WSR 98-09-105



[Filed April 22, 1998, 10:24 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-16-011.

Title of Rule: WAC 192-12-040 Tax payments by employers, 192-12-041 Application of payments, and 192-12-042 Reports and tax payments subject to penalty.

Purpose: WAC 192-12-040 specifies the intervals for payment of unemployment taxes; WAC 192-12-041 specifies the order in which tax payments will be applied; and WAC 192-12-042 clarifies penalties for late payment or reporting of taxes.

Statutory Authority for Adoption: RCW 50.12.010 and 50.12.040.

Statute Being Implemented: RCW 43.05.140 and 50.12.220.

Summary: RCW 43.05.140 directs the agency to establish a pilot voluntary audit program. WAC 192-12-042 is amended to add a request by an employer for a voluntary audit to the good cause reasons for waiver of late penalty. The remainder of the rule, and WAC 192-12-040 and 192-12-041, are rewritten for purposes of clarity and understandability.

Reasons Supporting Proposal: This rule-making action is taken in accordance with Executive Order 97-02 and the department's regulatory improvement plan.

Name of Agency Personnel Responsible for Drafting: Juanita Myers, 212 Maple Park, Olympia, (360) 902-9665; Implementation and Enforcement: Dale Ziegler, 212 Maple Park, Olympia, (360) 902-9303.

Name of Proponent: Employment Security Department, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: WAC 192-12-042 clarifies the reports that are subject to penalty, and lists good cause reasons the department may use to grant waiver of penalty, as provided by RCW 50.12.220. The proposed amendment adds a new good cause reason for waiver of penalty.

WAC 192-12-040 and 192-12-041 specify the intervals at which tax payments are due and the order in which payments will be applied. All changes proposed here are of a housekeeping nature only, to update the language of the rules consistent with current terminology and to provide greater clarity and readability.

Proposal Changes the Following Existing Rules: WAC 192-12-042 is amended to add a good cause reason for waiving the penalty for late payment or reporting of taxes. The remainder of the rule, and WAC 192-12-040 and 192-12-041, are rewritten to add clarity and improve understandability.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed amendments do not add any reporting requirements for businesses. The only substantive change is the addition of a good cause reason allowing for waiver of penalties for late reporting or payment of unemployment taxes. All other changes are housekeeping only, to clarify language.

RCW 34.05.328 applies to this rule adoption. The proposed amendment to WAC 192-12-042 constitutes a significant legislative rule within the meaning of RCW 34.05.328 because, by adding a reason under which the department can waive a penalty for late reporting or payment of taxes, it makes a significant amendment to a regulatory program

Hearing Location: Employment Security Department, 212 Maple Park, 2nd Floor Conference Room, Olympia, WA, on May 27, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Karen LaFreniere, Affirmative Action, by May 22, 1998, TDD (360) 902-9589, or (360) 902-9582.

Submit Written Comments to: Barney Hilliard, Rules Coordinator, Employment Security Department, P.O. Box 9046, Olympia, WA 98504-9046, FAX (360) 438-3226, by May 26, 1998.

Date of Intended Adoption: June 1, 1998.

April 20, 1998

Carver Gayton


AMENDATORY SECTION (Amending WSR 85-11-038 (Order 1-85), filed 5/15/85)

WAC 192-12-040  ((Contributions)) Tax payments by employers--RCW 50.24.010. ((RCW 50.24.010 provides in part:

"Contributions shall accrue and become payable by each employer (except employers as described in RCW 50.44.010 who have properly elected to make payments in lieu of contributions and those employers who are required to make payments in lieu of contributions) for each calendar year in which the employer is subject to this title at the rate established pursuant to chapter 50.29 RCW.

"In each rate year, the amount of wages subject to tax for each individual shall be one hundred fifteen percent of the amount of wages subject to tax for the previous year rounded to the next lower one hundred dollars: Provided, That the amount of wages subject to tax in any rate year shall not exceed eighty percent of the 'average annual wage for contributions purposes' for the second preceding calendar year rounded to the next lower one hundred dollars: Provided further, That the amount subject to tax shall be twelve thousand dollars for rate year 1984 and ten thousand dollars for rate year 1985.

* * *

"Contributions shall become due and be paid by each employer to the treasurer for the unemployment compensation fund in accordance with such regulations as the commissioner may prescribe, * * *."

The commissioner accordingly prescribes:))

(1) ((Contributions shall become)) Taxes are ((due and be)) payable quarterly. ((and shall reach)) Each quarterly payment must include the taxes due on all wages paid during that calendar quarter. Payments are due at the office of the treasurer ((not later than)) by the last day of the month following the end of the calendar quarter for which such ((contributions)) taxes have accrued. ((; but remittances)) Payments made by mail ((shall be deemed to have been received timely in the office of the treasurer if they bear a postmark not later than midnight of the last day of such month)) are considered paid on the postmarked date. ((In the event that)) If the last day of ((such)) the month ((shall)) falls on a Sunday or a legal holiday, ((or on a day which the legislature of the state of Washington has determined to be a nonwork day for the employees of the employment security department, then any contributions reaching the office of the treasurer or any duly constituted agent of the employment security department)) the tax payment must be received or postmarked on the next working day ((shall be deemed to have been received timely. Each quarterly payment shall include contributions accrued upon all wages paid during such quarter)).

