Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-29A - Leasehold excise tax › Section 458-29A-600 - Leasehold excise tax-Collection and administration

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
Leasehold
			 excise tax is levied by the state under
			 RCW
			 82.29A.030 and by counties and/or cities
			 under
			 RCW
			 82.29A.040. The administrative procedures
			 contained in chapters 82.02 and 82.32 RCW apply to the administration and
			 collection of the leasehold excise tax.
(2)
Tax imposed.
The rates at
			 which leasehold excise tax is levied are contained in
			 RCW
			 82.29A.030 and
			 82.29A.040.
			 The department publishes documents containing the applicable rates, credits,
			 and formulas. These documents are updated as necessary and are available upon
			 request.
(3)
Separate listing
			 requirement.
The amount of leasehold excise tax due must be listed
			 separately from the amount of contract rent on any statement or other document
			 provided to the lessee by the lessor. If the leasehold excise tax is not stated
			 separately from the contract rent, it is assumed that the leasehold excise tax
			 is not included in the amount stated as due.
(4)
Credits allowed against leasehold
			 excise tax.
Because the leasehold excise tax is intended only to
			 equalize treatment between private property owners and lessees of public
			 entities, the amount of leasehold excise tax should not exceed the amount of
			 property tax that would be due if the leased property was privately owned.
			 Therefore, in calculating the taxes imposed under
			 RCW
			 82.29A.030 and
			 82.29A.040,
			 RCW
			 82.29A.120 authorizes the following credits:
(a)
Property tax exemption under
			 RCW
			 84.36.381.
Lessees and sublessees of
			 residential property who would qualify for either a partial or total exemption
			 from property tax under
			 RCW
			 84.36.381 if they owned the property in fee
			 are eligible for a corresponding reduction in the amount of leasehold excise
			 tax due. The leasehold excise tax for the qualifying lessees or sublessees is
			 reduced by the same percentage as the percentage reduction in property that
			 would result from the property tax exemption under
			 RCW
			 84.36.381.
(b)
Product leases.
A credit of
			 33 percent of the total leasehold excise tax due is allowed for product
			 leases.
(c)
Real property
			 owned by a state university
. For a leasehold interest in real property
			 owned by a state university, a credit is allowed equal to the amount of
			 leasehold excise tax due under chapter 82.29A RCW that exceeds the amount of
			 property tax that would be due if the property was privately owned by the
			 taxpayer. The credit is available only if the tax parcel that is subject to the
			 leasehold interest has a market value in excess of $10,000,000. If the
			 leasehold interest attaches to two or more parcels, the credit is available if
			 at least one of the tax parcels has a market value in excess of $10,000,000. In
			 either case, the market value must be determined as of January 1st of the year
			 prior to the year for which the credit is claimed. This credit may not be
			 claimed for tax reporting periods beginning on or after January 1, 2032, and
			 the credit may not be claimed or approved on or after January 1, 2032. For
			 purposes of this subsection (4)(c), the following definitions apply:
(i) "Market value" means the true and fair
			 value of the property as that term is used in
			 RCW
			 84.40.030, based on the property's highest
			 and best use and determined by any reasonable means approved by the
			 department;
(ii) "Real property"
			 has the same meaning as in
			 RCW
			 84.04.090, and also includes all improvements
			 upon the land the fee of which is still vested in the public owner;
			 and
(iii) "State university" has
			 the same meaning as provided in
			 RCW
			 28B.10.016.