Amnesty Period for Reporting Business Personal Property Taxes through July 1

The King County Council last week passed an ordinance that would create an amnesty period through July 1 in which owners of unreported business personal property have the opportunity to come forward and list their property without penalty, a press release from the King County Assessor's office said.

This effort is aimed at increasing fairness and equity in property tax collection by helping to ensure that personal property taxes are paid by those that should be paying. This will distribute the tax burden more fairly, and will reduce the tax rate for all taxpayers, including those that are currently paying their personal property taxes as required by law. In addition, it will help to even the playing field for all businesses, as those that are not paying personal property taxes have a competitive advantage (more discretionary resources) than those that are.

“This is a great and unique opportunity to assist small businesses,” said Councilmember Kathy Lambert, who co-sponsored the ordinance. “For those concerned about the financial penalties for not reporting, this is a one-time opportunity to come current on personal property taxes without an additional fine. The state provided a similar amnesty last year, which helped nearly 8,900 businesses and collected more than $320 million. We know small businesses are enduring tough economic times, so we hope they will take advantage of this offer.”

The administration of business personal property in Washington State is accomplished through a self-reporting system. Businesses that have personal property subject to taxation are required by law to report that property to their local County Assessor. Businesses that do not self-report their personal property are subject to a penalty of up to 25 percent in the aggregate against the total tax liability if they are discovered by the Assessor.

The ordinance adopted by the County Council waives the penalty if the businesses come forward by July 1 and list their personal property and pay any taxes due by September 1. The Washington State Legislature made this local-option personal property amnesty program available to counties this year through the adoption of HB 2149.

“We hope that any business owner that has unreported personal property will take advantage of this amnesty period. We also hope to use this amnesty ordinance as an opportunity to educate business owners about business personal property reporting requirements. Some business owners may not even know that they are supposed to pay taxes on business personal property,” said King County Assessor Lloyd Hara.

Corporations are required to pay taxes on taxable personal property, including machinery, equipment, and supplies of businesses and farms, state-assessed commercial boats, and most operating property of public utilities. Items that are exempt include household goods, intangible personal property, and business inventories. Farm machinery is exempt from the state levy but subject to local levies.

Owners of business personal property are required to list the items, their acquisition cost, and the year acquired with the county assessor each year. The assessor then determines the current assessed value. The assessor can collect back taxes for up to three years on unreported personal property.

The King County Assessor administers approximately 36,000 personal property accounts. These accounts total just under $18 billion in assessed value.

Business owners with questions about this personal property amnesty program should call 206-296-5126. The general number for the King County Assessor's Office is 206-296-7300.

Editor's Note: Information provided by the office of the King County Assessor.