BILL REQ. #:  H-4314.2 

Read first time 01/29/08.   Referred to Committee on Finance.

     AN ACT Relating to studying the fairness and efficiency of the tax appeals system in resolving tax controversies; and adding a new section to chapter 82.03 RCW.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.03 RCW to read as follows:
     (1) The legislature recognizes that concerns over tax fairness can affect the rate of voluntary compliance, as well as businesses and property owners' confidence in government. Fair and efficient resolution of tax controversies are in everyone's interests. Concerns exist as to whether the current systems available for appealing administrative tax decisions provide tax fairness in this state that is in accord with the best interests of the state and taxpayers, including property owners and the business community.
     (2) Therefore, the legislature must study whether the existing tax appeals system is fair and efficient in resolving tax controversies and whether a new tax court should be established in Washington state to hear tax controversies, and if so recommended, its role and basic operating concepts. The committee established under this section may consider topics and issues necessary for an evaluation of the tax appeals system. The committee must consider the following:
     (a) The jurisdiction and role of the board of tax appeals and any recommended changes;
     (b) Whether taxpayers should be required to pay the taxes under controversy to obtain review of administrative actions and to obtain access to the superior courts, board of tax appeals, or any tribunal;
     (c) Jurisdictional, forum selection, and other procedural issues;
     (d) The precedential effect of department determinations; superior court, board of tax appeals, and tax court decisions;
     (e) The role of tax professionals other than members of the bar in tax appeals;
     (f) Whether excise and property tax controversies involving towns, cities, counties, or any other taxing district should be resolved in different tribunals than those used to resolve state tax controversies;
     (g) Whether the salary level of employment positions with the board of tax appeals is sufficient for such positions to be competitive in attracting and retaining the needed work staff; and
     (h) Other topics deemed to be useful or prudent for the legislature to consider by the committee created under this section.
     (3) To perform the study, a committee must be convened with the following members:
     (a) One representative from the attorney general's office to be chosen by the attorney general;
     (b) One representative from among the administrative law judges of the department's appeals division to be chosen by the director of the department;
     (c) One representative from the board of tax appeals to be chosen by the board;
     (d) One representative of Thurston county superior court to be chosen by the presiding judge;
     (e) One representative of the Washington state supreme court to be chosen by the supreme court;
     (f) Two members of the Washington state bar association, to be chosen by the Washington state bar association, who must be in private practice with substantial state and local tax experience; and one of the two members must be from a law firm of more than twenty lawyers and the other member must be from a law firm of twenty, or less than twenty, lawyers;
     (g) Two members of the Washington society of certified public accountants, to be chosen by the Washington society of certified public accountants, who are in private practice with substantial state and local tax experience; and one of the two members must be from a certified public accountant firm of more than twenty certified public accountants and the other member must be from a certified public accountant firm of twenty, or less than twenty, certified public accountants;
     (h) One representative from the department, to be chosen by the department;
     (i) One representative from local government, to be chosen by the mutual agreement of the association of Washington cities and the Washington state association of counties; and
     (j) Two representatives of the taxpaying business community, to be chosen by the association of Washington business, whose primary responsibilities include overseeing tax compliance, audit, and appeals of Washington state and local tax controversies for their respective employers.
     (4) The committee must choose its chair from among its membership.
     (5) Legislative staff from the house of representatives and senate fiscal committees with senate committee services and the office of program research must provide lead support staff to the committee, along with additional staff support from the department, the board of tax appeals, the supreme court, and the Thurston county superior court.
     (6) The department must report its preliminary findings and recommendations to the appropriate legislative committee by November 30, 2008, and its final recommendations no later than September 1, 2009.