SB 5768 — Concerning a leasehold excise tax credit for properties of market value in excess of ten million dollars and for certain major international airport leases.

S-1765.3SUBSTITUTES-1025.1SENATE SENATE BILL 5768State of Washington65th Legislature2017 Regular SessionBy Senate Ways & Means (originally sponsored by Senators Rossi and Frockt)READFrocktRead FIRSTfirst TIMEtime 04/03/17.AN02/09/17. ACT Relating to a leasehold excise tax credit for properties of market value in excess of ten million dollars and for certain major international airport leases;

Referred to Committee on Ways & Means.AN ACT Relating to a leasehold excise tax credit for properties of market value in excess of ten million dollars and for certain major international airport leases;

providing an effective date;

The amount of leasehold excise tax or property tax must be expressed in dollars per thousand dollars of assessed value and any other way the joint legislative audit and review committee deems necessary to clearly convey the data.(5)(a) The information provided by taxpayers to the department of revenue and publicly available property tax data is intended to provide the informational basis for the evaluation under subsection (4) of this section.(b) In addition to the data source described under (a) of this subsection, the joint legislative audit and review committee may use any other data it deems necessary in performing the evaluation under subsection (4) of this section.(6) The amount of credit reported by a taxpayer to the department is not confidential tax information under RCW 82.32.330 and is subject to disclosure.Sec. 2.  RCW 82.29A.120 and 2013 c 235 s 3 are each amended to read as follows:(1)(a)follows:After After computation of the taxes imposed pursuant to RCW 82.29A.030 and 82.29A.040, the following credits are allowed in determining the tax payable:(((1)))payable:(1) (i) For lessees and sublessees who would qualify for a property tax exemption under RCW 84.36.381 if the property were privately owned, the tax otherwise due after this credit ((shall))shall must be reduced by a percentage equal to the percentage reduction in property tax that would result from the property tax exemption under RCW 84.36.381;

and(((2)))and(2) (ii) A credit of thirty-three percent of the tax otherwise due is allowed with respect to a product lease.(b)(i)lease.(3)(a) For a leasehold interest in real property owned by a state university or a major international airport, a credit is allowed equal to the amount that the tax under this chapter exceeds the property tax that would apply if the real property were privately owned by the taxpayer.(ii)taxpayer.(b) The credit under this subsection (1)(b)(3) is available only if the tax parcel that is subject to the leasehold interest:(A)interest:(i) Has a market value in excess of ten million dollars.

or(B)or(ii) Is subject to a lease that is between a lesseemajor international airport and the governing body of the major international airport, except for those leases between federal aviation administration-approved entities and the governing body of a major international airport.

(iii)(c) For purposes of calculating the credit under this subsection (1)(b):(A)(3):(i) If a tax parcel does not have current assessed value in accordance with RCW 84.40.020, a market value appraisal performed by a Washington state-certified general real estate appraiser, as defined in RCW 18.140.010, is sufficient to establish the market value.

and(B)and(ii) The property tax that would otherwise apply to the real property that is the subject of the leasehold interest is calculated using the existing consolidated levy rate for the property's tax code area.(iv) Thearea.(d) The definitions in this subsection apply throughout this subsection (1)(b)(3) unless the context clearly requires otherwise.(A)otherwise.(i) "Major international airport" means an airport that isis:(A) locatedOwned inby Washingtona andport hasdistrict one million or more enplanements in a calendarcounty yearwith asa reportedpopulation by the federal aviation administration.(B) "Market value" means the true and fair value of theone propertymillion asfive thatthousand 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.(C) "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.(D) "State university" has the same meaning as "state universities" as provided in RCW 28B.10.016.(v) The credit provided under this subsection (1)(b) may not be claimed for tax reporting periods beginning on or aftergreater; January 1, 2032.(2) This section expires January 1, 2032.NEW SECTION.  Sec. 3.  This act takes effect January 1, 2022.--- END ---

or(B) Owned jointly by a city and a county in a county with a population of four hundred thousand or greater.(ii) "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.(iii) "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.(iv) "State university" has the same meaning as "state universities" as provided in RCW 28B.10.016.(e) The credit provided under this subsection (3) may not be claimed for tax reporting periods beginning on or after July 1, 2022.NEW SECTION.  Sec. 3.  This act expires July 1, 2022.--- END ---