HOUSE BILL REPORT

HB 1370

BYRepresentatives Holland, Appelwick, Taylor, Grimm, Silver, Braddock, Fuhrman, Bristow, Nealey, Valle, Padden, Brough, McLean, Basich, Schoon, H. Sommers, Winsley, May, B. Williams, Beck, Butterfield, Ballard, Baugher, Lewis, J. Williams, Amondson, Sanders, Kremen, Betrozoff, Rasmussen, Doty, Hankins, Miller, Hine, Holm and Cooper

Increasing the head of family exemption for personal property taxes.

House Committe on Ways & Means/Revenue

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (9)

      Signed by Representatives Appelwick, Chair; Basich, Dellwo, Holland, Rust, Schoon, Taylor, Valle and Winsley.

House Staff:Rick Wickman (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS/REVENUE

FEBRUARY 2, 1988

BACKGROUND:

All personal property is subject to property taxation except where exempted by law.  Generally, personal property that is subject to tax includes office equipment, office machinery, and other personal property used in private business.

The constitution and statutes provide a personal property tax exemption for each household of $300.  RCW 84.36.110 provides that all household effects are exempt from personal property taxes.  However, an individual who operates a business from a home would be subject to personal property taxation with an exemption of $300.  This exemption was provided by law in 1935.

SUMMARY:

SUBSTITUTE BILL:  The proposed bill increases the household personal property tax exemption from $300 to $3,000.  The proposed bill would implement the proposed constitutional amendment embodied in HJR 4222.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Clarified that the implementation date is for taxes levied and collected in 1990.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Available.

Effective Date:The bill takes effect January 1, 1989 provided the proposed amendment is ratified by the voters.

House Committee ‑ Testified For:    Ray Ryan, Cowlitz County Assessor.

House Committee - Testified Against:      Meta Heller, Tax Facts.

House Committee - Testimony For:    The $300 personal property tax exemption has not been increased since 1935.  Taxes collected on $300 amounts to less than $4 on the average levies which is less than the cost of administration.  An increase in the personal property tax exemption will assist the administration of personal property taxation through the elimination of tax accounts that are costly to administer.

House Committee - Testimony Against:      There should be no exemption for personal property taxes as all property, real and personal should be treated the same.