the date shown by the post office cancellation mark stamped
upon the envelope containing it. A return or remittance that is
transmitted to the department electronically is deemed filed or
received according to procedures set forth by the department.
(8)(a) For purposes of subsections (2) and (3) of this section,
"good cause" means the inability of a taxpayer to comply with the
requirements of subsection (2) or (3) of this section because:
(i) The taxpayer does not have the equipment or software necessary
to enable the taxpayer to comply with subsection (2) or (3) of this
section;
(ii) The equipment or software necessary to enable the taxpayer to
comply with subsection (2) or (3) of this section is not functioning
properly;
(iii) The taxpayer does not have access to the internet using the
taxpayer's own equipment;
(iv) The taxpayer does not have a bank account or a credit card;
(v) The taxpayer's bank is unable to send or receive electronic
funds transfer transactions; or
(vi) Some other circumstance or condition exists that, in the
department's judgment, prevents the taxpayer from complying with the
requirements of subsection (2) or (3) of this section.
(b) "Good cause" also includes any circumstance that, in the
department's judgment, supports the efficient or effective
administration of the tax laws of this state, including providing
relief from the requirements of subsection (2) or (3) of this section
to any taxpayer that is voluntarily collecting and remitting this
state's sales or use taxes on sales to Washington customers but has no
legal requirement to be registered with the department.
Sec. 2 RCW 82.32.085 and 2009 c 176 s 3 are each amended to read
as follows:
(1) "Electronic funds transfer" means any transfer of funds, other
than a transaction originated or accomplished by conventional check,
drafts, or similar paper instrument, which is initiated through an
electronic terminal, telephonic instrument, or computer or magnetic
tape so as to order, instruct, or authorize a financial institution to
debit or credit ((an)) a checking or other deposit account.
"Electronic funds transfer" includes payments made by electronic check
(e-check).
(2)(a) ((Except as provided in (b) of this subsection, the)) An
electronic funds transfer ((is to)) using the automated clearinghouse
credit method must be completed so that the state receives collectible
funds on or before the next banking day following the due date.
(b) A remittance made using the automated clearinghouse debit
method or any other method of electronic payment authorized by the
department will be deemed to be received on the due date if the
electronic funds transfer or other electronic payment is initiated on
or before 11:59 p.m. pacific time on the due date with an effective
payment date on or before the next banking day following the due date.
(3) The department must adopt rules necessary to implement the
provisions of RCW 82.32.080 and this section. The rules must include
but are not limited to: (a) Coordinating the filing of tax returns
with payment by electronic funds transfer or other form of electronic
payment as authorized by the department; (b) form and content of
electronic funds transfer; (c) voluntary use of electronic funds
transfer with permission of the department for those taxpayers that are
not subject to the mandatory electronic payment requirement in RCW
82.32.080; (d) use of commonly accepted means of electronic funds
transfer; (e) means of crediting and recording proof of payment; and
(f) means of correcting errors in transmission.
Sec. 3 RCW 82.32.090 and 2010 1st sp.s. c 23 s 203 are each
amended to read as follows:
(1) If payment of any tax due on a return to be filed by a taxpayer
is not received by the department of revenue by the due date, there is
assessed a penalty of five percent of the amount of the tax; and if the
tax is not received on or before the last day of the month following
the due date, there is assessed a total penalty of fifteen percent of
the amount of the tax under this subsection; and if the tax is not
received on or before the last day of the second month following the
due date, there is assessed a total penalty of twenty-five percent of
the amount of the tax under this subsection. No penalty so added
((shall)) may be less than five dollars.
(2) If the department of revenue determines that any tax has been
substantially underpaid, there is assessed a penalty of five percent of
the amount of the tax determined by the department to be due. If
payment of any tax determined by the department to be due is not
received by the department by the due date specified in the notice, or
any extension thereof, there is assessed a total penalty of fifteen
percent of the amount of the tax under this subsection; and if payment
of any tax determined by the department to be due is not received on or
before the thirtieth day following the due date specified in the notice
of tax due, or any extension thereof, there is assessed a total penalty
of twenty-five percent of the amount of the tax under this subsection.
No penalty so added may be less than five dollars. As used in this
section, "substantially underpaid" means that the taxpayer has paid
less than eighty percent of the amount of tax determined by the
department to be due for all of the types of taxes included in, and for
the entire period of time covered by, the department's examination, and
the amount of underpayment is at least one thousand dollars.
