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The Courthouse Journal is the official newsletter of the Washington Association of County Officials. Along with a newsletter to members, WACO also hosts the Courthouse Journal blog.

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Apr 01

Property Tax Payment Extension and Penalties

Posted on April 1, 2020 at 1:42 PM by Timothy Grisham

Question: Does the Governor’s proclamation under RCW 43.06.220 supersede RCW 84.56.020 (10), which provides the ability for county treasurers to grant extensions of property tax due dates for taxes paid when the Governor has declared a state of emergency under RCW 43.06.010(12)?

 

Response: The Department does not have authority to administer Chapter 43.06 RCW and this response simply represents our best sense of how the provisions may relate. RCW 84.56.020(10) provides County Treasurers with broad authority to extend dues date for property taxes as they deem proper when the Governor has declared an emergency under RCW 43.06.010(12). The Governor has declared such an emergency. Thus, unless prohibited otherwise, RCW 84.56.020(10) should allow Treasurers to extend due dates within their discretion. 

 

Assuming the Governor could and did issue a specific Proclamation extending due dates for property taxes under RCW 43.06.220(1)(h) and (2)(e), the Proclamation would waive, suspend, or prohibit certain statutory provisions while the Proclamation is in effect. Given the nature of the Governor’s authority, Treasurers would be prohibited from exercising any discretion that would violate the order during that period. Based on our understanding, it may not be possible for an Emergency Proclamation to waive only due dates for COVID-19 impacted persons, but the extension may need to be applied to all tax statements.  Therefore, if you have questions about potential impacts of a Proclamation under Chapter 43.06 RCW, you may want to contact your local prosecuting attorney.

 

Notes:  The statute clearly includes and I’ve added underlining, “During a state of emergency declared under RCW 43.06.010(12), the county treasurer, on his or her own motion or at the request of any taxpayer affected by the emergency, may grant extensions of the due date of any taxes payable under this section as the treasurer deems proper.”  I believe the affidavit is their request and I wouldn’t need to extend to all.  

 

Question: Under that same [statute] RCW 43.06.220(4) it says under Section 4 [the proclamation] may continue for no longer than thirty days. If the governor does such order, would it only be thirty days from Feb 29 or from what date would the clock start ticking?

 

Response: The answer to this question would appear to depend on the nature of the order. With respect to Governor’s Emergency Proclamation 20-20, by it terms was effective March 18, 2020, and thus applies prospectively for 30 days or until April 17. But it also expressly applies retroactively to the date the emergency was declared on February 29. The order also clarifies that waived amounts cannot be refunded if the amounts were paid prior to the effective date of the Proclamation to avoid gift of public fund issues. RCW 43.06.220 (4) addresses extending a Governor’s Proclamation under Subsection 2 of the same statute.

 

Notes:  The state of emergency has been established.  The impact from the emergency could last beyond the dates of the state of emergency.  The state of emergency will likely last beyond April 30.  Affidavits will be addressing taxes due during the state of emergency.  We will not refund anything, and we may need to add that to the affidavit if we need to do this again in October.  Something like, “No payments prior to ___date____ made to the treasurer that include interest or penalty will be refunded.” We will likely receive affidavits after April 30, and I believe the terms of the affidavit are sufficient.

 

Question/Statement:  The Governor also has the authority in 43.06.220 which is a broad authority of “taxes”. 

Response:   It is our understanding that the Governor has authority waive penalties and due dates for taxes under RCW 43.06.220(2)(e). To obtain an answer regarding the authority granted by RCW 43.06.220, you should contact your local prosecuting attorney.

 

Additional Information as it relates to extending due dates

Interest:  RCW 84.56.020(5) imposes interest if the taxes are “delinquent”:

[D]elinquent taxes under this section are subject to interest at the rate of twelve percent per annum computed on a monthly basis on the amount of tax delinquent from the date of delinquency until paid. Interest must be calculated at the rate in effect at the time of the tax payment, regardless of when the taxes were first delinquent. (emphasis added)

 

Subsection (5) clearly provides that interest is not charged until the taxes are delinquent, and interest continues to accrue until the taxes are paid.

 

If the due date is extended, the tax is not delinquent and, therefore, interest should not accrue until after the extended due date.

 

Penalties: Because the statute provides specific dates upon which penalties must accrue on delinquent taxes, and RCW 84.56.020(10) does not provide authority for the County Treasurers to modify the penalty accrual date, the county must adhere to the accrual dates that are provided in statute. For example:

·         If the due date is extended to May 31st (or any date prior to June 1) the 3% delinquency penalty will accrue on any delinquent balance for the current tax year on June 1st.

·         If the due date is extended beyond June 1st, then there is no delinquent tax balance for the current tax year on June 1st, and the 3% penalty will not accrue.

o   Under this scenario, only interest will accrue on the delinquent balance, and a delinquency penalty will not accrue until December 1st.

 

These results are due to the fact that the treasurer does not have authority to move the penalty accrual dates, and penalties can only accrue on delinquent tax balances. If there are no delinquent taxes for the current tax year on the penalty accrual date, then no penalties will accrue.

 

Notes:  We are not extending the due date past June 1 when penalties apply.  We are waiving interest and penalties if they comply with the terms.  If they don’t comply (pay in full by the new due date), then the penalties and interest calculate on the amount not paid (remainder of 1st half and all of second half per RCW 84.56.020) on May 1 and June 1.  I believe our approach with the affidavit to waive per terms complies.  Pay specific attention to (c).

(5) Except as provided in (c) of this subsection, delinquent taxes under this section are subject to interest at the rate of twelve percent per annum computed on a monthly basis on the amount of tax delinquent from the date of delinquency until paid. Interest must be calculated at the rate in effect at the time of the tax payment, regardless of when the taxes were first delinquent. In addition, delinquent taxes under this section are subject to penalties as follows:

(a) A penalty of three percent of the amount of tax delinquent is assessed on the tax delinquent on June 1st of the year in which the tax is due.

(b) An additional penalty of eight percent is assessed on the delinquent tax amount on December 1st of the year in which the tax is due.

(c) If a taxpayer is successfully participating in a payment agreement under subsection (12)(b) of this section or a partial payment program pursuant to subsection (13) of this section, the county treasurer may not assess additional penalties on delinquent taxes that are included within the payment agreement. Interest and penalties that have been assessed prior to the payment agreement remain due and payable as provided in the payment agreement.