FINAL BILL REPORT
SHB 1202
C 185 L 01
Synopsis as Enacted
Brief Description: Improving property tax administration.
Sponsors: By House Committee on Finance (originally sponsored by Representatives Cairnes and Morris; by request of Department of Revenue).
House Committee on Finance
Senate Committee on Ways & Means
Background:
All real and personal property in the state is subject to property tax each year based on its value unless a specific exemption is provided by law. Real property is listed on the tax rolls by the county assessor=s office. Owners of taxable personal property provide a list of the property, either in person or by mail, to the county assessor=s office or to the Department of Revenue in the case of ships and vessels.
The county assessor determines assessed value for each property. The county assessor also calculates the tax rate necessary to raise the correct amount of property taxes for each taxing district. The assessor calculates the rate so that the individual district rate limit, the district revenue limit, and the aggregate rate limits are all satisfied. The assessor delivers the county tax roll to the treasurer. The county treasurer collects property tax based on the tax roll starting February 15 each year. The county treasurer makes monthly distributions of the property taxes to the taxing districts.
Property owners may appeal the value determined by the assessor to the county board of equalization. The appeal petition must be filed before July 1 or within 30 days of the mailing of an assessment notice. The county board of equalization may waive the filing deadline for good cause.
There are a number of property tax programs where the county assessor either determines property value or eligibility. These programs include new and rehabilitated multi-unit housing, historic property, designated and classified forest land, open space land, senior citizen property tax relief, conservation property, nonprofit organizations, and senior citizen property tax deferral.
The state imposes an annual property tax. The state property tax is allocated across the state according to the market value of each county. The Department of Revenue estimates the market value of each county by determining the ratio of assessed value to market value.
The properties of inter‑county and inter‑state utility companies are valued by the Department of Revenue rather than the county assessor. This process is called central assessment. These market values are adjusted by the ratio of assessed value to market value so that centrally assessed properties are treated in an equivalent manner to locally assessed properties.
Generally, the ratio of assessed value to market value for real property is determined by comparing sales prices with assessed values. For personal property, a county's ratio of assessed value to market value is determined from Department of Revenue audits of personal property accounts maintained by the county assessor. The ratio of assessed value to market value varies from county to county, but on average is about 90 percent of market value.
Referendum 47, approved by the voters in November 1997, placed a limitation on adding to the tax rolls large valuation increases in real property, beginning with taxes payable in 1999. On July 30, 1998, the Washington Supreme Court in Belas v. Kiga, 135 Wn.2d 913 (1998), held that the value‑averaging provisions of Referendum 47 violated the constitutional requirement that taxes on real property be uniform.
Summary:
Lists of taxable personal property may be reported by electronic transmittal.
The time limits and good cause exceptions for appeals of assessor decisions to the county board of equalization in programs involving new and rehabilitated multi‑unit housing, historic property, designated and classified forest land, open space land, senior citizen property tax relief, conservation property, nonprofit organizations, and senior citizen property tax deferral are made consistent.
Assessors are required to correct errors that resulted in all taxpayers within a district paying an incorrect amount of property tax. The correction is made in the property tax for the taxing district in the succeeding year. For large adjustments, the governing body of the district may choose to phase in the adjustment over three years. Corrections are limited to taxes no more than three years old.
Treasurers are required to correct errors in the distribution of property tax receipts to taxing districts. Adjustments are made in the following year. If the adjustment is large it may be taken over a three‑year period. Corrections are limited to distributions made within the prior three years.
The amount of data used to determine the ratio of assessed value to market value for personal property is increased from one to three years.
Some of the value‑averaging provisions of Referendum 47 that were invalidated by the court are removed from the statutes.
The changes related to correcting errors in property taxes and errors in distributions of property taxes apply to errors that occur after January 1, 2002. The other changes start with 2002 property taxes.
Votes on Final Passage:
House980
Senate470(Senate amended)
House850(House concurred)
Effective: July 22, 2001
January 1, 2002 (Section 14)