(2) ((Whenever any)) Tax payments are due immediately when an employer: ((shall)) ceases ((to do)) business or the (((or his)) account ((with the unemployment compensation division)) is closed by the department(())), is determined by a court to be ((adjudicated a)) bankrupt, makes an assignment for the benefit of his or her creditors, or goes into receivership.((, contributions for employment occurring prior to the date thereof shall become immediately due and payable and if)) Taxes not paid immediately ((shall be)) are delinquent, but interest ((shall)) will not accrue ((thereon)) until the first day of the second month following the end of the calendar quarter for which such ((contributions)) taxes have accrued.

[Statutory Authority: RCW 50.12.010 and 50.12.040. 85-11-038 (Order 1-85), 192-12-040, filed 5/15/85; Order 2602, 192-12-040, filed 4/24/70; Regulation 4, adopted 6/10/53, effective 6/20/53.]

Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

AMENDATORY SECTION (Amending WSR 80-10-052 (Order 4-80), filed 8/6/80)

WAC 192-12-041  Application of payments. (1) A payment received with a ((contribution)) tax report will be applied to the quarter for which the report is filed. A payment exceeding the legal fees, penalties, interests and ((contributions)) taxes due for that quarter will be applied to any other ((indebtedness in the manner)) debt as provided in subsection (2). If no ((indebtedness)) debt exists, a credit statement will be issued for any overpayments.

(2) A payment received without a ((contribution)) tax report will be applied in the following order of priority, beginning with the oldest quarter(('s indebtedness first)):

(a) Lien fees

(b) Warrant fees

(c) Late ((contribution)) tax report penalty

(d) Late ((contribution)) tax payment penalty

(e) Interest charges

(f) ((Contributions)) Tax payments.

[Statutory Authority: RCW 50.12.010 and 50.12.040. 80-10-052 (Order 4-80), 192-12-041, filed 8/6/80. Statutory Authority: RCW 50.12.010. 80-02-034 (Order 1-80), 192-12-041, filed 1/10/80.]

AMENDATORY SECTION (Amending WSR 87-21-002 (Order 5-87), filed 10/8/87)

WAC 192-12-042  Reports and ((contributions)) tax payments subject to penalty. (1) ((Contribution)) Tax reports. ((Any)) An employer who ((fails to file in a timely and complete manner a contribution)) files a late or incomplete tax report as described in WAC 192-12-030 (((2)(a) shall be)) is subject to a penalty of ten dollars per violation, unless ((such)) the penalty is waived by the ((commissioner)) department.

(2) ((Other reports)) Report of employee's wages. Any decision to assess a penalty for ((the)) filing ((of any other report)) a late or incomplete report of employee's wages as described in WAC 192-12-030 ((in an untimely or incomplete manner shall)) will be made on an individual basis by ((the commissioner or)) the chief administrative officer of the tax branch as provided in RCW 50.12.220.

(3) Delinquent ((contributions)) tax payments. For purposes of RCW 50.12.220 ((which provides penalties for delinquent contributions)), ((contributions will be deemed)) tax payments are delinquent as provided in WAC 192-12-040 and RCW 1.12.070. ((For contributions due and payable on wages paid prior to July 1, 1987, no penalty so added shall be less than two dollars per quarter.))

(4) Late penalty. ((Effective f)) For ((contributions)) tax payments due ((and payable)) on wages paid ((on or after July 1, 1987, and for contribution reports which are due for the quarter ending September 30, 1987 and any subsequent quarters)), a minimum $10.00 penalty ((shall)) will be assessed for late payments ((as follows:

(a) A minimum penalty of $10.00 per quarter shall be assessed against delinquent contributions.

(b) If no contributions are delinquent for a quarter, a minimum penalty of $10.00 shall be assessed for a contribution report not filed in a timely manner)).

(5) Penalty waivers. The department may, for good cause, waive penalties in the following ((types of)) situations:

(a) The return was filed on time but inadvertently mailed to another agency;

(b) The delinquency was due to an action of an employee ((or an officer)) of the ((employment security)) department, ((including but not limited to,)) such as providing ((erroneous)) incorrect information to the employer ((in writing or orally)) when the source ((is identifiable)) can be identified, or not furnishing proper forms ((in sufficient time)) to permit the ((timely)) filing of tax reports or the ((timely)) payment of ((contributions)) taxes on time;

(c) The delinquency was caused by the death or serious illness, before the filing deadline, of the employer, ((or)) a member of the employer's immediate family, ((or illness or death of)) the employer's accountant, or a member of the accountant's immediate family((, prior to the filing date)).

(d) The delinquency was caused by the accidental destruction ((by fire or other casualty)) of the employer's place of business or business records.

(e) The department finds the employer to be out of compliance during an employer-requested audit, but the department determines the employer made a good faith effort to comply with all applicable laws and rules.

(6) Waiver requests. A request for a waiver of penalties must((: B)) be ((in letter form)) written, contain all pertinent facts, be accompanied by ((such)) available proof, ((as may be available)) and be filed through a tax office. In all cases the burden of proving the facts is ((upon)) on the employer.

(7) Extensions. The department, for good cause, may extend the due date for filing a report. ((Any extension will be conditioned upon deposit by t)) The employer must make a deposit with the department ((of)) in an amount equal to the estimated tax liability for the reporting period or periods for which the extension is granted. This deposit will be credited to the employer's account and ((will be)) applied to the employer's ((indebtedness)) debt. The amount of the deposit is subject to ((departmental)) approval by the department.

[Statutory Authority: RCW 50.12.010 and 50.12.040. 87-21-002 (Order 5-87), 192-12-042, filed 10/8/87. Statutory Authority: RCW 50.12.010. 80-02-034 (Order 1-80), 192-12-042, filed 1/10/80.]

Legislature Code Reviser


Washington State Code Reviser's Office