Affordable and Supportive Housing Sales and Use Tax: Annual Report (December 2022)
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- 2022 Commercereports Affordable And Supportive Housing Tax Use 000C0091 19F
Summary
A December 2022 report to the Legislature by the Washington State Department of Commerce, Housing Division, on the collection and use of Affordable and Supportive Housing Sales and Use Tax revenues under RCW 82.14.540(11). It explains the tax authorized in 2019 and the allowable uses of its revenue. For state fiscal year 2022, the report states that 125 jurisdictions received Department of Revenue distributions totaling $26,436,620.95 and that 111 jurisdictions completed the annual report. Jurisdictions spent $12,151,527.17, including $714,576.94 on rent assistance, $10,175,593.03 on capital projects and $1,261,357.20 on operations and maintenance. Tables list distributions by county and city and expenditures by jurisdiction, and Appendix A is Chapter 365-240 WAC.
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“Affordable and Supportive Housing Sales and Use Tax: Annual Report (December 2022).”
Original at app.leg.wa.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2022-commercereports-affordable-and-supportive-housing-tax-use-000c0091-19f/
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Affordable and Supportive
Housing Sales and Use Tax
— Collection and use of
revenue
Annual report on the collection and use of revenues pursuant to
RCW 82.14.540(11)
December 2022
HOUSING DIVISION Report to the Legislature
Director Lisa Brown
V3.2
Acknowledgments
Washington State Department of Commerce
Corina Grigoras, assistant director,
Housing Division
Oliver Crain, policy contracts manager,
Housing Division
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)
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX
Table of Contents
Executive summary...................................................................................................................................... 2
Agency roles and activities .......................................................................................................................... 3
State fiscal year 2022 data overview ............................................................................................................ 4
Appendix A: Chapter 365-240 WAC Affordable and Supportive Housing - Sales and Use Tax ...................... 10
2022 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 state-shared local tax for affordable and supportive housing investments. It authorized a local sales tax
option that is a credit against the state sales tax rate of 6.5%. The maximum rate imposed may not exceed
either 0.0146% or 0.0073%. Jurisdictions can receive Affordable and Supportive Sales and Use 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 completed rulemaking on April
13, 2020, to prescribe the contents of those reports.
Allowable use of funds
Jurisdictions may use Affordable and Supportive Housing Sales and Use Tax revenues to provide housing and
services to persons whose income is at or below 60% of the median income of the city or county imposing the
tax. Counties over 400,000 population and cities over 100,000 population may use the revenue for only 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 under 400,000 population and cities under 100,000 population may also use the revenue for providing
tenant-based rental assistance. Jurisdictions may finance loans or grants to nonprofit organizations or public
housing authorities and pledge the tax proceeds to repay bonds under debt limitations imposed by the state
constitution or statute. In some cases, cities and counties share revenue. They may enter into an interlocal
agreement with other cities, counties, and housing authorities to pool and allocate the revenue.
State fiscal year 2022 data
Commerce collected spending data from jurisdictions from August to October 2022. A total of 111
jurisdictions completed the required annual report on revenue spending for state fiscal year 2022.1
125 (37 counties and 88 cities) jurisdictions received distributions from the Department of Revenue (DOR)
The total DOR distribution statewide was $26,436,620.95.
Most jurisdictions did not spend Affordable and Supportive Sales Tax revenue.
Nine jurisdictions spent or committed funds toward capital projects.
Thirteen jurisdictions utilized revenue for rent assistance programs.
Sixteen jurisdictions utilized funds for operations and maintenance costs of new housing units.
Twenty-three jurisdictions are participating in interlocal partnerships to pool and distribute revenue. These
jurisdictions are North King County, South King County, Thurston County, Jefferson County, and Cowlitz
County.
1 The online report form and instructions are located on the Commerce website at https://www.commerce.wa.gov/affordable-and-
supportive-housing-sales-and-use-tax/
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 2
Agency roles and activities
Department of Revenue
The Department of Revenue (DOR) interprets and implements RCW 82.14.540, makes monthly revenue
distributions to jurisdictions, and calculates the maximum tax distribution participating jurisdictions may
receive each year. DOR collects minimal information from jurisdictions to administer the tax.
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, if a city's taxable retail sales
were $1 million in fiscal year 2019, 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
were eligible to receive the 0.0073% rate, it would receive $3.65 in tax distribution for that month.
