Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction. This rule
outlines the withdrawal and removal procedures, events that trigger removal,
and how to calculate the additional tax, interest, and penalty that may be
imposed because land is withdrawn or removed from classification. When land is
withdrawn or removed, additional tax and interest are due. A twenty percent
penalty is also due when land is removed from classification.
RCW
84.34.108 and
84.34.070.
(2)
Other rules to reference.
Readers may want to refer to the following rules for additional information:
(a) WAC
458-30-295 Removal of
classification.
(b) WAC
458-30-305 Due date of additional
tax, interest, and penalty upon withdrawal or removal.
(c) WAC
458-30-325 Transfers between
classifications-Application for reclassification.
(3)
Definitions. For purposes of
this rule, the definitions in WAC
458-30-200 apply.
(4)
Duties of assessor and
treasurer. After determining the land no longer qualifies for
classification under chapter 84.34 RCW, the assessor must provide the owner a
written notice regarding this determination and of his or her intent to remove
the land from classification; e.g., the Notice of Intent to Remove Current Use
Classification form.
(a) The owner must
respond, in writing, to the assessor within thirty days of the postmark date of
the notice regarding his or her intention of removing the classified land.
Unless sufficient information or evidence is presented as to why the land
should not be removed from classified status, the land will be removed from
classification.
(b) Within thirty
days of removing land from classification, the assessor notifies the owner, in
writing, about the reason(s) for the removal; e.g., the Notice of Removal of
Current Use Classification and Additional Tax Calculation form. The assessor
will compute the amount of additional tax, interest, and penalty, unless the
removal is the result of one of the circumstances listed in subsection (7) of
this rule. The removal notice must explain the steps the owner needs to follow
if he or she wants to appeal the removal decision, including when a notice of
appeal must be filed, where an appeal petition may be obtained, and how to
contact the county board of equalization.
(c) Unless the removal is reversed on appeal,
the assessor revalues the affected land with reference to its true and fair
value as of January 1st of the year of removal from classification and places
the value on the assessment roll. The assessment roll lists both the assessed
value of the land before and after the removal from classification. Taxes for
the current tax year will be prorated to the portion of the year to which each
assessed value applies; that is, the current use value and the true and fair
value.
(d) The assessor computes
the amount of additional tax, interest, and penalty, unless the removal is the
result of one of the circumstances listed in subsection (7) of this
rule.
(e) The assessor notifies the
treasurer of the amount of additional tax, interest, and penalty due.
(f) The treasurer mails the owner written
notice about the amount of the additional tax, interest, and penalty due and
the date on which the total amount must be paid.
(g) The total amount is due and payable to
the treasurer thirty days after the owner is notified of the amount
due.
(5)
Amount of
additional tax, interest, and penalty. The amount of additional tax,
interest, and penalty will be determined as follows:
(a) The amount of additional tax is equal to
the difference between the property tax paid on the land because of its
classified status and the property tax that would have been paid on the land
based on its true and fair value for the seven tax years preceding the year of
withdrawal or removal, and the taxes owed for the balance of the current tax
year;
(b) The amount of interest,
calculated at the same statutory rate charged on delinquent property taxes
specified in
RCW
84.56.020, is based upon the amount of
additional tax determined under (a) of this subsection, starting from the date
the additional tax could have been paid without interest until the date the tax
is paid; and
(c) A penalty
amounting to twenty percent of the sum of the additional tax and interest. A
penalty is not imposed when the land has been classified for at least ten
assessment years at the time it is withdrawn from classification and the owner
submitted a request to withdraw classification to the assessor.
(d) If additional tax, interest, and penalty
are not imposed because the removal meets an exception in subsection (7) of
this rule, the assessor still calculates the prorated taxes from the date of
removal through December 31st of the year the removal occurred.
(e) When land is withdrawn or removed from
classification under chapter 84.34 RCW, the assessor must forward the notice of
withdrawal or removal to the county recording authority. The county recording
authority must record all notices of withdrawal or removal, and the owner is
required to pay all recording fees for the notice.
