Report on the Collection and Use of Revenues Pursuant to RCW 82.14.540(11), February 7, 2022
Summary
Report of the Washington State Department of Commerce, Community Services and Housing Division, to the Legislature on the Affordable and Supportive Housing Sales and Use Tax, issued pursuant to RCW 82.14.540(11) and dated February 7, 2022. For state fiscal year 2021 (July 1, 2020-June 30, 2021) it states that 121 jurisdictions (35 counties and 86 cities) received distributions from the Department of Revenue, totaling $25,308,797.12. Eighty jurisdictions completed the required annual report on revenue spending. Tables list distributions to participating counties and expenditures by jurisdiction, and Appendix A reproduces Chapter 365-240 WAC.
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Report on the collection and use of revenues pursuant to RCW
82.14.540(11)
February 7, 2022
COMMUNITY SERVICES &
HOUSING DIVISION Report to the Legislature
Director Lisa Brown
V3.0
Acknowledgments
Washington State Department of Commerce
Diane Klontz, assistant director
Community Services and Housing Division
Emily Grossman, policy and strategy advisor
Community Services and Housing Division
Washington State Department of Commerce
COMMUNITY SERVICES AND HOUSING DIVISION
1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525
www.commerce.wa.gov
For people with disabilities, this report is available on
request in other formats. To submit a request, please
call 360-725-4000 (TTY 360-586-0772)
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX
Table of Contents
Executive summary .............................................................................................................................................................. 2
Agency roles and activities .................................................................................................................................................. 4
2021 data overview .............................................................................................................................................................. 5
Appendix A: Chapter 365-240 WAC Affordable and Supportive Housing - Sales and Use Tax ................................. 13
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 1
Executive summary
Overview
The 2019 Encouraging Investments in Affordable and Supportive Housing Act (RCW 82.14.540) authorized a
new tax credit against the state's 6.5% sales tax rate for local governments to invest in affordable and supportive
housing. The maximum rate imposed may not exceed either 0.0146% or 0.0073% depending on the following
criteria in RCW 82.14.540(2):
(i) Beginning on July 28, 2019, until twelve months after July 28, 2019:
(A) 0.0073 percent for a:
(I) Participating city, unless the participating city levies a qualifying local tax; and
(II) Participating county, within the limits of nonparticipating cities within the county and within participating cities that
do not currently levy a qualifying tax;
(B) 0.0146 percent for a:
(I) Participating city that currently levies a qualifying local tax;
(II) Participating city if the county in which it is located declares they will not levy the sales and use tax authorized
under this section or does not adopt a resolution in accordance with this section; and
(III) Participating county within the unincorporated areas of the county and any city that declares they will not levy the
sales and use tax authorized under this section or does not adopt a resolution in accordance with this section…
Jurisdictions can receive these tax revenues for up to 20 years. Counties and cities implementing the tax must
report annually to the Department of Commerce (Commerce) on the "collection and use of the revenues."
Commerce prepares this report annually to update the Legislature on how participating jurisdictions use the
funds as directed in RCW 82.14.540(11), which states:
Counties and cities imposing the tax under this section must report annually to the department of commerce on the
collection and use of the revenue. The department of commerce must adopt rules prescribing content of such reports.
By December 1, 2019, and annually thereafter, and in compliance with RCW 43.01.036, the department of commerce
must submit a report annually to the appropriate legislative committees with regard to such uses.
The Department of Revenue (DOR) interprets and implements RCW 82.14.540 and administers the tax to
jurisdictions. It also calculates the maximum tax distribution jurisdictions receive each fiscal year.
Allowable use of funds
Affordable and Supportive Housing Sales and Use Tax revenues are available for housing and services to people
whose income is at or below 60% of the median income of the city or county imposing the tax (RCW
82.14.540(6)). Counties with more than 400,000 residents and cities with more than 100,000 residents may only
use the revenue for the following activities:
(i) Acquiring, rehabilitating, or constructing affordable housing, which may include new units within an existing
structure or facilities providing supportive housing services under RCW 71.24.385 [behavioral health organizations]; or
(ii) Funding the operations and maintenance costs of new units of affordable or supportive housing.
Counties with fewer than 400,000 residents and cities with fewer than 100,000 residents may use the revenue
for the uses stated above and for providing tenants with rental assistance. In addition, jurisdictions may finance
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 2
loans or grants to nonprofit organizations or public housing authorities or use the tax proceeds to repay bonds
under debt limitations imposed by the state constitution or statute. Additionally, they may enter into an interlocal
agreement with other cities, counties and housing authorities to pool and allocate the revenue.
