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Bob Ferguson

AGO 1969 No. 11 - Jun 11 1969
Attorney General Slade Gorton


The interest rate of 10% per annum which is provided for by § 3, chapter 216, Laws of 1969, Ex. Sess., with respect to the collection of delinquent real and personal property tax is applicable to property taxes which had become delinquent prior to the effective date of the 1969 act but which are tendered for payment on or after that date.

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                                                                   June 11, 1969

Honorable Ronald L. Hendry
Prosecuting Attorney
Pierce County
946 County-City Building
Tacoma, Washington 98402

                                                                                                                 Cite as:  AGO 1969 No. 11

Dear Sir:

            By letter previously acknowledged, you have requested an opinion of this office on the application of § 3, chapter 216, Laws of 1969, Ex. Sess.  By this act, which became effective on May 8, 1969, when signed into law by the governor, the legislature amended RCW 84.56.020, relating to the collection of property taxes, so as to cause it to read, in material part, as follows:

            ". . . All taxes upon real and personal property made payable by the provisions of this title shall be due and payable to the treasurer as aforesaid on or before the thirtieth day of April in each year, after which date they shall become delinquent, and interest at the rate of ((eight)) ten percent per annum shall be charged upon such unpaid taxes from the date of delinquency until paid: . . ."

            Your question is whether the ten percent interest rate provided for by the amendment is applicable to property taxes which had become delinquent prior to its effective date but  [[Orig. Op. Page 2]] are tendered for payment on or after that date.

            We answer in the affirmative for the reasons set forth in our analysis.


            In an opinion dated January 23, 1950, to a previous prosecuting attorney of Pierce county, copy enclosed, we said:

            "It is a well established proposition that interest charged for nonpayment of taxes is not a part of the tax, but is only a method provided for the collection thereof.  Henry v. McKay, 164 Wash. 526, 3 P.2d 145; 51 Am.Jur. 848, Taxation Section 970.  In consequence, interest is computed at time of payment of the tax, and not before.  Henry v. McKay, supra, p. 532. . . ."

            We believe that this prior opinion is determinative of your question.  While it is true that in that instance, the amendatory legislation had decreased the interest penalty rate rather than, as here, increasing it, the legislation had also changed the time for payment of taxes so as to cause taxes which were unpaid on the effective date of the act to have been delinquent for a longer period than under the prior law.  Because of this, we noted that, in net effect,

            ". . . the total interest charge may be greater or lesser when the 1949 amendment is applied, depending upon the particular facts of the case."

            We then went on to say:

            "However, no constitutional right is violated by the imposition of a greater interest charge by subsequent statutory enactments.  Authorities cited in theHenry case, including that from the Supreme Court of the United States, supports this last stated proposition and no further discussion appears necessary.  See alsoIn re Nogleberg's Estate, 200 Wash. 652, 94 P.2d 488; Annotation, 4 A.L.R.2d 954."

             [[Orig. Op. Page 3]]

            In further elaboration on this constitutional issue, we believe it appropriate to note that the Washington court, in Henry v. McKay, 164 Wash. 526, 3 P.2d 145 (1931) (which also dealt with a reduction in the interest penalty rate rather than, as here, an increase), made mention of the United States Supreme Court case ofLeague v. Texas, 184 U.S. 156, 46 L.Ed. 478, 22 S.Ct. 475 (1902).  In theLeague case, one of the issues before the court was the constitutionality of a statute requiring the payment of interest on taxes already delinquent from the time such delinquencies commenced.  The supreme court upheld the statute, saying:

            "That a State may adopt new remedies for the collection of taxes and apply those remedies to taxes already delinquent, without any violation of the Federal Constitution, is not a matter of doubt.  A delinquent taxpayer has no vested right in an existing mode of collecting taxes.  There is no contract between him and the State that the latter will not vary the mode of collection.  Indeed, generally speaking, a party has no vested right in a mere matter of remedy; that is subject to legislative change.  And a new remedy may be resorted to unless in some of its special provisions a constitutional right of the debtor or obligor is infringed. . . ." (p. 158.)

            The court further stated:

            "As the State may, in the first instance, enact that taxes shall bear interest from the time they become due, so, without conflicting with any provision of the Federal Constitution, it may in like manner provide that taxes which have become delinquent shall bear interest from the time the delinquency commenced. . . ."  (pp. 161-162.)

            Based upon this case, the Washington court, in Henry v. McKay, supra, characterized the interest penalty on delinquent property taxes as merely a remedy to aid in their collection and from this it reached the result noted at the outset of this opinion; namely, that interest on delinquent taxes is to be computed on the basis of the law in effect when tender is made.

             [[Orig. Op. Page 4]]

            In theHenry case, the court also discussed and approved of the Michigan case ofWebster v. Auditor General, 121 Mich. 668, 80 N.W. 705 (1899), which had involved a statutory amendment like the one presently before us which hadincreased the penalty interest rate on delinquent taxes there, from eight percent per annum to one percent per month.  As indicated in the excerpts from its opinion which are quoted in Henry v. McKay, supra, at pp. 537-9, the Michigan court held the increased rate to be applicable to taxes already delinquent on the effective date of the amendatory act.

            We conclude, therefore, that the interest rate of ten percent per annum, as provided for by § 3, chapter 216, Laws of 1969, Ex. Sess., supra, is applicable to all delinquent taxes tendered for payment on or after May 8, 1969.

            We trust that the foregoing will be of assistance to you.

Very truly yours,

Attorney General

Assistant Attorney General