Property Tax. 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.  The Washington State Constitution limits regular property tax levies to a maximum of 1 percent of the property's value.  Excess levies are not subject to this constitutional limit and require voter approval.  There are statutory rate maximums for individual taxing districts and aggregate rate maximums to keep the total tax rate of regular property taxes within the constitutional limit.

All regular levies, except the state levies, are subject to a statutory revenue growth limit. If the taxing authority has a population of 10,000 or more, the revenue growth limit is the lesser of inflation, or 1 percent plus the valuation of new construction.  If the taxing authority has a population of less than 10,000, the revenue growth limit is 1 percent plus the value of new construction.

Property Tax Exemptions for Nonprofits. In Washington, nonprofit entities are generally subject to property tax. A variety of property tax exemptions are available for specific activities provided by nonprofit entities. Activities provided by nonprofit entities that may be eligible for a property tax exemption include certain social services, such as medical, counseling, or therapy services, youth character building, food and clothing banks, assistance and housing for persons with developmental disabilities, day care centers, veterans support services, and the development of affordable housing.

Temporary Leases of Property. A nonprofit entity that owns property must use it exclusively for the activity for which the exemption is granted. Limited exclusions do apply to certain property tax exemptions—allowing the nonprofit to temporarily rent or loan the property to another organization for any use that would otherwise qualify for a property tax exemption if the property was owned by the organization to which it is rented or loaned.  The following conditions must be met:  

• any rent or donations received for use of the property must be reasonable and may not exceed the maintenance and operation expenses attributable to the portion of the property loaned or rented;
• use of the property for fund-raising events must be consistent with the purposes for which the exemption is granted or are conducted by a nonprofit organization; and
• use of the property for purposes other than the purpose for which the exemption is granted may not exceed 50 days each calendar year.

An inadvertent use of the property in a manner inconsistent with the purpose for which exemption is granted does not subject the property to tax, if the inadvertent use is not part of a pattern of use.

Nonprofit Homeownership Property Tax Exemption.  All real property owned by a nonprofit entity or qualified cooperative association for the purpose of developing or redeveloping on the real property one or more residences to be sold to low-income households, including certain land leases, is exempt from state and local property taxes. The term "low-income household" means a single person, family, or unrelated persons living together whose adjusted income is less than 80 percent of the median family income, adjusted for family size as determined by the federal Department of Housing and Urban Development for the county in which the property is located. 

Tax Preference Performance Review and Expiration. State law provides a range of tax preferences that confer reduced tax liability upon a designated class of taxpayer. Tax preferences include tax exclusions, deductions, exemptions, preferential tax rates, deferrals, and credits.  All new tax preference legislation is required to include a tax preference performance statement. The performance statement must clearly specify the public policy objectives of the tax preference and the specific metrics and data that will be used by the Joint Legislative Audit and Review Committee to evaluate the efficacy of the tax preference.  An automatic ten-year expiration date is applied to new tax preferences if an alternative expiration date is not provided in the legislation. 

Nonprofit Homeownership Property Tax Exemption. Beginning with taxes levied for collection in 2027, and thereafter, the low-income homeownership property tax does not expire as a consequence of the real property being transferred to another nonprofit organization, association, or corporation for any use that would otherwise qualify for and is granted a property tax exemption. A nonprofit entity receiving the low-income homeownership property tax exemption must submit an annual renewal declaration on or before March 31st each year in order to maintain its tax exemption. 

A nonprofit entity receiving the low-income homeownership property tax exemption may temporarily rent or loan the property to another organization without expiring the exemption, as long as certain requirements are met. 

Tax Preference Performance Review and Expiration. The act is exempt from tax preference performance review and automatic expiration.  

No public hearing was held.

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