Bill reduces delinquent property taxes and interest charges
Last updated 5/20/2021 at 10:06am
SPOKANE COUNTY — A measure just signed into law could help prevent home foreclosures for some taxpayers.
Engrossed Substitute House Bill 1410, signed May 12 by Gov. Jay Inslee, reduces the annual rate of penalty and interest charged to delinquent property taxes which currently totals 23% in the first year. State 6th District Rep. Mike Volz (R-Spokane), who also serves as Chief Deputy Treasurer of Spokane County, was the prime sponsor of the legislation.
According to a news release from the county Treasurer’s Office, under current state law, a county treasurer must charge penalty and interest to delinquent property taxes at a rate of 1% interest per month with a 3% and 8% penalty assessed in June and December respectively totaling a 23% annual delinquency rate. Property tax penalty and interest is remitted to the county general fund. State usury laws which prohibit the charging of excessive interest fees exempts those for delinquent taxes.
Under ESHB 1410, which takes effect Jan. 1, 2022, delinquent property taxes will be charged penalty and interest as follows:
Beginning Jan. 1, 2022: All delinquent property taxes will be charged 1% per month interest. The 3% June and 8% December penalties will be eliminated.
Beginning Jan. 1, 2023: Residential real property with four or fewer units will be charged 0.75% per month interest and the 3% June and 8% December penalties will remain eliminated totaling an annual 9% interest rate.
Beginning Jan. 1, 2023: The 3% June and 8% December penalties will be re-instated for non-residential parcels and residential properties with greater than four units.
“This legislation is a significant victory for providing taxpayer relief,” Spokane County Treasurer Michael Baumgartner said in a statement. “The prior rate of interest and penalty charged on back taxes was usury and predatory towards struggling property owners. Rep. Volz deserves a tremendous amount of credit for his work advocating for this good piece of public policy.”
In recent years, the amount of delinquent property tax penalty collected in Spokane County has ranged between $1.2 million to $1.6 million. The Treasurer’s Office collects, safeguards, and invests the public funds on behalf of over eighty regional governmental entities.
Volz, who has sponsored similar legislation in years past, lauded the bipartisan work on his bill, crediting relationships he has built across the aisle and in both chambers of the Legislature. The bill passed the House 97-0 twice and the Senate 49-0.
“As a Republican, I’m in the minority in Olympia, but a good idea is a good idea,” Volz said in a statement. “Sometimes the biggest battles in the Legislature are simply convincing your legislative colleagues that there is indeed a problem, and that you have a common sense solution.”