Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction.
RCW
82.32.808(7) explains that
the amount claimed by a taxpayer for any new tax preference is subject to
public disclosure, with certain limitations. Under certain circumstances, the
department may waive this public disclosure requirement for those new tax
preferences specifically provided in chapter 13, Laws of 2013 2nd sp.
sess.
(2)
Definitions.
(a)
"New tax preference" means a
"tax preference" as defined in (b) of this subsection that initially takes
effect after August 1, 2013, or a tax preference in effect as of August 1,
2013, that is expanded or extended after August 1, 2013, even if the expanding
or extending amendment includes any other change to the tax
preference.
(b)
"Tax
preference" means, with respect to any state tax administered by the
department (except for the Washington estate and transfer tax in chapter 83.100
RCW and chapter 458-57 WAC), an exemption, exclusion, or deduction from the
base of a state tax; a credit against a state tax; a deferral of a state tax;
or a preferential state tax rate.
(3)
When will the department disclose
new tax preference amounts?
(a) New tax
preference amounts claimed by a taxpayer that do not require a survey under
RCW
82.32.585 are subject to public disclosure,
upon request, 24 months after the taxpayer first claimed the new tax preference
reportable under
RCW
82.32.808(6). Taxpayers
reporting a tax preference requiring a survey should refer to
RCW
82.32.585 and WAC
458-20-268 Annual surveys for
certain tax preferences, for those requirements.
(b) Any new tax preference, other than a tax
preference requiring a survey under
RCW
82.32.585, claimed by a taxpayer in a
calendar year for which the amount of the tax reduced or saved is less than
$10,000 is not subject to public disclosure.
(4)
When may the department waive
public disclosure of new tax preference amounts?
(a)
Good cause waiver.
RCW
82.32.808 (7)(b) provides
that the department may waive public disclosure of new tax preference amounts
for good cause. A waiver is available only for the following new tax
preferences:
(i) Paymaster services business
and occupation (B&O) tax deduction (RCW
82.04.43393);
(ii) Clay targets retail sales (RCW
82.08.205) and use (RCW
82.12.205) tax exemptions;
(iii) Food flavoring products retail sales
(RCW
82.08.210) and use (RCW
82.12.210) tax exemptions;
(iv) Cooperative finance organizations
B&O tax deduction in
RCW
82.04.4276;
(v) Investment data for investment firms
retail sales (RCW 82.08.207) and use
(RCW
82.12.207) tax exemptions;
(vi) Large private airplane retail sales
(RCW
82.08.215) and use (RCW
82.12.215) tax exemptions;
(vii) Blood banks B&O tax exemption
(RCW
82.04.324); and
(viii) Mint growers retail sales
(RCW
82.08.220) and use (RCW
82.12.220) tax exemptions.
(b)
What is good
cause? Good cause is demonstrated by a reasonable showing of economic
harm to a taxpayer if public disclosure of the new tax preference amount were
to occur. To make a reasonable showing of economic harm, the taxpayer must
provide facts that demonstrate that economic harm is likely to occur, and not
merely speculative or theoretical. Economic harm may include, but is not
limited to, a quantifiable financial loss such as decreased income, lost
profits, and diminished business value. It may also include a reduction in a
business's goodwill or an unfair competitive advantage to the taxpayer's
competitors if the tax preference information is released.
(5)
What is the process for applying
for the waiver?
(a) Taxpayers do not
need to request a waiver for a new tax preference for any calendar year for
which the amount of tax reduced or saved for that new tax preference is less
than $10,000. Such amounts are not subject to public disclosure as described in
subsection (3)(b) of this rule.
(b)
Taxpayers eligible to claim a waiver of disclosure under subsection (4) of this
rule may apply to the department at any time, but should note that any reported
new tax preference amount is no longer confidential 24 months after the tax
preference is first claimed as described in subsection (3)(a) of this
rule.
(c) To apply for the waiver,
the taxpayer must provide the department with a completed waiver request form
and include a detailed explanation describing how disclosure of the new tax
preference information will cause economic harm. The required waiver request
form can be found on the department's website at dor.wa.gov.
(d) Taxpayers who have their waiver requests
approved prior to the date of disclosure, as described in subsection (3)(a) of
this rule, will not have their new tax preference amount subject to public
disclosure.
(e) An approval by the
department to waive public disclosure of new tax preference information will
remain in effect indefinitely unless the department has reason to believe that
good cause no longer exists. If this occurs, the department will contact the
taxpayer for additional information prior to any public disclosure of new tax
preference information.
(6)
Denial of good cause waiver
request.
(a) Taxpayers who have their
waiver requests denied may submit additional documentation to the department to
support their eligibility for the waiver within 30 days of the postmark date of
the department's determination. Upon receiving the additional information from
the taxpayer, the department will conduct a second review and notify the
taxpayer whether good cause exists. If additional documentation is not
submitted, then the initial determination is considered the final
determination.
(b) A final
determination by the department to deny a waiver request is considered a final
agency action for purposes of review under
RCW
34.05.570(4) and may be
appealed to superior court as provided in
RCW
34.05.514.