2020 property tax legislation

The following is a summary of the significant property tax legislation approved during the regular session of the 2020 Washington State Legislature. We have included links to the Legislature site for each bill that adopted. These sites give a very complete picture of how the measures moved through the legislative process and provide copies of the measures that have been enacted into law. We have also provided contact information for our staff members that may be involved in the implementation of the bill or the ongoing administration of related programs.

HB 2230 - Subjecting federally recognized Indian tribes to the same conditions as state and local governments for property owned exclusively by the tribe (Chapter 272, Laws of 2020)
  • Expands the property tax exemption in RCW 84.36.010 to apply to property acquired for economic development purposes by an Indian tribe after March 1, 2014.
  • Allows cities, in addition to counties, to participate in negotiations with Indian tribes to determine any amount of payment in lieu of leasehold excise tax that must be paid to the counties and cities by the tribes on tax-exempt property used for economic development purposes.
HB 2497 -Adding development of permanently affordable housing to the allowable uses of community revitalization financing, the local infrastructure financing tool, and local revitalization financing

This bill expands community revitalization financing, local infrastructure financing, and local revitalization financing revenues, to be used for “permanently affordable housing,” which includes housing, regardless of ownership, for which there is a legally binding, recorded document in effect that limits the price at which the owner may sell or restricts the occupancy of the unit to a qualified, low-income household, for a period of at least 40 years for a property used for shelter or rental housing, or for a period of at least 25 years for a property to be owned by a low-income household.

HB 2512 - Concerning interest and penalty relief for qualified mobile home and manufactured home owners

This bill adds a three-year waiting period after the date that personal property taxes become delinquent before a mobile or manufactured home may be distrained (seized). It also requires the county treasurer to waive outstanding interest and penalties for delinquent property taxes due from the owner of the mobile home or manufactured home if certain conditions are met.

ESHB 2588 – Improving openness, accountability, and transparency of special purpose districts
  • Prohibits a special purpose district (district) and the county auditor from issuing any payments against the funds of a district that has been determined un-auditable by the State Auditor’s Office (SAO).
  • Prohibits the State Treasurer from distributing any local sales and use taxes to a district that has been determined to be unauditable by SAO.
  • Allows a county to dissolve a district that has been determined to be un-auditable by SAO, and impose a separate property tax levy or assessment if the county assumes responsibility for services previously provided by a dissolved district.
HB 2858 – Concerning requirements for the filing of assessment rolls

This bill revises the annual deadline for county assessors to certify the completed assessment roll to the county board of equalization (BOE), from July 15 to August 15, if a county legislative authority has extended the filing deadline for taxpayers to appeal a change in assessed value to the BOE from 30 days to a maximum of 60 days. The bill impacts approximately 10 of the 39 counties that have extended the BOE petition filing deadline.

SHB 2868 – Allowing for extensions of the specific valuation of historic property for certain properties

This bill allows the special valuation of historic property to be extended by seven additional years, up to twice for a total of 14 additional years, if the property is in a city with a population under 20,000 and in a county listed as a distressed area by the Employment Security Department.

SHB 2950 - Addressing affordable housing needs through the multifamily housing tax exemption by providing an extension of the exemption until January 1, 2022, for certain properties currently receiving a twelve-year exemption and by convening a work group (Partial Veto)

This bill extends through December 31, 2021, the multifamily property tax exemption (MFTE) under RCW 84.14.020 for those properties receiving a 12-year exemption if a property:

  • Satisfies the requirements for the initial exemption period; and
  • The property tax exemption on the property was set to expire between June 11, 2020, and December 31, 2021.

Section 3 of the bill directs the Department of Commence to contract with a nonprofit facilitator to convene a work group, to include the Department, to:

  • Study and make recommendations on certain aspects of the MFTE program; and
  • Provide a follow-up report to the Legislature and the Joint Legislative Audit and Review Committee by December 1, 2020.

Because the work required under Section 3 of the bill was not funded in the budget, the Governor vetoed Section 3.

ESB 5402 - Improving tax and licensing laws administered by the Department, but not including changes to tax laws that are estimated to affect state or local tax collections as reflected in any fiscal note prepared and approved under the process established in chapter 43.88A RCW (Partial Veto)

This bill clarifies and consolidates several tax-related statutes by:

  • Updating language in tax preference performance statements,
  • Deleting references to repealed statutes,
  • Consolidating business and occupation tax deductions for artistic and cultural organizations into one statute,
  • Clarifying county assessor duties regarding property tax deferral program declarations,
  • Repealing obsolete statutes,
  • Recognizing agency name changes,
  • and restoring certain statutory definitions.

