Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGLO 1973 No. 92 -
Attorney General Slade Gorton

The legislature may enact property tax exemptions in such a manner so as to cause those exemptions to apply to taxes levied but not yet collected; taxpayers affected by such legislation whose property is nevertheless placed upon the tax rolls may have their property removed from the rolls under RCW 84.36.400.
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                                                               September 7, 1973

Honorable Martin J. Durkan
Honorable Harry B. Lewis
Senate Committee on Ways and Means
Legislative Building
Olympia, Washington 98504
                                                                                                               Cite as:  AGLO 1973 No. 92
            By recent letter you have requested an opinion of this office on two questions which we paraphrase as follows:
            (1) If the legislature, at its upcoming special session in September, passes legislation exempting certain properties from taxation, may it make those exemptions applicable to 1973 levies for taxes due and payable during the calendar year 1974 where the subject properties have already been placed upon the 1973 tax rolls earlier during 1973?
            (2) If the foregoing question is answered in the affirmative, what remedies are available under existing law for taxpayers who, during 1974, receive tax statements covering properties which qualify for exemption under such legislation?
            We answer question (1) in the affirmative and question (2) in the manner set forth herein.
            By way of background you have made reference in your letter to the recent case of Yakima First Baptist Homes, Inc. v. Gray, 82 Wn.2d 295, 510 P.2d 243 (1973).  In this case the Washington Supreme Court held that a certain retirement home did not qualify for tax exempt status under the following provisions of RCW 84.36.040:
            "The following property shall be exempt from taxation:  All free public libraries, orphanages, orphan asylums, institutions for the reformation of fallen women, homes for the aged and infirm, and hospitals for the care of the sick, when such institutions are supported in whole or in part by public donations or private charity, and all of the income and profits thereof are devoted, after paying the expenses thereof, to the purposes of such institutions; and the  [[Orig. Op. Page 2]] grounds, together with all real and personal property owned or used as a part of such institutions, whenever such libraries, orphanages, institutions, homes, and hospitals are built and used exclusively for the purposes herein enumerated."
            You have suggested the possibility of certain amendments to this statute which would be designed to "define and clarify the intention of the legislature" regarding the tax exemptions specified therein.
            Question (1):
            You have first asked whether the legislature may, at its currently scheduled September, 1973, special session, enact such legislation in a manner which will cause any expanded tax exemptions granted thereby to apply with respect to real property taxes levied in 1973 for collection in 1974.1/   We answer in the affirmative based upon the decision of the Washington court in Snow's Mobile Homes, Inc. v. Morgan, 80 Wn.2d 283, 494 P.2d 216 (1972).
            In this recent case the court held that irrespective of when an obligation to pay property taxes may be said to arise ‑ i.e., at the time of closing of the assessment rolls, at the time of the levy, or at the time of the spreading of the tax upon the rolls by the assessor ‑ the legislature has the authority to extinguish that obligation; accord, Gasaway v. Seattle, 52 Wash. 444, 100 Pac. 991 (1909), from which the court in Snow's quoted with approval as follows:
            "All taxes are levied under the express or implied power of the state.  The state can fix the subject of taxation and exempt property.  It can limit or extend the time of payment.  The authority so delegated, when exercised, is none the less the execution of the state's power.  If it can do all  [[Orig. Op. Page 3]] these things, it can take away not only the power to tax but the subjects of taxation as well.  No person or municipality can acquire, as against the state, a vested right to taxes, or the right to insist upon the collection of taxes when levied."
            But see, and contrast, the case of Yakima v. Huza, 67 Wn.2d 351, 407 P.2d 815 (1965), in which the court held that it would be an unconstitutional violation of Article VIII, § 7 of the state Constitution prohibiting gifts of municipal funds for a municipality to refund taxes already legally collected ‑ based upon a repeal of the ordinance under which they were initially imposed.
            Accordingly, so long as a legislative intent is sufficiently expressed to make the tax exemption amendments contemplated by your letter effective with respect to taxes levied in 1973 for collection in 1974, and this legislation itself becomes effective before these taxes are collected, we have no doubt that such legislation would be constitutional and productive of the result intended.2/
            Question (2):
            Assuming the foregoing affirmative answer to your first question you have next asked whether affected taxpayers owning properties subject to the broadened tax exemption will have any statutory remedies under existing law which would enable them to rectify the situation in a case where tax statements for the exempt properties are, nevertheless, received by them during 1974.  We believe that the answer to this question is to be found in RCW 84.56.400, which reads, in material part, as follows:
            "The county treasurer shall also make and file with the county board of equalization a record, setting forth the facts  [[Orig. Op. Page 4]] relating to such manifest errors in description, double assessments, clerical errors in extending the rolls, and such manifest errors in the listing of property which do not involve a revaluation of property, such as the assessment of property exempted by law from taxation or the failure to deduct the exemption allowed by law to the head of a family, as shall come to his attention after the rolls have been turned over to him for collection.  The said record shall also set forth by legal description all property belonging exclusively to the state, any county or any municipal corporation whose property is exempt from taxation, upon which there remains, according to the tax roll, any unpaid taxes."  (Emphasis supplied.)
            This statutory provision by its own terms has application to situations coming to the attention of a county treasurer after the annual assessment rolls have been turned over to him ‑ an occurrence which takes place after the levy has been made and before collection of the taxes.  See, RCW 84.56.010.  Thus the tax rolls for 1973 levies collectible in 1974, which have not yet gone to the treasurer, are to be reviewed by him when received and then are to be the objects of corrective action by the appropriate county board of equalization at its June, 1974, session.
            The statute (RCW 84.56.400, supra) then goes on to provide that it is among the functions of a county board of equalization, during its June meeting, to "correct such matters as appear in the record filed with it by the county treasurer."  Thus, the appropriate remedy for such an affected taxpayer as is visualized by your second question would be that of bringing the situation to the attention of his county treasurer promptly upon receipt of his 1974 tax statement so as to enable the case then to be presented to the board of equalization for a cancellation of the assessment as therein provided for.  If, however, he fails to do this his only remaining remedy will be that of payment of the tax under protest followed by a suit for refund pursuant to chapter 84.68 RCW.
             [[Orig. Op. Page 5]]
            This concludes our response to the questions you have asked.  We trust we have been of assistance to you.
Very truly yours,
Attorney General
Assistant Attorney General
                                                         ***   FOOTNOTES   ***
1/See, chapters 84.52 and 84.56 RCW, respectively, with regard to (a) the levying and (b) the collection of property taxes in this state.
2/In the Snow's Mobile Homes, Inc. case a considerable portion of the court's opinion was devoted not to the constitutionality of a cut off of existing tax liabilities but to whether such a result was actually intended.  In view of the court's statement in this case that more "lucid language" could have been used to express this intent than that merely of a standard "emergency" clause we would be happy to confer with you in the context of a specific bill in order to assist you in the preparation of appropriate language to express your true intent in the instant situation.