SIGNIFICANT EVENTS IN THE HISTORY OF PROPERTY TAX IN WASHINGTON STATE
1853 – Territorial government established; all taxes to be assessed uniformly;
exemption for property of the United States, churches and benevolent
institutions.
1889 – State Constitution adopted -- property to be assessed uniformly.
Legislature may grant exemptions.
1929 – 14th Amendment to state constitution: classification of property allowed.
All real estate is one class; taxes to be uniform on the same class of property.
1935 – Revenue Act exempted all household goods and personal effects.
1944 – 17th Amendment to state constitution: added 40 mill limits. Property to
be assessed at 50% of true and fair value.
1955 – Property revaluation cycle established -- 4 year interval.
1965 – 47th Amendment to the state constitution allows senior citizen exemption.
1967 – Senior citizens exempt from first $50.00 of real property tax. Barlow v.
Kinnear provided the state with assessment equalization power.
1968 – Current use assessment provided for open space, timber and agricultural
lands.
1969 – State revaluation plan instituted to realize the 1955 revaluation act.
Carkonen v. Williams mandated a 50% ratio of assessed to market value.
1971 – $50.00 senior citizen exemption replaced by varying exemption from
special levies depending on income. Annual increase in regular levies of taxing
districts limited to 106% of the largest prior levy. Annual update of values
permitted.
1972 – Home improvement exemption created. Constitutional limit of 1% of
market value enacted for all regular levies.
1973 – Assessment level increased from 50% to 100% of true and fair value, for
1975 taxes.
1974 – Ten year phase-out of property tax on inventories authorized
1975 – 100% assessment ratio implemented. Statutory rate limit reduced to
$9.15 per $1,000 assessed value. Deferral of property taxes and special
assessments allowed for senior citizens with income of less than $8,000.
1976 – 64th Amendment to state constitution permits school districts to seek
voter approval of two year special levies.
1978 – Seattle School District v. State requires full state funding of K-12
education.
1979 – State levy for common school support subject to 106% limitation.
1981 – Interest rate on delinquent property taxes increased from 8% to 12%.
New penalty of 11% for first year delinquencies.
1982 – Physical inspection may take six years, if values updated annually.
1983 – Business inventories eliminated from property tax and assessment rolls,
effective in 1983 for 1984 collections.
1984 – Legal requirements for payment of penalties and interest on delinquent
taxes relaxed. Senior Citizen Exemption qualifications revised.
1985 – Provision made for special valuation of eligible historic property. Benefit
rating system authorized.
1986 – Limited waiver of the 106% limit may be placed before the voters. Levies
for school capital purposes may be made for up to 6 years with voter approval.
1987 – Interest rates on property tax refunds increased.
1988 – New construction valuation date of July 31 upheld. State school levy
removed from $9.15/$1,000 limitation for proration purposes. Local appeal date
set at July 1. Personal property affidavit filing deadline set at April 30.
1989 – Business personal property exemption raised to $3,000. Deadline
changed for determining boundaries of newly incorporated cities. Washington
Condominium Act passed.
1990 – Regular levy limitation of $5.55/1,000 of assessed valuation increased to
$5.90/1,000 and proration procedures modified. Personal property equalized
based on assessment level of preceding year.
1992 – Appellants may appeal directly to State Board of Tax Appeals, bypassing
local appeals board. Manifest errors no longer reviewed by the county Board.
Assessor may stipulate to value of appealed property with concurrence of
appellant. Four-year renewal required for Senior Citizen exemption.
1993 – Voter-approved regular levy for low-income housing authorized for cities
and counties (above statutory and $5.90 limits).
1994 –Tax bill required to show percent of voted and non-voted tax. Certain
deadlines for providing information in valuation appeals altered.
1995 – Senior citizen income limit raised; values frozen as of 1/1/95. Deferral
income, age and parcel size limits changed. New exemption created for multi-
unit dwellings in designated urban centers.
1996 – Revaluations out-of-cycle and error corrections allowed for value-affecting
changes in land use restrictions.