2021 data summary
Commerce collected state fiscal year 2021 spending data from jurisdictions in October and November 2021.
Most jurisdictions have not begun spending Affordable and Supportive Housing Sales Tax revenue. Eighty
jurisdictions completed the required annual report on revenue spending for state fiscal year 2021. 1
121 jurisdictions (35 counties and 86 cities) received distributions from DOR.
DOR distributions statewide totaled $25,308,797.12 (see the 2021 data overview for the complete list).
Three jurisdictions reported spending or committing funds toward capital projects.
Eight jurisdictions reported utilizing revenue for rent assistance programs.
Five jurisdictions used funds for operations and maintenance costs of new housing units.
30 jurisdictions participate in interlocal partnerships to pool and distribute Affordable and Supportive
Housing Sales and Use Tax revenue. These jurisdictions are all in King and Thurston counties.
1
The online report form and instructions are on the Commerce website at https://www.commerce.wa.gov/affordable-and-supportive-
housing-sales-and-use-tax/
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 3
Agency roles and activities
Department of Revenue
The Department of Revenue (DOR) interprets and implements the law and administers the tax credit to
jurisdictions. It also calculates the maximum tax distribution jurisdictions receive and provides that information
to the Department of Commerce (Commerce).
The Affordable and Supportive Housing Sales Tax is not an additional tax but rather a tax credit against the state
portion of the sales and use tax returned to participating jurisdictions. Jurisdictions receive the tax distribution
monthly. DOR collects minimal information from jurisdictions to administer tax distributions. However, DOR
provides Commerce with data on jurisdictions' receipt of the tax credit for the required legislative report.
Department of Commerce
According to RCW 82.14.540, Commerce gathers information from jurisdictions on the use of Affordable and
Supportive Housing Sales Tax revenues. It then prepares this annual report to update the Legislature on the
collection and use of funds statewide. Pursuant to RCW 82.14.540, Commerce conducted rulemaking in 2019
and 2020 to prescribe the content of those reports. The final rule was adopted on April 13, 2020 (See Appendix A
for the final rule).
How the rate is calculated
The maximum authorized tax distribution is based on the jurisdiction's taxable retail sales in state fiscal year
2019 multiplied by the authorized tax rate (0.0073% or 0.0146%). For example, suppose a city's taxable retail
sales were $1 million in state fiscal year 2019. In that case, the maximum amount the city may receive is either
$73 or $146 per fiscal year, depending on its authorized rate. If that city had taxable retail sales of $50,000 for a
particular month and was eligible to receive the 0.0073% rate, it would receive $3.65 in tax distribution.
The tax rate is based on three factors: date of adoption, presence of a qualifying local tax (cities only) and
whether the corresponding city or county is a participating jurisdiction. In some circumstances, counties and
cities share revenue. A full list of jurisdictions receiving funds is available in the 2021 data overview in the next
section.
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 4
2021 data overview
Participating jurisdictions
The data presented in Tables 1, 2, 3 and 4 are reported for state fiscal year 2021 (July 1, 2020-June 30, 2021).
Highlights
121 jurisdictions (35 counties and 86 cities) received distributions from the Department of Revenue (DOR)
The total DOR distribution statewide was $25,308,797.12
Table 1: Distributions to participating counties in state fiscal year 2021
County Distribution amount
Adams $51,473.20
Asotin $30,949.24
Benton $558,286.43
Chelan $199,558.97
Clallam $144,150.82
Clark $730,494.86
Columbia $9,501.63
Cowlitz $161,897.88
Douglas $27,384.55
Franklin $33,108.54
Garfield $5,136.80
Grant $251,237.61
Grays Harbor $105,206.02
Island $146,440.13
Jefferson $61,855.33
King $3,682,158.04
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 5
County Distribution amount
Klickitat $54,212.91
Lewis $233,150.81
Lincoln $15,053.76
Mason $121,900.28
Okanogan $76,963.29
Pacific $142,290.11
Pend Oreille $24,130.78
Pierce $1,601,254
San Juan $82,053.83
Skagit $277,060.87
Skamania $11,908.78
Snohomish $1,343,274.79
Spokane $937,880.63
Thurston $471,605.03
Wahkiakum $5,963.10
Walla Walla $96,061.54
Whatcom $683,598.73
