BILL REQ. #:  Z-0850.7 

Read first time 01/19/2004.   Referred to Committee on Ways & Means.

     AN ACT Relating to the assessment, collection, and administration of the taxes imposed under chapter 83.100 RCW; amending RCW 83.100.130, 83.100.090, 83.100.210, 83.100.040, 83.100.150, 82.03.130, 82.03.180, 82.03.190, 83.100.020, 83.100.110, 82.32.070, 82.32.105, and 82.32.265; reenacting and amending RCW 82.32.330; adding new sections to chapter 83.100 RCW; creating new sections; and repealing RCW 83.100.045, 83.100.030, 83.100.160, 83.100.170, 83.100.180, and 83.100.190.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that significant changes have been made in federal estate tax laws. The legislature finds these changes have complicated the administration of Washington transfer taxes. This act is intended to allow the department of revenue to more equitably and efficiently administer the transfer taxes imposed under chapter 83.100 RCW.

NEW SECTION.  Sec. 101   A new section is added to chapter 83.100 RCW to read as follows:
     (1) The following provisions of chapter 82.32 RCW have full force and application with respect to the taxes imposed under this chapter unless the context clearly requires otherwise: RCW 82.32.070(1), 82.32.090 (3) and (6), 82.32.100 (1) and (2), 82.32.105, 82.32.110, 82.32.120, 82.32.130, 82.32.160, 82.32.170, 82.32.180, 82.32.190, 82.32.200, 82.32.210, 82.32.220, 82.32.230, 82.32.235, 82.32.237, 82.32.245, 82.32.265, 82.32.280, 82.32.310, 82.32.320, 82.32.330, 82.32.340, 82.32.380, and 82.32.410.
     (2) The periods of limitation contained in RCW 83.100.090, 83.100.130, and section 102 of this act apply in place of any periods of limitation described in provisions of chapter 82.32 RCW applicable to this chapter.
     (3) Unless the context clearly requires otherwise, the definitions in RCW 83.100.020 have full force and application with respect to provisions of chapter 82.32 RCW applicable to this chapter.

NEW SECTION.  Sec. 102   A new section is added to chapter 83.100 RCW to read as follows:
     (1) If upon examination of any returns or from other information obtained by the department it appears that a tax or penalty has been paid less than that properly due, the department shall assess against the taxpayer such additional amount found to be due and shall add interest as provided in RCW 83.100.070. The department shall notify the taxpayer by mail of the additional amount and the additional amount shall become due and shall be paid within thirty days from the date of the notice, or within such further time as the department may provide.
     (2) No assessment or correction of an assessment for additional taxes, penalties, or interest due may be made by the department more than four years after the close of the calendar year in which a return is due, except upon a showing of fraud or of misrepresentation of a material fact by the taxpayer or as provided under subsection (3) or (4) of this section.
     (3) For persons liable for tax under RCW 83.100.120, the period for assessment or correction of an assessment shall extend an additional three years beyond the period described in subsection (2) of this section.
     (4) Upon a request by the department, a taxpayer may extend the periods of limitation under subsection (2) or (3) of this section by executing a written waiver of the periods of limitation. The execution of the waiver shall also extend the period for making a refund as provided in RCW 83.100.130.

Sec. 103   RCW 83.100.130 and 1997 c 157 s 6 are each amended to read as follows:
     (1) ((Whenever)) If, upon receipt of an application by a taxpayer for a refund or upon an examination of the returns or records of any person, the department determines that a ((person required to file the federal return)) taxpayer has, within the periods for assessment under section 102 of this act, overpaid the tax, penalties, or interest due under this chapter, the department shall refund the amount of the overpayment, together with interest at the then existing rate under RCW 83.100.070(1). If the application for refund, with supporting documents, is filed within four months after an adjustment or final determination of federal tax liability, the department shall pay interest until the date the refund is mailed. If the application for refund, with supporting documents, is filed after four months after the adjustment or final determination, the department shall pay interest only until the end of the four-month period.
     (2) Interest refunded under this section for periods after January 1, 1997, through December 31, 1998, shall be computed on a daily basis at the rate as computed under RCW 82.32.050(2) less one percentage point. Interest allowed after December 31, 1998, shall be computed at the rate as computed under RCW 82.32.050(2). Interest shall be refunded from the date of overpayment until the date the refund is mailed. The rate so computed shall be adjusted on the first day of January of each year.
     (3) Except as otherwise provided in subsection (4) of this section and RCW 83.100.090, no refund shall be made for taxes, penalties, or interest paid more than four years prior to the beginning of the calendar year in which the refund application is made or an examination of records is complete.
     (4) The execution of a written waiver under section 102 of this act shall extend the time for making a refund if, prior to the expiration of the waiver period, an application for refund is made by the taxpayer or the department discovers a refund is due.
     (5) An application for refund shall be on a form prescribed by the department and shall contain any information and supporting documents as the department prescribes.