The bill provides additional relief to certain taxpayers by:

  • Authorizing the Department to waive penalties assessed on a business for renewing a business license late if the late renewal is due to Department error.
  • Allowing the City of Kent one additional year to join FileLocal rather than requiring the city to partner with the Department for its business licensing needs.
  • Amending the interest calculation for annual returns that are filed late or overpaid to provide that interest accrues from the last day of April, rather than the last day of January.
  • Deleting the requirement that educational institutions claiming a property tax exemption provide detailed information regarding the property, its use, revenue, and the institution itself.
  • Clarifying that claimants need not file duplicate declarations to defer property taxes under the low-income deferral program, senior citizen or disabled person deferral program, and the widows and widowers of qualifying veterans' property tax grant program.

Section 21 of the bill updates an out of date reference to the definition of "hog fuel." The Governor vetoed this section because it duplicates the change to RCW 82.12.956 made in section 3 of House Bill 2848. However, as noted above, the Governor subsequently vetoed HB 2848 in its entirety as a result of the economic impact of the COVID-19 pandemic on state revenue.

SB 5519 - Concerning mosquito control districts
  • Moves provisions for collections and foreclosure as applied to mosquito control districts under property tax collection and foreclosure statutes in chapters 84.56 & 64 RCW, rather than local county road improvement district statutes in chapter 36.88 RCW.
  • Allows county treasurers to charge for collecting assessments on behalf of mosquito control districts.
SSB 5522 – Providing code cities with the ability to annex unincorporated areas pursuant to a jointly approved interlocal agreement with the county

Allows cities to annex unincorporated territory, through an interlocal agreement between the city and the county, to prevent illogical boundaries or ‘islands.’

SB 5628 - Concerning the classification of heavy equipment rental property as inventory
  • Establishes a property tax exemption for heavy equipment rental property owned by a heavy equipment rental property dealer (dealer) beginning January 1, 2022.
  • Creates a new heavy equipment rental tax of 1.25% of the rental price, beginning January 1, 2022, which is collected from the consumer.
  • Distributes the new heavy equipment rental tax as follows:
    • 50% to the Motor Vehicle Fund; and
    • 50% to the Multimodal Transportation Account.
SB 6212 – Concerning the authority of counties, cities, and towns to exceed statutory property tax limitations for the purpose of financing affordable housing for very low-income households and low-income households

This bill allows a city or county levying a local property tax to fund affordable housing for very low-income households to expand the use of this money to fund affordable home ownership, owner-occupied home repair, and foreclosure prevention programs for low- income households.

  • “Very low-income household” means a single person, family, or unrelated persons living together with income of 50% or less of the county’s median household income.
  • “Low-income household” means a single person, family, or unrelated persons living together with income of 80% or less of the county’s median household income.
2SSB 6231 - Providing a limited property tax exemption for the construction of accessory dwelling units
  • Expands the property tax exemption for improvements to single-family dwellings to include the construction of accessory dwelling units as a qualifying improvement beginning with taxes levied for collection in 2021.
  • Requires the Department to work with county assessors to review and evaluate the exemption and report its findings to the Legislature by November 15, 2020. The report must:
    • Include an analysis of property types, locations, types of communities, and value of exempt improvements by geographic area.
    • Address the effectiveness of the exemption in encouraging homeowners to upgrade their residences.
SSB 6319 - Concerning administration of the senior property tax exemption program

This bill amends the property tax exemption for qualifying senior citizens, individuals with disabilities, and veterans as follows:

  • Instructs the Department to round up to the nearest $1,000 when calculating income thresholds.
  • Requires that claims for exemption must be signed under oath.
  • Changes the definition of “principal place of residence” to mean a residence that is occupied by the claimant for more than six months each calendar year, instead of nine months.
SSB 6415 - Allowing a permanent fire protection district benefit charge with voter approval

This bill provides fire protection districts and regional fire protection service authorities the additional options of imposing a permanent benefit charge to finance its activities with approval of at least 60% of the voters in the district, or continue to impose an existing benefit charge for 10 years with approval by a simple majority of voters in the district.