1997 - All intangible personal property made tax-exempt. Appeals allowed up to
60 days after notification of value change. Referendum 47 imposes additional
requirements on the 106% limit.
1998 – The value averaging portion of Referendum 47 is ruled unconstitutional
by the Washington State Supreme Court. Senior exemption eligibility and
benefits were liberalized.
SIGNIFICANT EVENTS IN THE HISTORY OF PROPERTY TAX IN WASHINGTON STATE
2000 – I-722 passed in November mandating a roll back of assessed values to
January 1, 1999 levels and limiting future increases of taxable value to 2% per
year. It also limited taxing district non-voted property tax increases to 2%, and
rolled back certain property tax increases levied for 2000. The initiative was not
implemented because the Washington State Supreme Court unanimously ruled it
unconstitutional on September 20, 2001.
2001 – I-747 passed in November which restricts taxing districts to a 1%
monetary aggregate increase over their prior highest lawful levy. Effective for the
2002 tax year.
2002 – Annexations by petition ruled unconstitutional in March 2002 by the State
Supreme Court. The basic method by which cities may annex territory is now by
election – by approval of the voters in the area proposed for annexation.
2004 – Senior citizen and disabled income limits raised; allowable expenses for
seniors/disabled includes adult family care facilities and boarding homes; allows
Medicare part B insurance premiums as a deduction against taxable/non-taxable
income. Mental as well as physical disability included in program. Timber
assessed values include publicly as well as privately owned forest land.
2005 – Effective 7/24/05, veterans with 100% service connected disabilities are
included in the Senior/Disabled Exemption Program. Certification of budgets to
the county legislative authority changed from November 15 to November 30.
Veterans’ assistance program to benefit indigent veterans and their families
established. Effective 7/24/05 a 10-year special tax exemption for nightclubs that
install a sprinkler system. Exemptions for widows/widowers of honorably
discharged veterans over and above the existing senior/disabled exemption
became effective for the 2006 tax year. An increase in the maximum benefit
assessment charge for conservation districts from $5 to $10 in counties greater
than 1.5 million in population became effective for the 2006 tax year. Fire
protection district can impose up to a total of 25 cents of its property tax levy
outside of the $5.90 aggregate limit on regular levies if the district’s levy would be
otherwise prorated. Personal property tax exemption repealed for farm
machinery used in burning effective for the 2007 tax year.
2006 – Establishment of Regional Fire Protection Service Authorities for
participating jurisdictions to provide adequate private ambulance services. A
financial plan must contain the property tax and/or benefit charge proposed by a
regional fire protection service authority and requires 60 percent voter approval
for the tax and benefit charge. Property Tax Deferral Program: bill changes the
interest rate on payback of taxes from eight percent to five percent when senior
citizens, retired persons, and veterans with 100% service connection disability
with disposable incomes of $40,000 or less have deferred property taxes and
special benefit assessments imposed on their residence. The reduced rate will
apply to taxes and special assessments deferred after January 1, 2007. Local
Infrastructure Financing Tool (LIFT): Investments in pubic infrastructure to
promote community and economic development by creating a revenue allocation
of local excise tax and local property tax (use of new construction dollars),
effective July 1, 2006 and expiring June 30, 2039. Personal Property Head of
Family Tax Exemption: Amendment of the Washington State Constitution to
change the exemption from $3,000 to $15,000 for a head of family who owns,
operates, and is a sole proprietor of a business that meets certain qualifications,
effective January 1, 2007. Property Tax Exemptions and Deferrals for Senior
Citizens and Persons Retired for Reasons of Disability: Increases the one- acre
limitation on residence size ‘up to’ five acres if the larger parcel size is what is
required by local zoning for the Senior Citizen and Disabled personal Exemption
Program and the Widows/Widowers of Veterans Property Tax Assistance
Program.