Sec. 104   RCW 83.100.090 and 1988 c 64 s 10 are each amended to read as follows:
     Notwithstanding the expiration of the periods of limitation in section 102 of this act and RCW 83.100.130:
     (1) If ((the person required to file the federal return)) a taxpayer files an amended federal return, that person shall ((immediately)) file with the department an amended Washington return with a copy of the amended federal return within one hundred twenty days of filing the amended federal return. If the amended Washington return requires payment of an additional tax under this chapter, the tax shall be paid in accordance with RCW 83.100.060 and interest shall be paid in accordance with RCW 83.100.070.
     (2) Upon any adjustment in, or final determination of, the amount of federal tax due((,)) or the amount of the decedent's gross estate by the internal revenue service of the United States, the United States tax court, or any court of competent jurisdiction, the ((person required to file the federal return)) taxpayer shall notify the department in writing within ((sixty days after)) one hundred twenty days of the adjustment or final determination.
     (3) If the department determines the amended return, adjustment, or final determination requires payment of an additional tax under this chapter, the department may assess against the taxpayer such additional amount found to be due within one year of receipt of written notice, or at any time if the taxpayer fails to provide written notice, as required in subsection (1) or (2) of this section. The execution of a written waiver at the request of the department by the taxpayer may extend this limitation. The tax shall be paid in accordance with RCW 83.100.060 and interest shall be paid in accordance with RCW 83.100.070.
     (4) If the department determines the amended return, adjustment, or final determination requires the refund of overpaid tax, penalties, or interest under this chapter, the department shall refund the amount of the overpayment with interest in accordance with RCW 83.100.070. No refund shall be made unless notice is provided as required in subsection (1) or (2) of this section. The taxpayer shall provide the department with any additional information or supporting documents necessary to determine if a refund is due. The execution of a written waiver of the period for assessment under subsection (3) of this section shall extend the time for making a refund, if prior to the expiration of the waiver period an application for refund of such taxes is made by the taxpayer or the department discovers a refund is due.

Sec. 105   RCW 83.100.210 and 1996 c 149 s 18 are each amended to read as follows:
     The department may enter into closing agreements as provided in RCW 82.32.350 and 82.32.360. In the event of a concurrent audit of a taxpayer by the department and the federal government or concurrent appeals by a taxpayer before the department and the federal government, the department may in its sole discretion agree in writing to accept a future determination by the federal government of a question of fact.

Sec. 201   RCW 83.100.040 and 1988 c 64 s 4 are each amended to read as follows:
     (1) A tax in an amount computed as provided in this section is imposed on every transfer of property located in Washington ((of every nonresident)).
     (2) The tax shall be computed by multiplying the federal credit by a fraction, the numerator of which is the value of the property located in Washington, and the denominator of which is the value of the decedent's gross estate.
     (3) ((The transfer of the property of a nonresident is exempt from the tax imposed by this section to the extent that the property of residents is exempt from taxation under the laws of the state in which the nonresident is domiciled.)) For the purposes of this section, any intangible personal property owned by a resident is located in Washington.

