SENATE BILL REPORT

HB 947

BYRepresentatives Betrozoff, Walk, Patrick, Schmidt, D. Sommers, Baugher, Ferguson, May, Brough and Miller

Providing for the collection of unpaid motor vehicle excise taxes.

House Committe on Transportation

Senate Committee on Transportation

Senate Hearing Date(s):March 30, 1987

Majority Report:     Do pass.

     Signed by Senators Peterson, Chairman; Bailey, Barr, Conner, DeJarnatt, Garrett, Halsan, Nelson, Patterson, Sellar, Smitherman.

Senate Staff:Robin Rettew (786-7306)

                March 31, 1987

AS REPORTED BY COMMITTEE ON TRANSPORTATION, MARCH 30, 1987

BACKGROUND:

The motor vehicle excise tax is imposed for the privilege of using any motor vehicle in the state except those vehicles operated under reciprocal agreement, dealers licenses, or under authority of a "trip permit".  The tax rate of 2.235 percent is applied to the value of the vehicle and is payable at the time of registration.

Washington State residents who license their vehicles out of state avoid paying motor vehicle excise taxes.  In the event the resident re-registers in Washington, there is no statutory authority to permit the Department of Licensing to collect back taxes.

SUMMARY:

Statutory authority is provided to the Department of Revenue to collect, for the Department of Licensing, uncollected motor vehicle excise taxes for those years during which the vehicle was located in Washington state.  The Department of Revenue will also charge interest of 9 percent on the unpaid excise taxes.  If payment with interest is not received within ten days of notification, a penalty of 10 percent is added to the amount of the additional tax owing.  Further, if the Department of Revenue finds that there was intent to evade paying the tax, then a further penalty of 50 percent is added to the additional owing tax.  In most cases, the Department of Revenue cannot go beyond four years to collect unpaid taxes.

The fiscal impact is about $200,000 to the General Fund for the 1987-89 biennium.  There is a negligible impact on motor vehicle excise tax distributions to locals.

Revenue:   The bill has a revenue impact.

Fiscal Note:    available

Senate Committee - Testified:   Anders Tronsen, PFFT