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Published on Friday, February 13, 2015

Imposing fines and withholding taxes to local jurisdictions not filing annual financial reports

Last month, the Washington State Auditor’s Office (SAO) issued a special report about local governments that do not file their annual financial reports. The report found that 611 local governments did not file their financial report with SAO in 2013.

In response to that report, Rep. Ross Hunter (D-Medina) is sponsoring HB 2084, which imposes fines and withholds taxes to certain local governments who fail to file their annual financial reports with SAO.

Most of the proposal applies only to special purpose districts, and it specifically excludes cities, towns, and counties. However, all local governments, including cities and towns, failing to file their financial report within 150 days of the close of the fiscal year would be subject to a $500 fine.

In addition, the bill requires SAO to notify the state and county treasurers each October 1 of which special purpose districts have not filed their annual financial reports. The treasurers would be required to withhold property and sales tax distributions until the filing is made. If a special district has not filed a report for two consecutive years, the county must initiate the dissolution or disincorporation process.

The House Local Government Committee will hear the proposal on Tuesday, February 17 at 10am.

Categories: Budget & finance