Sec. 301   RCW 83.100.150 and 1988 c 64 s 14 are each amended to read as follows:
     (((1))) The department may collect the estate tax imposed under RCW ((83.100.030 and)) 83.100.040, including interest and penalties, and shall represent this state in all matters pertaining to the same, either before courts or in any other manner. ((At any time after the Washington return is due, the department may file its findings regarding the amount of the tax, the federal credit, the person required to file the federal return, and all persons having an interest in property subject to the tax with the clerk of the superior court in the matter of the estate of the decedent or, if no probate or administration proceedings have been commenced in any court of this state, of the superior court for the county in which the decedent was a resident, if the resident was a domiciliary, or, if the decedent was a nondomiciliary, of any superior court which has jurisdiction over the property. Such a court first acquiring jurisdiction shall retain jurisdiction to the exclusion of every other court.
     (2) The department may collect the generation-skipping transfer tax under RCW 83.100.045, including interest and penalties, and shall represent this state in all matters pertaining to the same, either before courts or in any other manner. At any time after the Washington return is due, the department may file its findings regarding the amount of the tax, the federal credit, the person required to file the federal return, and all persons having an interest in property subject to the tax with the clerk of the superior court in the matter of the trust or the estate of the decedent, if any, or, if no trust, probate or administration proceedings have been commenced in any court of this state, of any superior court which has jurisdiction over the property. Such a court first acquiring jurisdiction shall retain jurisdiction to the exclusion of every other court.))

Sec. 302   RCW 82.03.130 and 1998 c 54 s 1 are each amended to read as follows:
     (1) The board shall have jurisdiction to decide the following types of appeals:
     (a) Appeals taken pursuant to RCW 82.03.190.
     (b) Appeals from a county board of equalization pursuant to RCW 84.08.130.
     (c) Appeals by an assessor or landowner from an order of the director of revenue made pursuant to RCW 84.08.010 and 84.08.060, if filed with the board of tax appeals within thirty days after the mailing of the order, the right to such an appeal being hereby established.
     (d) Appeals by an assessor or owner of an intercounty public utility or private car company from determinations by the director of revenue of equalized assessed valuation of property and the apportionment thereof to a county made pursuant to chapter 84.12 and 84.16 RCW, if filed with the board of tax appeals within thirty days after mailing of the determination, the right to such appeal being hereby established.
     (e) Appeals by an assessor, landowner, or owner of an intercounty public utility or private car company from a determination of any county indicated ratio for such county compiled by the department of revenue pursuant to RCW 84.48.075: PROVIDED, That
     (i) Said appeal be filed after review of the ratio under RCW 84.48.075(3) and not later than fifteen days after the mailing of the certification; and
     (ii) The hearing before the board shall be expeditiously held in accordance with rules prescribed by the board and shall take precedence over all matters of the same character.
     (f) Appeals from the decisions of sale price of second class shorelands on navigable lakes by the department of natural resources pursuant to RCW 79.94.210.
     (g) Appeals from urban redevelopment property tax apportionment district proposals established by governmental ordinances pursuant to RCW 39.88.060.
     (h) Appeals from interest rates as determined by the department of revenue for use in valuing farmland under current use assessment pursuant to RCW 84.34.065.
     (i) Appeals from revisions to stumpage value tables used to determine value by the department of revenue pursuant to RCW 84.33.091.
     (j) Appeals from denial of tax exemption application by the department of revenue pursuant to RCW 84.36.850.
     (k) Appeals pursuant to RCW 84.40.038(3).
     (l) Appeals pursuant to section 303 of this act.
     (2) Except as otherwise specifically provided by law hereafter, the provisions of RCW 1.12.070 shall apply to all notices of appeal filed with the board of tax appeals.

NEW SECTION.  Sec. 303   A new section is added to chapter 83.100 RCW to read as follows:
     If the sole issue for appeal is the value of property contained in the gross estate, a person otherwise entitled to petition the department for a correction of the tax imposed by this chapter pursuant to RCW 82.32.160 or 82.32.170 may include in its petition a request for a direct appeal to the board of tax appeals. The department in its sole discretion may grant or deny the request. The department shall notify the petitioner of its decision by mail.

Sec. 304   RCW 82.03.180 and 2000 c 103 s 4 are each amended to read as follows:
     Judicial review of a decision of the board of tax appeals shall be de novo in accordance with the provisions of RCW 82.32.180 or 84.68.020 as applicable except when the decision has been rendered pursuant to a formal hearing elected under RCW 82.03.140 or 82.03.190, in which event judicial review may be obtained only pursuant to RCW 34.05.510 through 34.05.598: PROVIDED, HOWEVER, That nothing herein shall be construed to modify the rights of a taxpayer conferred by RCW 82.32.180 and 84.68.020 to sue for tax refunds: AND PROVIDED FURTHER, That no review from a decision made pursuant to RCW 82.03.130(1)(a) may be obtained by a taxpayer unless within the petition period provided by RCW 34.05.542 the taxpayer shall have first paid in full the contested tax, together with all penalties and interest thereon, if any, except for taxes imposed pursuant to chapter 83.100 RCW that are not required to be paid under section 306 of this act. The director of revenue shall have the same right of review from a decision made pursuant to RCW 82.03.130(1)(a) as does a taxpayer; and the director of revenue and all parties to an appeal under RCW 82.03.130(1)(e) shall have the right of review from a decision made pursuant to RCW 82.03.130(1)(e).

