Washington property taxes were established at the same time that the territory gained statehood in 1853. Until the Great Depression, these taxes remained the main source of revenue for local and state governments. The property tax was considered the foremost determinant of an individual’s ability to pay. Most of the revenue went directly to programs that benefited those within the state who owned property, so the property tax was a sensible solution.
The Great Depression changed Washington property taxes significantly. Property owners were having difficulty making their payments, ultimately leading to the passage of the Revenue Act of 1935. State and local governments now focused more on excise taxes, which were essentially a sales tax, though property taxes continued to be collected.
Washington Property Taxes: An Important Revenue Source
That remains true to this day. Property tax continues to provide approximately 30 percent of all local and state taxes in Washington. Revenue from property taxes provides money for essential resources like public schools, libraries, parks and fire services.
Taxing Real Property
All real property in Washington may be subject to property taxes. Real property may include both land and structures as well as certain pieces of equipment which are affixed to a structure. Some personal property that is used for business purposes also may be subject to personal property taxes. The value of the property is determined by assessors, who are required by law to use a property’s true and fair market value to determine how much a particular parcel of property is worth.
Every county in Washington is charged with revaluing properties each year. Physical inspections of the property are mandated every six years. Counties are responsible for informing property owners when the value of the property changes.
Constitutional Limits on Property Taxes
The state Constitution puts a limit of one percent of market value on property tax rates. This is calculated as $10 per $1,000 of value. Special levies are additional to this amount. Property tax rates vary from one county to the next. Check out tax rate information for some of the highest counties in the state:
- King County: http://kingcounty.gov/depts/finance-business-operations/treasury/property-tax.aspx
- Clark County: https://www.clark.wa.gov/treasurer/property-tax-information
- Kitsap County: https://spf.kitsapgov.com/assessor/Pages/CommercialAppraisal.aspx
- Snohomish County: http://snohomishcountywa.gov/2934/Assessor
- San Juan County: sanjuanco.com/149/Assessor
Tax Incentives for Companies
In an effort to encourage companies to locate their headquarters or an office within the state, the government offers a number of incentive programs. These may include credits, exemptions, deferrals and reduced B&O rates. Taking advantage of any of these incentives requires the business owner to file an annual report or survey by May 31 every year. Some businesses may be required to file both a report and a survey, depending upon the incentives they used.
Washington State has a more attractive property tax rate when compared with many other states. Nonetheless, it still may be useful for business owners to work with Assessment Technologies when they believe that their property has been assessed inaccurately. Assessment Technologies also may provide professional guidance and advice when it comes to appealing an assessment or making certain that a business is taking full advantage of all available incentives.
Contact our representative in our Washington State office for any property tax assistance.
Lynnwood WA 98036