AGO Opinion Topics: TAXATION

1.  A county may use the local option sales and use tax authorized under RCW 82.14.370 for any of the following purposes if the activity in question relates to a public facility as defined in the statute: capital facilities costs, including acquisition, construction, rehabilitation, alteration, expansion, or improvements of public facilities; costs of development and improvement for the public facilities; project-specific environmental costs; land use and permitting costs; costs of site planning and analysis; project design, including feasibility and marketing studies and plans, and debt and revenue impact analysis.

1.  Article 7 of the Washington State Constitution does not require that property subject to ad valorem property tax be assessed at 100 per cent of true and fair value.    2.  The State Constitution imposes three requirements on the assessment of property subject to ad valorem property tax:  (1) any tax must be uniform, as to any class of property within the territorial limits of the authority levying the tax; (2) the valuation system must be administered in a systematic, non-discriminatory manner; and, (3) the aggregate of all taxes levied upon real and personal property by the state and all taxing districts must not, in any year, exceed one per cent of true and fair value of each property.

The provisions of RCW 84.36.171-84.36.174, relating to the "free port" exemption from property taxation, do not permit the exemption to be obtained through use of a formula whereby the total volume of tax exempt in-transit property would be regarded to be a certain percentage of the taxpayer's total year-end inventory which percentage would be computed by multiplying the percentage of total purchases which were received by the taxpayer from out-of-state sources during the year by the percentage of total sales which were shipped by him to out-of-state purchasers during the same year.

1. When county timber excise tax revenues received during the third and fourth quarters of a year are insufficient to fully satisfy the first and second priorities for revenue distribution under RCW 84.33.081(2) and (4), distributions made to lower-priority districts during the first and second quarters of that year may not be taken back and redistributed to first- or second-priority districts.
2. School district property tax rates may not be adjusted during a tax year when timber excise tax revenues fall short of projections used in calculating the tax rate and levying property taxes for the year.

RCW 82.20.010 which imposes a tax upon certain conveyances does not apply to declarations of forfeiture recorded pursuant to chapter 61.30 RCW.

1. A local taxing district other than a school district may use
   timber tax revenues distributed under RCW 84.33.081(2) only to pay debt
   services related to capital bonds authorized under RCW 84.52.056. 
2. RCW 84.33.081(2) does not specify the manner in which a taxing district applies timber tax revenues to the debt service. 
3. In the year in which a taxing district fully pays off its capital
   bonds issued pursuant to RCW 84.52.056, its use of timber tax revenue
   distributed pursuant to RCW 84.33.081(2) is not restricted to any
   particular purpose.

Because of the provisions of Article VIII, §§ 5 and 7 of the Washington constitution, any legislation proposing to exempt designated classes of property from 1975 property tax levies collectible in 1976 must be enacted before any such taxes have been collected.

In computing the combined income of the head of a household and his spouse, for purposes of determining eligibility for the real property tax exemption provided for by chapter 168, Laws of 1965, Ex. Sess., the following, except to the extent that they represent a return of capital or investment, are to be included: Social security benefits; railroad retirement benefits; teachers' retirement allowances; state, municipal and county employee retirement benefits; and private company pensions.

(1) The conveyance by a national bank of certain of its banking premises constitutes a "sale" within the meaning of RCW 28A.45.010 under the following circumstances:  (a) the purpose for the conveyance is compliance with a directive from the Comptroller of the Currency pursuant to 12 U.S.C.371d; (b) simultaneously with the conveyance the new owner of the property leases it back to the bank under a lease agreement which allows the bank to repurchase the premises at any time during the term of the lease; and (c) the bank is required, under the same lease agreement, to repurchase the premises in any event upon expiration of the term of the lease.  (2) Under these same circumstances, the agreement for a lease‑back with option to purchase is also a "sale" within the meaning of RCW 28A.45.010.

(1) In determining the "true and fair value" of beer which is still in storage in the brewer's warehouse, the federal excise tax on beer is not to be regarded as an element of its value. (2) The exemption from ad valorem property taxation of ore or metal shipped from out the state to any smelter or refining works within the state, while in process of reduction or refinement and for thirty days thereafter, which is provided for by RCW 84.36.181, extends to alumina on the basis that this substance is an ore. (3) Barley malt which is stored in the elevators of a malting business is not exempt from taxation as "grain or flour" within the meaning of RCW 84.36.140.