2007 – Modified forest fire protection flat fee assessment from $14.50 to $17.50
per parcel, and the assessment on excess acreage increased from 25 cents to
27 cents on each acre exceeding 50 acres. Lid lifts: allows all taxing districts to
impose a lid lift in which the levy may exceed the 101% limitation in each of up to
6 consecutive years. This bill extends the authority to all taxing districts, not just
counties, cities and towns whom have had the ability to exceed that limit since
2003. Taxing district boundaries: The date for the establishment of taxing
district boundaries changed from March 1 to August 1 of the year in which the
property tax levy is made. New provisions have been established related to the
disposition of taxes levied on property within fire or library districts that have been
annexed to a city or town. Also, new city and town notification requirements
pertaining to annexation of property within a fire or library district are established.
School District Capital Project Funds for Technology: School Districts are
allowed to impose 2-year through 6-year levies to fund costs associated with the
application and modernization of technology systems. These levies are in
addition to other maintenance and operation levies imposed by the school district
and are not subject to the limitation founding RCW 84.52.053.
2008 – RCW 84.55.050 – Levy lid lifts. Makes single year and multiple year lid
lifts temporary unless the ballot proposition approved by voters makes them
permanent. After the lid lift ends, subsequent levies will be computed as if the lid
lift had never occurred and the district had levied at the maximum rates allowed,
unless the ballot proposition states otherwise. RCW 84.09.030 requires newly
incorporated port districts and regional fire protection service authority districts to
have their boundaries established by October 1
st
if their boundaries are
coterminous with the boundaries of another taxing district or districts as they
existed the first day of August. If the boundaries for the newly incorporated port
district and regional fire protection service authority district are not coterminous
with another taxing district, then the boundaries must be established by August 1.
RCW 17.28.253 requires mosquito districts to have their boundaries established
by September 1
st
. SB 6950, Section 510 gives the county treasurers authority to
grant an extension for the due dates of any property tax payable under RCW
84.56.020, for taxes extended upon the tax rolls of the county, when a state of
emergency has been declared by the governor. E2SHB 3186 authorizes the
creation of beach management districts that are similar to lake management
districts. Beach management districts may be created by a county, city, or town
for the purpose of controlling and removing aquatic plants or vegetation. HB
1149 removed the requirement for an advance tax to be paid prior to the
recording of a binding site plan with the county auditor.
2009 – Property tax resulting from levy lid lifts can be used to supplant existing
funds beginning with levies submitted/approved by voters after July 26, 2009 in
counties with a population of less than 1.5 million. In counties with a population
of 1.5 million or more, property tax levy lid lift funds can be used to supplant
existing funds for levies approved by the voters after July 26, 2009 and through
SIGNIFICANT EVENTS IN THE HISTORY OF PROPERTY TAX IN WASHINGTON STATE
2011. The statutory maximum rate of county ferry districts was changed from
$0.75 to $0.075 per thousand dollars of assessed value in counties with a
population of 1.5 million or more. A new transit levy was created in counties with
a population of 1.5 million or more to expand transit capacity along State Route
520 and other transit-related purposes. The levy is subject to the levy limit in
RCW 84.55.010 after the first tax levy has been imposed and is subject to the
constitutional one percent limit and excluded from the $5.90 levy limitation.
2010 – A new community facility district may be formed to provide voluntary
financing for community facilities and local, sub regional and regional
infrastructure. The board of supervisors of such district may impose a special
assessment on the property. Regional Transit Authority (RTA) – when an area
outside of the RTA is annexed to a city or code city located within the boundaries
of an RTA, the annexed area is simultaneously included within the boundaries of
the RTA. Annexation indebtedness – all property located within the boundaries
of a city, partial city, or town annexing into a fire protection district and which is
subject to the excess levy by the city or town for the repayment of debt incurred
for fire protection related capital improvements that was incurred prior to the
annexation is exempt from voter-approved property taxes levied by the annexing
fire protection district for the repayment of indebtedness issued prior to the
effective date of the annexation. Fire protection districts may be authorized in
areas both inside and outside of cities and towns. Also a city or town adjacent to
a fire district may be annexed into such a fire district provided the population of
the city or town does not exceed 300,000. School districts may return to voters
after they have received voter approval for an M&O levy requesting additional
levy authority if the district’s levy base or maximum levy percentage has
increased since the initial levy. This law allows a school district to have multiple
M&O levies at one time.