Whitman $64,337.46
Yakima $351,655.51
Total distribution to 35 participating counties $12,793,196.26
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 6
Table 2: Distributions to participating cities in state fiscal year 2021
City Distribution amount
Airway Heights $14,377.28
Anacortes $68,100
Arlington $38.924.65
Auburn $129,338.07
Bainbridge Island $43,463.82
Bellevue $618,387.38
Bonney Lake $46,615.86
Bothell $99,603.37
Bremerton $60,097.84
Burien $63,337.24
Burlington $53,268.99
Carnation $3,645.58
Cashmere $2000.13
Chelan $12,340.03
Clyde Hill $4,832.15
Covington $42,544.04
Dayton $2,548.08
Des Moines $2,548.08
Duvall $9,025.31
East Wenatchee $33,208.71
Edmonds $71,931.05
Ellensburg $85,189.37
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 7
City Distribution amount
Enumclaw $27,674.90
Everett $224,718.31
Federal Way $125,065.50
Fife $61,819.72
Forks $4,713.90
Issaquah $122,956.20
Kalama $4,453.14
Kenmore $22,466.15
Kent $194,889.31
Kirkland $205,225.23
Lacey $110,373.93
Lake Forest Park $5,639.31
Lake Stevens $34,891.73
Lakewood $97,697.17
Leavenworth $15,631.81
Longview $16,808.04
Lynnwood $156,078.46
Maple Valley $26,185.81
Marysville $94,117.37
Mercer Island $37,372.56
Mill Creek $24,674.77
Monroe $45,540.66
Moses Lake $57,023.92
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 8
City Distribution amount
Mount Vernon $54,782.61
Mukilteo $17,795.86
Newcastle $12,152.37
North Bend $19,332.50
Olympia $329,491.11
Omak $14,497.27
Pasco $90,485.39
Port Angeles $58,025.59
Port Orchard $44,553.73
Port Townsend $13,705.32
Poulsbo $35,922.03
Puyallup $194,101.51
Quincy $31,272.12
Redmond $289,265.78
Renton $187,893.36
Ridgefield $19,774.23
Sammamish $53,098.32
Seatac $95,589.08
Seattle $4,220,387.50
Sedro Woolley $12,393.71
Sequim $22,271.29
Shoreline $86,235.08
Snohomish $37,391.39
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 9
City Distribution amount
Snoqualmie $20,066.27
Spokane $402,274.47
Spokane Valley $193,522.69
Stanwood $14,544.47
Stevenson $3168.20
Sumner $43,682.00
Tacoma $435,389.46
Tukwila $148,238.75
Tumwater $63,703.51
University Place $23,468.97
Vancouver $407,857.49
Washougal $8,655.10
Wenatchee $85,427.15
Winthrop $3,202.51
Woodinville $61,532.49
Woodway $1,562.68
Yakima $147,516.63
Total distribution to 85 participating cities $9,919,602.33
Jurisdictions' use of funds
Most jurisdictions have not begun spending their Affordable and Supportive Housing Sales Tax revenue. Eight
jurisdictions (shown in Table 2) reported using the revenue for rent assistance programs. Three jurisdictions
reported spending on capital projects (shown in Table 3). Five jurisdictions used Affordable and Supportive
Housing Sales and Use Tax revenue to support operations and maintenance costs for new affordable housing
units (shown in Table 4).
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 10
Table 2: Spending on rent assistance by jurisdiction and target population, SFY 2021
Jurisdiction Total spent Households served Priority population served
People financially impacted by the COVID
Bainbridge Island $10,807.00 11
pandemic
Covington $37,781.08 60 Low-income households
Mercer Island $42,822.00 25 Low-income households
San Juan County $620 1 Low-income households
Shoreline $133,542.42 77 Low-income households
Tukwila $125,486.00 117 Low-income households
People with behavioral health disabilities or
Thurston County $372,806.00 54
exiting institutions, families with children
Whatcom County $129,532.71 54 Low-income households
Total $853,397.21 399 N/A
Table 3: Capital project expenditures by jurisdiction, state fiscal year 2021
Jurisdiction Total spent Activity New projects/units
Grant County $324,000.00 Rehabilitation only N/A
Marysville $561,877.05 Acquisition only N/A
Grants/loans for new 1 project/40 units newly in service with
San Juan County $42,956.50
construction affordability covenants of 31+ years
Total $928,833.55 N/A N/A
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 11
Table 4: Operations and maintenance expenditures by jurisdiction, SFY 2021
Jurisdiction Total expenditures Units supported
Garfield County $13,800 2
Grant County/Moses Lake $7,112.32 35
Jefferson County $94,068.00 10
Marysville $59.49 2
Okanogan County $42,006.85 25
Total $157,047 74
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 12
Appendix A: Chapter 365-240 WAC
Affordable and Supportive Housing - Sales and Use Tax
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 13
AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 14
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