(6)
Failure to sign notice of
continuance. Land will be removed from current use classification if a
new owner fails to sign the notice of continuance when the classified land is
sold or transferred or if the new owner signs the notice of continuance and the
assessor determines the land does not continue to qualify in its
classification. Additional tax, interest, and penalty will be imposed in
accordance with
RCW
84.34.108(4) and become due
and payable by the seller or transferor at the time of sale or transfer.
A notice of continuance is not required when classified land is
transferred by a transfer on death deed or transferred to a new owner who is
the heir or devisee of a deceased owner and the new owner wishes to continue
classified use.
RCW
84.34.108(1)(c). If the new
owner elects not to continue classified use, the land will be removed from
classification and additional tax, interest, and penalty are due.
(7)
Exceptions. No
additional tax, interest, or penalty will be imposed if the withdrawal or
removal from classification resulted solely from any of the following:
(a) Transfer to a governmental entity in
exchange for other land located within the state of Washington;
(b) A taking through the exercise of the
power of eminent domain or the sale or transfer to an entity having the power
of eminent domain in anticipation of the exercise of this power. This entity
must have declared its intent to exercise the power of eminent domain in
writing or by some other official action;
(c) A natural disaster such as a flood,
windstorm, earthquake, wildfire, or other such calamity rather than an act of
the landowner changing the use of the property;
(d) Official action by an agency of the state
of Washington or by the county or city in which the land is located disallowing
the current use of classified land. For the purposes of this rule, "official
action" includes: City ordinances, zoning restrictions, Growth Management Act,
Shoreline Management Act, and Environmental Policy Act;
(e) Transfer of land to a church when the
land would qualify for a property tax exemption under
RCW
84.36.020. Only the land that would qualify
for exemption under
RCW
84.36.020 is included within this exception.
Additional tax, interest, and penalty will be assessed upon the remainder of
the land removed from classification;
(f) Acquisition of property interests by
public agencies or private organizations qualified under
RCW
84.34.210 or
64.04.130 for the conservation
purposes specified therein. Subsection (8) of this rule provides a listing of
these agencies, organizations, and purposes. However, when the land is no
longer used for one of the purposes described in
RCW
84.34.210 or
64.04.130, additional tax,
interest, and penalty will be imposed on the owner of the property at that
time;
(g) Removal of land granted
classification as farm and agricultural land under
RCW
84.34.020(2)(f) because the
principal residence of the farm operator or owner and/or housing for farm and
agricultural employees was situated on it. This exception applies only to the
land upon which the residence or housing is located even if this portion of the
land does not have a separate parcel number for assessment and tax
purposes;
(h) Removal of
classification after a statutory exemption is enacted that would exempt the
land from property tax and the landowner submits a written request to the
assessor to remove the land from classification. This exception applies only to
newly enacted exemptions that would cause classified land to go from taxable to
exempt status. For example, in 1999 the legislature created a new property tax
exemption for property used for agricultural research and education programs.
If the owner of such land subsequently requests removal of the land from
classification, no additional tax, interest or penalty are imposed because of
this new property tax exemption authorized by
RCW
84.36.570;
(i) The creation, sale, or transfer of
forestry riparian easements under
RCW
76.13.120;
(j) The creation, sale, or transfer of a
conservation easement of private forest lands within unconfined channel
migration zones or containing critical habitat for threatened or endangered
species under
RCW
76.09.040;
(k) The sale or transfer of land within two
years of the death of an owner who held at least a fifty percent interest in
the land if:
(i) The individual(s) or
entity(ies) who received the land from the deceased owner is selling or
transferring the land; and
(ii) The
land has been continuously assessed and valued as designated forest land under
chapter 84.33 RCW or classified under chapter 84.34 RCW since 1993. The date of
death shown on the death certificate begins the two-year period for sale or