2011 - A property owner has the right to appeal their property valuation even
though the value did not change if the property was within a revaluation area and
the taxpayer was not sent a notice of value change. The measure provides that a
county board of equalization must waive the appeal deadline, if a request is filed
within a reasonable time after the appeal deadline, if the taxpayer’s property was
in the current revaluation area, the property value did not change, the taxpayer
was not sent a notice, and the taxpayer did not file an appeal prior to July 1 of the
assessment year. The bill will take effect July 22, 2011, and will apply to property
taxes levied for collection in 2012 and thereafter.
A process has been provided for a fire protection jurisdiction to annex into an
adjacent regional fire protection service authority. The annexation must be
approved by a simple majority vote of the voters in the fire protection jurisdiction.
As the regional fire protection service authority sets the property tax levy rate, the
levy rate within the fire protection service authority annexed may change. The bill
is effective July 22, 2011.
Protection of the King County flood control zone district from a potential loss of
revenue due to proration of its levy should the aggregate local regular levy
exceed $5.90. The district was provided limited protection of the regular property
tax levy from proration in a county with a population of 775,000 or more and
whose boundaries are coextensive with the county. For those districts, $0.25 of
their regular property tax levy is outside of the $5.90 limit. The bill changes the
process for adjusting levies if the combined levy exceeds the $5.90 limit for other
flood control district levies and junior taxing districts. The protected portion of the
levy of the flood control district is still within the one percent limit and would be
the first levy prorated if the aggregate of all levies exceeds the one percent limit.
The unprotected portion of the flood control district levy and levies of other flood
control zones would continue to be subject to proration. It is effective July 22,
2011, and applies to property taxes levied for collection in 2012 through 2017.
The bill expires January 1, 2018.
Legislation, for property tax purposes, makes technical changes to clarify the
eligibility requirements for veterans with a service connected disability to qualify
for the senior citizen and disabled person property tax exemption. Also corrected
are requirements for the assessor to notify persons receiving the senior
exemption from four to six years to coincide with the legislation passed in 2010.
Both changes go into effect on July 22, 2011.
Legislation has been provided for qualifying cities within King, Pierce, and
Snohomish Counties with a tax increment financing program to fund
infrastructure improvements. To qualify, cities must participate in a transfer of
development rights program and meet certain requirements. A portion of
incremental increases in regular property tax revenue of a sponsoring city and
the county in which the city resides as a result of new construction in a specified
area are used by the sponsoring city to fund the local public infrastructure
projects in that same area. Taxing districts other than the cities and counties are
not impacted. The bill also provides for the transfer of development rights from
rural land to cities to be used within the infrastructure project area.
A bill to allow families to farm or grow and harvest trees on contiguous properties
as a single operation and have the land value based on current use rather than
market value was passed by the Legislature. The bill expands the definition of
“same ownership” to include parcels owned by different people that are managed
as a single operation and owned by: (1) Members of the same family, as defined
in the bill; (2) Legal entities wholly owned by members of the same family; or (3)
An individual who owns at least one of the parcels and/or a legal entity or entities
that own the other parcel or parcels if the entity or entities are wholly owned by
that individual, members of his or her family, or that individual and members of
his or her family. The bill adds the definition of “contiguous” to the designated
forest land program. The bill is effective July 22, 2011.
A bill to clarify that the City of Milton or any fire district or other qualified district
that includes the City of Milton can impose an emergency medical service levy of
50 cents throughout the city despite the city being located in both King and
Pierce Counties was passed by the legislature. Additionally, the bill is intended to
ensure that the owners of property in the King County portion of the City of Milton
will not have to pay for two EMS levies that could result from the layering of the
King County EMS levy and a City of Milton (or fire district) levy. The bill provides
that, for purposes of imposing a medical emergency property tax levy, the
boundary of a county with a population greater than 1,500,000 does not include
the area located within a city that has a boundary in two counties. The locally
assessed value of all the property in the area of the city within the county with a
population greater than 1,500,000 must be less than $250,000,000.