Sec. 305   RCW 82.03.190 and 1998 c 54 s 2 are each amended to read as follows:
     Any person having received notice of a denial of a petition or a notice of determination made under RCW 82.32.160, 82.32.170, 82.34.110, or 82.49.060 or having received notice of a granted request for direct review under section 303 of this act may appeal by filing in accordance with RCW 1.12.070 a notice of appeal with the board of tax appeals within thirty days after the mailing of the notice of such denial ((or)), determination, or granted request. In the notice of appeal the taxpayer shall set forth the amount of the tax which the taxpayer contends should be reduced or refunded and the reasons for such reduction or refund, in accordance with rules of practice and procedure prescribed by the board. However, if the notice of appeal relates to an application made to the department under chapter 82.34 RCW, the taxpayer shall set forth the amount to which the taxpayer claims the credit or exemption should apply, and the grounds for such contention, in accordance with rules of practice and procedure prescribed by the board. The board shall transmit a copy of the notice of appeal to the department and all other named parties within thirty days of its receipt by the board. If the taxpayer intends that the hearing before the board be held pursuant to the administrative procedure act (chapter 34.05 RCW), the notice of appeal shall also so state. In the event that the notice of appeal does not so state, the department may, within thirty days from the date of its receipt of the notice of appeal, file with the board notice of its intention that the hearing be held pursuant to the administrative procedure act.

NEW SECTION.  Sec. 306   A new section is added to chapter 83.100 RCW to read as follows:
     (1) Except as provided in subsection (2) of this section, all taxes, penalties, and interest imposed under this chapter shall be paid in full before any action may be instituted in any court to contest all or any part of the taxes, penalties, or interest. No restraining order or injunction shall be granted or issued by any court or judge to restrain or enjoin the collection of any tax or penalty or any part thereof, except upon the ground that the assessment was in violation of the Constitution of the United States or that of the state.
     (2) No taxes, penalties, or interest imposed by this chapter are required to be paid before judicial review if the taxpayer institutes an action with the superior court of Thurston county within:
     (a) Sixty days of the issuance of a notice of tax due under section 102 of this act;
     (b) Sixty days of the mailing of a notice of a denial of a petition or a notice of a determination under RCW 82.32.160; or
     (c) Thirty days of a decision of the board of tax appeals, if the tax was not paid prior to review by the board.

Sec. 401   RCW 83.100.020 and 2001 c 320 s 15 are each amended to read as follows:
     As used in this chapter:
     (1) "Decedent" means a deceased individual;
     (2) "Department" means the department of revenue, the director of that department, or any employee of the department exercising authority lawfully delegated to him by the director;
     (3) "Federal credit" means (((a) for a transfer,)) the maximum amount of the credit for state taxes allowed by section 2011 of the Internal Revenue Code((; and (b) for a generation-skipping transfer, the maximum amount of the credit for state taxes allowed by section 2604 of the Internal Revenue Code));
     (4) "Federal return" means any tax return required by chapter 11 ((or 13)) of the Internal Revenue Code;
     (5) "Federal tax" means (((a) for a transfer,)) a tax under chapter 11 of the Internal Revenue Code((; and (b) for a generation-skipping transfer, the tax under chapter 13 of the Internal Revenue Code;
     (6) "Generation-skipping transfer" means a "generation-skipping transfer" as defined and used in section 2611 of the Internal Revenue Code));
     (((7))) (6) "Gross estate" means "gross estate" as defined and used in section 2031 of the Internal Revenue Code;
     (((8))) (7) "Nonresident" means a decedent who was domiciled outside Washington at his death;
     (((9))) (8) "Person" means any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate, or other entity and, to the extent permitted by law, any federal, state, or other governmental unit or subdivision or agency, department, or instrumentality thereof;
     (((10))) (9) "Person required to file the federal return" means any person required to file a return required by chapter 11 ((or 13)) of the Internal Revenue Code, such as the personal representative of an estate((; or a transferor, trustee, or beneficiary of a generation-skipping transfer;)) or a qualified heir with respect to qualified real property, as defined and used in section 2032A(c) of the Internal Revenue Code;
     (((11))) (10) "Property" means (((a) for a transfer,)) property included in the gross estate; ((and (b) for a generation-skipping transfer, all real and personal property subject to the federal tax;))
     (((12))) (11) "Resident" means a decedent who was domiciled in Washington at time of death;
     (12) "Taxpayer" means a person upon whom tax is imposed under this chapter, including an estate or a person liable for tax under RCW 83.100.120;
     (13) "Transfer" means "transfer" as used in section 2001 of the Internal Revenue Code, or a disposition or cessation of qualified use as defined and used in section 2032A(c) of the Internal Revenue Code; and
     (14) (("Trust" means "trust" under Washington law and any arrangement described in section 2652 of the Internal Revenue Code; and
     (15))) "Internal Revenue Code" means, for the purposes of this chapter and RCW 83.110.010, the United States Internal Revenue Code of 1986, as amended or renumbered as of January 1, 2001.

