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April 24, 1970
Honorable Willard A. Zellmer
Davenport, Washington 99122
Cite as: AGLO 1970 No. 67
We acknowledge receipt of your letter dated April 15, 1970, regarding the taxability of wheat stored for more than one year when such wheat is covered by a commodity credit corporation loan.
In your letter you have cited RCW 84.44.060 as covering the situation at hand. This statute provides as follows:
"When the owner of livestock or other personal property connected with a farm does not reside thereon, the property shall be listed and assessed in the county or place where the farm is situated; if not listed in said county, then to be taxed where found. All agricultural and horticultural products other than forest products, livestock and fowls, ownership of which remains in the original producer thereof on the first day of January next succeeding the harvesting thereof shall be exempt from assessment for taxation for the said year." (Emphasis supplied.)
You have indicated that from your examination of the various forms used by the commodity credit corporation in connection with its loans covering the subject wheat, it appears to you that the ownership thereof remains in the original producer; i.e., that ownership of this agricultural product is not affected by the financing relationship between the producer and the commodity credit corporation. Based upon this analysis of the matter, you have formed the opinion that once the time period for tax exemption which is specified in RCW 84.44.060, has elapsed, the wheat in question should be removed from tax exempt status and placed on the tax rolls without regard to any extension on the period of the commodity credit corporation loan under which the wheat is covered.
[[Orig. Op. Page 2]]
We can see no basis for disagreeing with this conclusion which you have reached. Manifestly, RCW 84.44.060 must be interpreted in the light of the well-established principle pertaining to tax exemptions, generally ‑ which is that such exemptions are to be strictly construed in favor of the public and the right to tax. See, Thurston County v. Sisters of Charity, 14 Wash. 264, 44 Pac. 252 (1896); Spokane County v. Spokane, 169 Wash. 355, 13 P.2d 1084 (1932); The Norwegian Lutheran Church v. Wooster, 176 Wash. 581, 30 P.2d 381 (1934); Boeing Aircraft Co. v. R. F. C., 25 Wn.2d 652, 171 P.2d 838 (1946). Therefore, in the absence of any express provision in RCW 84.44.060 (or in any other statute we have discovered) providing for an extension of the period of tax exemption of an agricultural product in consequence of the financing plan under which it is covered, it must be concluded that no such an extension of this particular tax exemption has been provided for by the legislature.
The foregoing fully disposes of the precise question which you have asked; namely, the correctness of your interpretation of the scope and effect of the tax exemption provided for in RCW 84.44.060, supra. However, before closing, we would be somewhat remiss if we did not call to your attention, as being possibly applicable to the sort of situation with which you are concerned, the tax exemption for certain intransit agricultural products which is provided for under RCW 84.36.140 ‑ 84.36.162. See, AGO 65-66 No. 27 [[to Prosecuting Attorney, Whitman County on July 1, 1965]], copy enclosed, for a discussion of this statutory exemption, which is specifically spelled out in RCW 84.36.140, as follows:
"All grains and flour, fruit and fruit products, vegetables and vegetable products, and fish and fish products, while being transported to or held in storage in a public or private warehouse shall be exempt from taxation if actually shipped to points outside the state on or before April 30th of the first year for which they would otherwise be taxable: Provided, That proof of shipment be furnished as required in RCW 84.36.150." (Emphasis supplied.)
Presumably, the first year in which wheat which was initially tax exempt under RCW 84.44.060, supra, ". . . [[Orig. Op. Page 3]] would otherwise be taxable" would be the year following the year of its exempt status pursuant to said RCW 84.44.060.
It is hoped that the foregoing will be of assistance to you.
Very truly yours,
FOR THE ATTORNEY GENERAL
Philip H. Austin
Assistant Attorney General