SENATE BILL REPORT

ESSB 6495

BYSenate Committee on Ways and Means (originally sponsored by Senators McDonald and Kreidler)

Revising administrative provisions on taxes.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 1, 1988

Majority Report:  That Substitute Senate Bill No. 6495 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bauer, Bluechel, Cantu, Deccio, Fleming, Gaspard, Hayner, Johnson, Lee, Moore, Newhouse, Saling, Smith, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7437)

                  February 17, 1988

AS PASSED SENATE, FEBRUARY 16, 1988

BACKGROUND:

Existing laws governing the administration of property taxes contain obsolete and outdated language.  Many deadlines for certain actions by taxpayers or by the state or counties are needlessly rigid.  Certain recent changes in other laws affecting property tax administration have not been incorporated into appropriate statutes.  Some taxpayers may be at risk of being liable for back taxes when the Department of Revenue changes its interpretation or administration of the Business and Occupation tax.

SUMMARY:

A number of provisions of law are updated or corrected.  These include:

      --Qualifying senior citizens or disabled persons can file for property tax exemptions at any time during the year.

      --Requirements for insurance coverage to protect the state's interest when senior citizens defer property taxes are strengthened.

      --Interest is accrued at 8 percent per year on the state's lien when property taxes are deferred in lieu of foreclosure.  The state will pay counties for the taxes, interest, penalties, etc. foregone when taxes are deferred for this purpose.

      --The deadline for county legislative authorities to certify levy rates for the following year is shifted from mid- October to the end of November.  If levy rates have not been certified by this date, county assessors must use the previous year's levy rates in extending tax rolls.

      --The minimum tax due to be eligible for semi-annual payment is increased from $10 to $30.

      --The rate of interest payable on tax refunds is changed from 5 percent to current market rates as provided for by the 1987 Legislature.

      --Members of county boards of equalization are required to take a department of revenue-provided training course within one year of their appointment.

The deadline for appeal of county equalization board decisions to the State Board of Tax Appeals is set at 30 days after receipt of the county board's of equalization's decision by the taxpayer or taxing unit.

The state school levy is not subject to the requirement that the previous year's levy rates be used to set tax rolls if the county legislative authority has not certified levy rates by the last day of November.  Likewise, this requirement does not apply if a county assessor has failed to certify assessed property values to the county legislative authority by 12 working days prior to the last day of November.

If the Department of Revenue changes the classification or treatment of any taxpayer under the Business and Occupation tax, any new or additional taxes may only be collected prospectively.  The department cannot collect back taxes if the taxpayer's past behavior was based on good faith compliance with earlier written instructions from the department.

Certain sections of the bill are made effective on January 1, 1989.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Fred Saeger, Washington Association of County Officials; Trevor Thompson, Department of Revenue; Bernie Ryan, King County Assessor's Office