Sec. 402   RCW 83.100.110 and 1988 c 64 s 11 are each amended to read as follows:
     (1) Unless any tax due under this chapter is sooner paid in full, it shall be a lien upon the property subject to the tax for a period of ten years from the date of the transfer ((or the generation-skipping transfer)), except that any part of the property which is used for the payment of claims against the property or expenses of its administration, allowed by any court having jurisdiction thereof, shall be divested of the lien. Liens created under this subsection shall be qualified as follows:
     (a) Any part of the property subject to the tax which is sold to a bona fide purchaser shall be divested of the lien and the lien shall be transferred to the proceeds of the sale; and
     (b) The lien shall be subordinate to any mortgage or deed of trust on the property pursuant to an order of court for payment of claims against the property or expenses of administration. The lien shall attach to any proceeds from the sale of the property in excess of the obligations secured by the mortgage or deed of trust and the expenses of sale, including a reasonable charge by the trustee and by his or her attorney where the property has been sold by a nonjudicial trustee's sale pursuant to chapter 61.24 RCW, and including court costs and any attorneys' fees awarded by the superior court of the county in which the property is sold at sheriff's sale pursuant to a judicial foreclosure of the mortgage or deed of trust.
     (2) If the person required to file the federal return has obtained an extension of time for payment of the federal tax or has elected to pay such tax in installments, the tax lien under this section shall be extended as necessary to prevent its expiration prior to twelve months following the expiration of any such extension or the installment.
     (3) The tax lien shall be extended as necessary to prevent its expiration prior to twelve months following the conclusion of litigation of any question affecting the determination of the amount of tax due if a lis pendens has been filed with the auditor of the county in which the property is located.

NEW SECTION.  Sec. 403   RCW 83.100.045 (Generation-skipping transfers -- Tax imposed -- Credit for tax paid to another state) and 1988 c 64 s 5 are each repealed.

NEW SECTION.  Sec. 404   Sections 401 through 403 of this act apply to transfers resulting from deaths occurring on or after January 1, 2004.

Sec. 501   RCW 82.32.070 and 1999 c 358 s 14 are each amended to read as follows:
     (1) Every person liable for any fee or tax imposed by chapters 82.04 through 82.27 or 83.100 RCW shall keep and preserve, for a period of five years, suitable records as may be necessary to determine the amount of any tax for which he may be liable, which records shall include copies of all federal income tax and state tax returns and reports made by him. All his books, records, and invoices shall be open for examination at any time by the department of revenue. In the case of an out-of-state person or concern which does not keep the necessary books and records within this state, it shall be sufficient if it produces within the state such books and records as shall be required by the department of revenue, or permits the examination by an agent authorized or designated by the department of revenue at the place where such books and records are kept. Any person who fails to comply with the requirements of this section shall be forever barred from questioning, in any court action or proceedings, the correctness of any assessment of taxes made by the department of revenue based upon any period for which such books, records, and invoices have not been so kept and preserved.
     (2) A person liable for any fee or tax imposed by chapters 82.04 through 82.27 RCW who contracts with another person or entity for work subject to chapter 18.27 or 19.28 RCW shall obtain and preserve a record of the unified business identifier account number for the person or entity performing the work. Failure to obtain or maintain the record is subject to RCW 39.06.010 and to a penalty determined by the director, but not to exceed two hundred fifty dollars. The department shall notify the taxpayer and collect the penalty in the same manner as penalties under RCW 82.32.100.

