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Published on Friday, February 7, 2014

Tribal property tax exemption

This week, the Senate Governmental Operations Committee passed a substitute version of SB 6162, providing a property tax exemption for all tribally owned property used for economic development, and the bill has been referred to the Senate Ways & Means Committee. The substitute is identical to HB 1287 that is currently eligible for a vote by the full House. The current version of the bills:

  • Defines economic development as “commercial activities, including those that facilitate the creation or retention of businesses or jobs, or that improve the standard of living or economic health of tribal communities.”
  • Limits the exemption to tribes located within Washington State.
  • Establishes a payment in lieu of leasehold excise tax (PILT) if the tribe owns and operates the commercial property. The PILT must be negotiated between the tribe and the county in which the property is located.
  • Contains a sunset date of July 1, 2022.
  • Requires the Joint Legislative Audit & Review Committee to review the economic impact of the exemption by December 1, 2020.

With provisions for payment of a leasehold excise tax or a PILT, local governments should not lose any tax revenue under the current proposal and may see a revenue increase. We continue to have some concerns about implementation of the bill.

Categories: Budget & finance