John Wilson, the assessor for King County, which contains Seattle, asked the Legislature to consider two amendments to state law in a news conference on county television on Thursday. One proposed amendment would allow a county assessor to reconsider the true and fair value of a commercial property to account for negative impacts on its value resulting from government restrictions on the property's use.
The other would modify the state statute on destruction of property to allow for property tax abatements if a property has lost more than 20% of its value due to use restrictions from federal, state or local governments in response to a public health emergency.
The amendments are intended as measures of fairness to commercial taxpayers and would help businesses severely impacted by the pandemic to survive, Wilson told Law360.
"One of the principal goals for an assessor and for setting property values is that they be fair and equitable," Wilson said.
He said that the pandemic had a similar effect on the values of properties as other natural disasters for which the state had provided property tax relief. He added that the relief would not be provided to residential homeowners, as based on current information, residential property values had not been severely affected by the pandemic.
Under the revaluation proposal, an assessor would reconsider a property's value, if a petition has been filed for it, by reassessing the value as of the effective date of a government restriction, if the restriction takes effect after Jan. 1 of an assessment year. The value of the property would then be adjusted according to how many days in the year the property's use was restricted.
Under state law, county assessors are normally required to set a property value effective Jan. 1 of a given year, for taxes due the next year.
Wilson told Law360 that if the Legislature moves quickly, the amendment to the statute on destruction of property could allow assessors to adjust taxes due for 2020, providing immediate relief. The revaluation amendment would provide relief for next year's property taxes if passed.
The amendments would result in King County collecting about $155 million less in revenue for 2020, Wilson said in the news conference.
Wilson also said the amendments are not intended to provide windfalls to taxpayers who have not been affected by the pandemic. He said applicants for relief would be required to file documentation demonstrating losses.
Rep. Ed Orcutt, R-Kalama, told Law360 that he supports tax relief for small businesses but was worried the current proposal might shift the tax burden to homeowners and other struggling businesses. Orcutt said it was likely a special legislative session would be called, but said the timing of any potential session would depend on how severe the revenue decline is in the state's upcoming June 17 forecast.
"The steeper the decline in revenues, the more urgent it will be to make adjustments to the budget," Orcutt told Law360. "The longer the Legislature waits to adjust the budget, the harder it will be to balance."
State House Finance Committee Chairwoman Gael Tarleton, D-Seattle, did not respond to requests for comment.
Whether Democratic Gov. Jay Inslee will support Wilson's proposals is unclear. In April, Inslee vetoed legislation that would have given a business and occupation tax deduction to health and social welfare organizations that provide mental health services or substance abuse treatment in government-funded programs, citing the pandemic's impact on state revenue.
Inslee's office did not respond to requests for comment.
--Editing by Neil Cohen.
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