Sec. 502   RCW 82.32.105 and 1998 c 304 s 13 are each amended to read as follows:
     (1) If the department of revenue finds that the payment by a taxpayer of a tax less than that properly due or the failure of a taxpayer to pay any tax by the due date was the result of circumstances beyond the control of the taxpayer, the department of revenue shall waive or cancel any penalties imposed under this chapter or chapter 83.100 RCW with respect to such tax.
     (2) The department shall waive or cancel the penalty imposed under RCW 82.32.090(1) when the circumstances under which the delinquency occurred do not qualify for waiver or cancellation under subsection (1) of this section if:
     (a) The taxpayer requests the waiver for a tax return required to be filed under RCW 82.32.045, 82.14B.061, 82.23B.020, 82.27.060, 82.29A.050, or 84.33.086; and
     (b) The taxpayer has timely filed and remitted payment on all tax returns due for that tax program for a period of twenty-four months immediately preceding the period covered by the return for which the waiver is being requested.
     (3) The department shall waive or cancel interest imposed under this chapter or chapter 83.100 RCW if:
     (a) The failure to timely pay the tax was the direct result of written instructions given the taxpayer by the department; or
     (b) The extension of a due date for payment of an assessment of deficiency was not at the request of the taxpayer and was for the sole convenience of the department.
     (4) The department of revenue shall adopt rules for the waiver or cancellation of penalties and interest imposed by this chapter or chapter 83.100 RCW.

Sec. 503   RCW 82.32.265 and 1987 c 80 s 5 are each amended to read as follows:
     (1) The department may retain, by written contract, collection agencies licensed under chapter 19.16 RCW or licensed under the laws of another state or the District of Columbia for the purpose of collecting from sources outside the state of Washington taxes including interest and penalties thereon imposed under this title ((and)), RCW 84.33.041, and chapter 83.100 RCW.
     (2) Only accounts represented by tax warrants filed in the superior court of a county in the state as provided by RCW 82.32.210 may be assigned to a collection agency, and no such assignment may be made unless the department has previously notified or has attempted to notify the taxpayer of his or her right to petition for correction of assessment within the time provided and in accordance with the procedures set forth in chapter 82.32 RCW.
     (3) Collection agencies assigned accounts for collection under this section shall have only those remedies and powers that would be available to them as assignees of private creditors. However, nothing in this section limits the right to enforce the liability for taxes lawfully imposed under the laws of this state in the courts of another state or the District of Columbia as provided by the laws of such jurisdictions and RCW 4.24.140 and 4.24.150.
     (4) The account of the taxpayer shall be credited with the amounts collected by a collection agency before reduction for reasonable collection costs, including attorneys fees, that the department is authorized to negotiate on a contingent fee or other basis.