(3) If a warrant is issued by the department of revenue for the
collection of taxes, increases, and penalties, there is added thereto
a penalty of ten percent of the amount of the tax, but not less than
ten dollars.
(4) If the department finds that a person has engaged in any
business or performed any act upon which a tax is imposed under this
title and that person has not obtained from the department a
registration certificate as required by RCW 82.32.030, the department
must impose a penalty of five percent of the amount of tax due from
that person for the period that the person was not registered as
required by RCW 82.32.030. The department may not impose the penalty
under this subsection (4) if a person who has engaged in business
taxable under this title without first having registered as required by
RCW 82.32.030, prior to any notification by the department of the need
to register, obtains a registration certificate from the department.
(5) If the department finds that ((all or any part of a deficiency
resulted from the disregard of)) a taxpayer has disregarded specific
written instructions as to reporting or tax liabilities, or willfully
disregarded the requirement to file returns or remit payment
electronically, as provided by RCW 82.32.080, the department must add
a penalty of ten percent of the amount of the tax that should have been
reported and/or paid electronically or the additional tax found due if
there is a deficiency because of the failure to follow the
instructions. A taxpayer disregards specific written instructions when
the department has informed the taxpayer in writing of the taxpayer's
tax obligations and the taxpayer fails to act in accordance with those
instructions unless, in the case of a deficiency, the department has
not issued final instructions because the matter is under appeal
pursuant to this chapter or departmental regulations. The department
may not assess the penalty under this section upon any taxpayer who has
made a good faith effort to comply with the specific written
instructions provided by the department to that taxpayer. A taxpayer
will be considered to have made a good faith effort to comply with
specific written instructions to file returns and/or remit taxes
electronically only if the taxpayer can show good cause, as defined in
RCW 82.32.080, for the failure to comply with such instructions. A
taxpayer will be considered to have willfully disregarded the
requirement to file returns or remit payment electronically if the
department has mailed or otherwise delivered the specific written
instructions to the taxpayer on at least two occasions. Specific
written instructions may be given as a part of a tax assessment, audit,
determination, ((or)) closing agreement, or other written
communication, provided that such specific written instructions apply
only to the taxpayer addressed or referenced on such ((documents))
communication. Any specific written instructions by the department
must be clearly identified as such and must inform the taxpayer that
failure to follow the instructions may subject the taxpayer to the
penalties imposed by this subsection. If the department determines
that it is necessary to provide specific written instructions to a
taxpayer that does not comply with the requirement to file returns or
remit payment electronically as provided in RCW 82.32.080, the specific
written instructions must provide the taxpayer with a minimum of forty-five days to come into compliance with its electronic filing and/or
payment obligations before the department may impose the penalty
authorized in this subsection.
(6) If the department finds that all or any part of a deficiency
resulted from engaging in a disregarded transaction, as described in
RCW 82.32.655(3), the department must assess a penalty of thirty-five
percent of the additional tax found to be due as a result of engaging
in a transaction disregarded by the department under RCW 82.32.655(2).
The penalty provided in this subsection may be assessed together with
any other applicable penalties provided in this section on the same tax
found to be due, except for the evasion penalty provided in subsection
(7) of this section. The department may not assess the penalty under
this subsection if, before the department discovers the taxpayer's use
of a transaction described under RCW 82.32.655(3), the taxpayer
discloses its participation in the transaction to the department.
(7) If the department finds that all or any part of the deficiency
resulted from an intent to evade the tax payable hereunder, a further
penalty of fifty percent of the additional tax found to be due must be
added.
(8) The penalties imposed under subsections (1) through (4) of this
section can each be imposed on the same tax found to be due. This
subsection does not prohibit or restrict the application of other
penalties authorized by law.
(9) The department may not impose the evasion penalty in
combination with the penalty for disregarding specific written
instructions or the penalty provided in subsection (6) of this section
on the same tax found to be due.
(10) For the purposes of this section, "return" means any document
a person is required by the state of Washington to file to satisfy or
establish a tax or fee obligation that is administered or collected by
the department, and that has a statutorily defined due date.
NEW SECTION. Sec. 4 This act applies only to tax returns and
payments originally due after the effective date of this section,
including tax returns and payments for tax liabilities incurred before
the effective date of this section and originally due after the
effective date of this section.