transfer. For example, an owner who holds at least a fifty percent interest in
classified farm and agricultural land dies on March 1, 2012. The land was
initially classified on January 1, 1989, and is still classified on the date of
death of the owner. The heir (new owner) does not want to continue commercially
farming the land and sells the land on January 20, 2014. At the time of sale,
the buyer does not sign the notice of continuance because they will not be
using the land for commercial farming. The assessor will remove the land at the
time of sale and the removal would not be subject to additional tax, interest,
and penalty;
(l) The
assessor discovers that the land was classified under chapter 84.34 RCW in
error through no fault of the owner;
(i) For
purposes of this subsection, "fault" means a knowingly false or misleading
statement, or other act or omission not in good faith, that contributed to the
approval of the application for classification or the failure of the assessor
to remove the land from classification;
(ii) This exception does not apply if an
independent basis for removal exists. Examples of an independent basis for
removal include the owner changing the use of the land or failing to meet any
applicable income criteria required for classification; or
(m) The result of one of the following
changes in classification because of the owner's request for:
(i) Reclassification from farm and
agricultural land under
RCW
84.34.020(2) to: Timber land
under RCW
84.34.020(3), open space
land under
RCW
84.34.020(1), or forest land
under chapter 84.33 RCW;
(ii)
Reclassification from timber land under
RCW
84.34.020(3) to: Farm and
agricultural land under
RCW
84.34.020(2), open space
land under
RCW
84.34.020(1), or forest land
under chapter 84.33 RCW;
(iii)
Reclassification from open space/farm and agricultural conservation land under
RCW
84.34.020(1)(c) to farm and
agricultural land under
RCW
84.34.020(2) if the land was
previously classified as farm and agricultural land; or
(iv) Reclassification from forest land under
chapter 84.33 RCW to timber land under
RCW
84.34.020(3), farm and
agricultural land under
RCW
84.34.020(2), or open space
land under
RCW
84.34.020(1).
(8)
Land acquired
by agencies or organizations qualified under
RCW
84.34.210 or
64.04.130. If the purpose
for acquiring classified land is to protect, preserve, maintain, improve,
restore, limit the future use of, or conserve the land for public use or
enjoyment and the classified land is acquired by any of the following entities,
no additional tax, interest, or penalty will be imposed:
(a) State agency;
(b) Federal agency;
(c) County;
(d) City;
(e) Town;
(f) Metropolitan park district (see
RCW
35.61.010 );
(g) Metropolitan municipal corporation (see
RCW
35.58.020 );
(h) Nonprofit historic preservation
corporation as defined in
RCW
64.04.130;
(i) Nonprofit nature conservancy corporation
or association as defined in
RCW
84.34.250; or
(j) Federally recognized Indian
tribe.
(9)
Removal
of classification from land that was previously designated forest land under
chapter 84.33 RCW. Land that was previously designated as forest land
under chapter 84.33 RCW may be reclassified under chapter 84.34 RCW at the
owner's request within thirty days after removal of the land from designation.
If such land is subsequently removed from classification under chapter 84.34
RCW before it has been classified under chapter 84.34 RCW for at least ten
assessment years, a combination of compensating tax imposed under chapter 84.33
RCW and additional tax, interest, and penalty imposed under chapter 84.34 RCW
is due. RCW 84.33.145 explains the method
in which these taxes are calculated.
(10)
Termination of timber land
classification. Designation of forest land under
RCW
84.33.130(1) as a result of
a merger pursuant to
RCW
84.34.400 terminating a county's timber land
classification is not considered a withdrawal or removal under this chapter and
is not subject to additional tax, interest, and penalty.
Statutory Authority:
RCW
84.08.070,
84.34.141,
84.36.865,
84.52.0502. 09-19-010, §
458-30-300, filed 9/3/09, effective 10/4/09. Statutory Authority:
RCW
84.33.140,
84.34.055,
84.34.108,
84.34.141, and
84.08.070. 07-21-097, §
458-30-300, filed 10/18/07, effective 11/18/07. Statutory Authority:
RCW
84.34.141. 01-24-030, § 458-30-300,
filed 11/27/01, effective 12/28/01. Statutory Authority: RCW 84.08.110,
84.08.070,
84.34.141 and
84.34.360. 95-21-002, §
458-30-300, filed 10/4/95, effective 11/4/95. Statutory Authority:
RCW
84.08.010 and
84.08.070. 90-24-087, §
458-30-300, filed 12/5/90, effective 1/5/91. Statutory Authority:
RCW
84.08.010(2),
84.34.141 and
chapter
84.34 RCW. 88-23-062
(Order PT 88-12), § 458-30-300, filed
11/15/88.