Sec. 504   RCW 82.32.330 and 2000 c 173 s 1 and 2000 c 106 s 1 are each reenacted and amended to read as follows:
     (1) For purposes of this section:
     (a) "Disclose" means to make known to any person in any manner whatever a return or tax information;
     (b) "Return" means a tax or information return or claim for refund required by, or provided for or permitted under, the laws of this state which is filed with the department of revenue by, on behalf of, or with respect to a person, and any amendment or supplement thereto, including supporting 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) the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability deficiencies, overassessments, or tax payments, whether taken from the taxpayer's books and records or any other source, (iii) whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, (iv) a part of a written determination that is not designated as a precedent and disclosed pursuant to RCW 82.32.410, or a background file document relating to a written determination, and (v) other data received by, recorded by, prepared by, furnished to, or collected by the department of revenue with respect to the determination of the existence, or possible existence, of liability, or the amount thereof, of a person under the laws of this state for a tax, penalty, interest, fine, forfeiture, or other imposition, or offense: PROVIDED, That data, material, or documents that do not disclose information related to a specific or identifiable taxpayer do not constitute tax information under this section. Except as provided by RCW 82.32.410, nothing in this chapter shall require any person possessing data, material, or documents made confidential and privileged by this section to delete information from such 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, or any 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 and privileged, and except as authorized by this section, neither the department of revenue nor any other person may disclose any return or tax information.
     (3) The foregoing, however, shall not prohibit the department of revenue from:
     (a) Disclosing such return or tax information in a civil or criminal judicial proceeding or an administrative proceeding:
     (i) In respect of any tax imposed under the laws of this state if the taxpayer or its officer or other person liable under Title 82 RCW or chapter 83.100 RCW is a party in the proceeding; or
     (ii) In which the taxpayer about whom such return or tax information is sought and another state agency are adverse parties in the proceeding;
     (b) Disclosing, subject to such requirements and conditions as the director shall prescribe by rules adopted pursuant to chapter 34.05 RCW, such return or tax information regarding a taxpayer to such taxpayer or to such person or persons as that taxpayer may designate in a request for, or consent to, such disclosure, or to any other person, at the taxpayer's request, to the extent necessary to comply with a request for information or assistance made by the taxpayer to such other person: PROVIDED, That tax information not received from the taxpayer shall not be so disclosed if the director determines that such disclosure would compromise any investigation or litigation by any federal, state, or local government agency in connection with the civil or criminal liability of the taxpayer or another person, or that such disclosure would identify a confidential informant, or that such disclosure is contrary to any agreement entered into by the department that provides for the reciprocal exchange of information with other government agencies which agreement requires confidentiality with respect to such information unless such information is required to be disclosed to the taxpayer by the order of any court;
     (c) Disclosing the name of a taxpayer with a deficiency greater than five thousand dollars and against whom a warrant under RCW 82.32.210 has been either issued or filed and remains outstanding for a period of at least ten working days. The department shall not be required to disclose any information under this subsection if a taxpayer: (i) Has been issued a tax assessment; (ii) has been issued a warrant that has not been filed; and (iii) has entered a deferred payment arrangement with the department of revenue and is making payments upon such deficiency that will fully satisfy the indebtedness within twelve months;
     (d) Disclosing the name of a taxpayer with a deficiency greater than five thousand dollars and against whom a warrant under RCW 82.32.210 has been filed with a court of record and remains outstanding;
     (e) Publishing statistics so classified as to prevent the identification of particular returns or reports or items thereof;
     (f) Disclosing such return or tax information, for official purposes only, to the governor or attorney general, or to any state agency, or to any committee or subcommittee of the legislature dealing with matters of taxation, revenue, trade, commerce, the control of industry or the professions;
     (g) Permitting the department of revenue's records to be audited and examined by the proper state officer, his or her agents and employees;
     (h) Disclosing any such return or tax information to a peace officer as defined in RCW 9A.04.110 or county prosecuting attorney, for official purposes. The disclosure may be made only in response to a search warrant, subpoena, or other court order, unless the disclosure is for the purpose of criminal tax enforcement. A peace officer or county prosecuting attorney who receives the return or tax information may disclose that return or tax information only for use in the investigation and a related court proceeding, or in the court proceeding for which the return or tax information originally was sought;
     (i) Disclosing any such return or tax information to the proper officer of the internal revenue service of the United States, the Canadian government or provincial governments of Canada, or to the proper officer of the tax department of any state or city or town or county, for official purposes, but only if the statutes of the United States, Canada or its provincial governments, or of such other state or city or town or county, as the case may be, grants substantially similar privileges to the proper officers of this state;
     (j) Disclosing any such return or tax information to the Department of Justice, the Bureau of Alcohol, Tobacco and Firearms of the Department of the Treasury, the Department of Defense, the United States Customs Service, the Coast Guard of the United States, and the United States Department of Transportation, or any authorized representative thereof, for official purposes;