The tax rate is based on three factors at the time of adoption: the date of adoption, the presence of a qualifying
local tax (cities only), and whether the corresponding city or county was a participating jurisdiction.
Department of Commerce
Participating jurisdictions must report to Commerce annually on the "collection and use of the revenues."
Pursuant to RCW 82.14.540, Commerce conducted rulemaking in 2019 and 2020 to prescribe the content of
those reports.
Commerce collects information from jurisdictions on the collection and use of revenues and prepares this
report annually.
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 3
State fiscal year 2022 data overview
Participating jurisdictions
Reported data for state fiscal year 2022 (July 1, 2021, through June 30, 2022):
One hundred twenty-five jurisdictions (37 counties and 88 cities) received distributions from the DOR.
DOR distributions statewide totaled $26,436,620.95.
Table 1: Participating counties and state fiscal year 2022 distributions
Counties Total distributions
Adams $51,473.23
Asotin $30,949.24
Benton $618,727.25
Chelan $199,558.97
Clallam $136,012.20
Clark $773,383.81
Columbia $10,364.43
Cowlitz $161,897.88
Douglas $127,381.86
Franklin $33,108.54
Garfield $5,136.79
Grant $251,237.61
Grays Harbor $105,206.02
Island $146,440.13
Jefferson $61,855.33
King $4,200,739.28
Kitsap $548,947.89
Kittitas $79,043.90
Klickitat $54,212.91
Lewis $233,150.81
Lincoln $15,053.76
Mason $121,900.28
Okanogan $76,963.29
Pacific $40,900.11
Pend Oreille $24,130.78
Pierce $1,601,254.00
San Juan $82,053.83
Skagit $277,060.89
Skamania $11,908.78
Snohomish $1,343,274.79
Spokane $937,880.63
Thurston $502,349.40
Wahkiakum $6,946.98
Walla Walla $96,061.54
Whatcom $683,598.73
Whitman $64,337.46
Yakima $351,655.51
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 4
Table 2: Participating cities and state fiscal year 2022 distributions
Cities Total distributions
Airway Heights $19,353.36
Anacortes $81,267.09
Arlington $44,919.94
Auburn $149,338.07
Bainbridge Island $43,463.82
Bellevue $625,858.12
Bonney Lake $49,389.32
Bothell $106,990.94
Bremerton $77,236.45
Burien $63,337.24
Burlington $74,039.40
Carnation $3,645.58
Cashmere $5,052.43
Chelan City $15,706.68
Clyde Hill $6,872.03
Covington $42,544.04
Dayton $2,548.08
Des Moines $31,608.42
Duvall $9,025.31
East Wenatchee $33,224.72
Edmonds $71,931.05
Ellensburg $85,189.37
Enumclaw $27,674.90
Everett $224,718.31
Federal Way $125,065.50
Fife $71,422.87
Forks $4,713.90
Issaquah $122,956.20
Kalama $4,453.14
Kenmore $22,466.15
Kent $194,889.31
Kirkland $211,668.86
Lacey $110,373.93
Lake Forest Park $9,970.02
Lake Stevens $34,891.73
Lakewood $97,697.17
Leavenworth $15,631.81
Longview $74,283.98
Lynnwood $196,819.21
Maple Valley $31,276.12
Marysville $94,117.37
Medina $9,782.77
Mercer Island $37,372.56
Mill Creek $24,674.77
Monroe $45,540.66
Moses Lake $57,023.92
Mount Vernon $65,029.18
Mukilteo $22,746.85
Newcastle $12,152.37
Normandy Park $5,447.45
North Bend $23,323.54
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 5
Cities Total distributions
Olympia $329,491.11
Omak $16,931.69
Pasco $105,831.92
Port Angeles $58,025.41
Port Orchard $44,553.73
Port Townsend $20,596.03
Poulsbo $35,922.03
Puyallup $194,101.51
Quincy $38,261.05
Redmond $289,265.78
Renton $226,431.09
Ridgefield $23,741.44
Sammamish $53,098.32
Seatac $141,175.78
Seattle $4,228,362.75
Sedro Woolley $14,140.23
Sequim $29,920.82
Shoreline $86,235.08
Snohomish City $37,391.39
Snoqualmie $24,320.37
Spokane City $402,274.47
Spokane Valley $193,522.69
Stanwood $14,544.47
Stevenson $4,807.77
Sumner $51,630.01
Tacoma $853,070.46
Tukwila $165,998.21
Tumwater $63,703.51
University Place $25,412.69
Vancouver $658,931.05
Washougal $14,467.98
Wenatchee $85,427.15
Winthrop $3,550.64
Woodinville $63,206.56
Woodway $1,747.86
Yakima (city) $147,516.63
Yelm $2,126.42
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 6
Jurisdictions' use of funds
Approximately 30 participating jurisdictions spent revenue on new or existing projects. Thirteen jurisdictions
(shown in Table 3) used revenue for rent assistance programs. Nine jurisdictions used revenue for capital
projects (shown in Table 4), and 16 used revenue to support operations and maintenance costs of new units of
affordable housing (shown in Table 5).
