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Published on Friday, March 21, 2014

Tribal property tax exemption passes

The bill establishing a property tax exemption for all tribally owned property used for economic development passed both chambers and awaits the Governor’s signature. Before HB 1287 passed, a number of amendments were made. The final version of the bill: 

  • 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.” 
  • Applies only to property owned by a tribe before March 1, 2014. 
  • Limits the exemption to tribes located within Washington State. 
  • Extends the leasehold excise tax to exempt tribal property. 
  • Establishes a payment in lieu of leasehold excise taxes (PILT) if the tribe does not lease the property to another party. The PILT is negotiated between the tribe and the county in which the property is located and may not exceed what would otherwise be owed as a leasehold excise tax. If the tribe and the county cannot agree on an amount, the Department of Revenue may determine the amount. The PILT is distributed as if a leasehold excise tax had been levied. 
  • Requires the Joint Legislative Audit and Review Committee (JLARC) to complete an economic impact report by December 1, 2020. 
  • Adds an expiration date for the exemption of January 1, 2022.
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