     (k) Publishing or otherwise disclosing the text of a written determination designated by the director as a precedent pursuant to RCW 82.32.410;
     (l) Disclosing, in a manner that is not associated with other tax information, the taxpayer name, entity type, business address, mailing address, revenue tax registration numbers, North American industry classification system or standard industrial classification code of a taxpayer, and the dates of opening and closing of business. This subsection shall not be construed as giving authority to the department to give, sell, or provide access to any list of taxpayers for any commercial purpose;
     (m) Disclosing such return or tax information that is also maintained by another Washington state or local governmental agency as a public record available for inspection and copying under the provisions of chapter 42.17 RCW or is a document maintained by a court of record not otherwise prohibited from disclosure;
     (n) Disclosing such return or tax information to the United States department of agriculture for the limited purpose of investigating food stamp fraud by retailers;
     (o) Disclosing to a financial institution, escrow company, or title company, in connection with specific real property that is the subject of a real estate transaction, current amounts due the department for a filed tax warrant, judgment, or lien against the real property; ((or))
     (p) Disclosing to a person against whom the department has asserted liability as a successor under RCW 82.32.140 return or tax information pertaining to the specific business of the taxpayer to which the person has succeeded; or
     (q) Disclosing to a person against whom the department has asserted liability under RCW 83.100.120 return or tax information pertaining to that person's liability for tax under chapter 83.100 RCW.
     (4)(a) The department may disclose return or taxpayer information to a person under investigation or during any court or administrative proceeding against a person under investigation as provided in this subsection (4). The disclosure must be in connection with the department's official duties relating to an audit, collection activity, or a civil or criminal investigation. The disclosure may occur only when the person under investigation and the person in possession of data, materials, or documents are parties to the return or tax information to be disclosed. The department may disclose return or tax information such as invoices, contracts, bills, statements, resale or exemption certificates, or checks. However, the department may not disclose general ledgers, sales or cash receipt journals, check registers, accounts receivable/payable ledgers, general journals, financial statements, expert's workpapers, income tax returns, state tax returns, tax return workpapers, or other similar data, materials, or documents.
     (b) Before disclosure of any tax return or tax information under this subsection (4), the department shall, through written correspondence, inform the person in possession of the data, materials, or documents to be disclosed. The correspondence shall clearly identify the data, materials, or documents to be disclosed. The department may not disclose any tax return or tax information under this subsection (4) until the time period allowed in (c) of this subsection has expired or until the court has ruled on any challenge brought under (c) of this subsection.
     (c) The person in possession of the data, materials, or documents to be disclosed by the department has twenty days from the receipt of the written request required under (b) of this subsection to petition the superior court of the county in which the petitioner resides for injunctive relief. The court shall limit or deny the request of the department if the court determines that:
     (i) The data, materials, or documents sought for disclosure are cumulative or duplicative, or are obtainable from some other source that is more convenient, less burdensome, or less expensive;
     (ii) The production of the data, materials, or documents sought would be unduly burdensome or expensive, taking into account the needs of the department, the amount in controversy, limitations on the petitioner's resources, and the importance of the issues at stake; or
     (iii) The data, materials, or documents sought for disclosure contain trade secret information that, if disclosed, could harm the petitioner.
     (d) The department shall reimburse reasonable expenses for the production of data, materials, or documents incurred by the person in possession of the data, materials, or documents to be disclosed.
     (e) Requesting information under (b) of this subsection that may indicate that a taxpayer is under investigation does not constitute a disclosure of tax return or tax information under this section.
     (5) Any person acquiring knowledge of any return or tax information in the course of his or her employment with the department of revenue and any person acquiring knowledge of any return or tax information as provided under subsection (3)(f), (g), (h), (i), (j), or (n) of this section, who discloses any such return or tax information to another person not entitled to knowledge of such return or tax information under the provisions of this section, is guilty of a misdemeanor. If the person guilty of such violation is an officer or employee of the state, such person shall forfeit such office or employment and shall be incapable of holding any public office or employment in this state for a period of two years thereafter.

NEW SECTION.  Sec. 601   The following acts or parts of acts are each repealed:
     (1) RCW 83.100.030 (Residents -- Estate tax imposed -- Credit for tax paid other state) and 1988 c 64 s 3 & 1981 2nd ex.s. c 7 s 83.100.030;
     (2) RCW 83.100.160 (Clerk to give notice of filings) and 1993 c 413 s 1 & 1988 c 64 s 15;
     (3) RCW 83.100.170 (Court order) and 1988 c 64 s 16;
     (4) RCW 83.100.180 (Objections) and 1999 c 42 s 636 & 1988 c 64 s 17; and
     (5) RCW 83.100.190 (Hearing by court) and 1988 c 64 s 18.

NEW SECTION.  Sec. 602   Part headings used in this act are not any part of the law.

NEW SECTION.  Sec. 603   This act applies to all returns not filed with the department of revenue before the effective date of this act.

NEW SECTION.  Sec. 604   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.