State fiscal year 2022 spending summary:
Jurisdictions spent $12,151,527.17
They spent $714,576.94 on rent assistance
They spent $10,175,593.03 on capital projects
They spent $1,261,357.20 on operations and maintenance
Table 3: Rent assistance expenditures by jurisdiction
Jurisdiction Total spent Total households served Priority population served
Arlington $22,367.00 17 Financially impacted by the COVID pandemic
Burlington $67,236.83 45 Low-income
Covington $42,544.04 40 Low-income
Garfield County $10,954.00 20 Families with children
Jefferson County $20,096.00 24 Homeless
Kirkland $342,207.63 86 Extremely low-income BIPOC communities
Longview $58,500.00 31 Not reported
Mercer Island $33,160.93 25 70% or lower AMI households
Poulsbo $8,500.00 13 Low-income
Shoreline $28,304.70 11 Low-income
Stanwood $4,586.00 No data No data
Tukwila $54,962.00 48 Low-income
Whatcom County $21,157.81 3 Families with children, young adults
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 7
Table 4: Capital project expenditures by jurisdiction
Jurisdiction Total spent Activity New projects and units
Anacortes $971,059.35 New construction Two projects (40 units) are under construction
Three projects (80 units) under contract
One project (12 units) is under construction
Clark County $600,000.00 Acquisition only One project (40 units) is newly in service with
affordability covenants of 26-30 years, 20 units
reserved for extremely low-income
Ellensburg $750,000.00 Acquisition only Three projects (90 units) under contract
Everett $226,451.00 New construction One project (20 units) is under construction
Fife $115,000.00 No data No data
Grant County $323,900.00 Rehabilitation only One project (12 units) under contract
One project under contract
Okanogan County $166,643.00 New construction
Two projects (24 units) are under construction
Poulsbo $6,058.85 New construction No data
One project (112 units) is under construction
Seattle $6,993,063.83 New construction One project (92 units) is newly in service with
affordability covenants of 31+ years
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 8
Table 5: Operations and maintenance expenditures by jurisdiction
Jurisdictions Total expenditures Units supported
Cashmere $3,845.05 22
Jefferson County $70,964.00 13
King County $60,685.60 92
Marysville $318.50 2
Mason County $50,000.00 No data
Moses Lake $894.31 35
North Bend $17,250.00 No data
Okanogan County $23,417.00 24
Seattle $450,075.66 92
Stanwood $2,232.82 6
Tacoma $118,954.77 15
Vancouver $347,829.83 40
Wenatchee $95,139.00 20
Whatcom County $3,938.10 1
Affordability restrictions for new units
Some jurisdictions opt to set income restrictions below the statutory minimum and apply long-term
affordability covenants to their respective capital project portfolios. However, many jurisdictions have limited
capacity to report the details of projects placed in service, and such data points often fall outside their
established reporting systems. In addition, smaller cities and counties do not generally have affordable
housing administrators, developers, or managers on their staff. Jurisdictions may need more time to develop
the policies, procedures, partnerships or reporting systems needed to accurately report affordability details
related to housing units funded with tax revenue.
Two jurisdictions reported on affordability restrictions applied to funded units. Clark County supports 40 units
with a 26 to 30-year affordability restriction. Of those units, 20 are reserved for households earning 30% AMI or
less. The City of Seattle supports 92 units with a 31+ year affordability covenant. Those units serve
households experiencing chronic homelessness.
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 9
Appendix A: Chapter 365-240 WAC
Affordable and Supportive Housing - Sales and Use Tax
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 10
2022 AFFORDABLE AND SUPPORTIVE HOUSING SALES AND USE TAX 11
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