Fiscal Note (Preliminary) — 6034 SB, Document Fees/Excise Tax (Department of Revenue)
Summary
Multiple Agency Fiscal Note Summary for 6034 SB, Document fees/excise tax, which states that this preliminary package is incomplete. The rollup lists Department of Revenue operating expenditures of 32,300 for 2023-25 and 19,400 for 2025-27, and Fiscal note not available for the Board of Tax Appeals. The Department of Revenue narrative states that the bill removes document filing and recording fees received by an abstract, title insurance, or escrow service for remittance to a county filing office from the definition of a retail sale, and also exempts the fees from business and occupation tax. Its assumptions include recording fees of $303.50 per transaction and a statewide average local sales and use tax rate of 2.95%.
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“Fiscal Note (Preliminary) — 6034 SB, Document Fees/Excise Tax (Department of Revenue).”
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Multiple Agency Fiscal Note Summary
Bill Number: 6034 SB Title: Document fees/excise tax
Estimated Cash Receipts
Agency Name 2023-25 2025-27 2027-29
GF-State NGF-Outlook Total GF-State NGF-Outlook Total GF-State NGF-Outlook Total
Department of (6,410,000) (6,410,000) (6,419,000) (11,780,000) (11,780,000) (11,797,000) (13,940,000) (13,940,000) (13,961,000)
Revenue
Total $ (6,410,000) (6,410,000) (6,419,000) (11,780,000) (11,780,000) (11,797,000) (13,940,000) (13,940,000) (13,961,000)
Agency Name 2023-25 2025-27 2027-29
GF- State Total GF- State Total GF- State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other Fiscal note not available
Local Gov. Total
Estimated Operating Expenditures
Agency Name 2023-25 2025-27 2027-29
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Department of .1 32,300 32,300 32,300 .1 19,400 19,400 19,400 .1 19,400 19,400 19,400
Revenue
Board of Tax Fiscal note not available
Appeals
Total $ 0.1 32,300 32,300 32,300 0.1 19,400 19,400 19,400 0.1 19,400 19,400 19,400
Agency Name 2023-25 2025-27 2027-29
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other Fiscal note not available
Local Gov. Total
Estimated Capital Budget Expenditures
Agency Name 2023-25 2025-27 2027-29
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Department of Revenue .0 0 0 .0 0 0 .0 0 0
Board of Tax Appeals Fiscal note not available
Total $ 0.0 0 0 0.0 0 0 0.0 0 0
FNPID 69234
:
FNS029 Multi Agency rollup
Agency Name 2023-25 2025-27 2027-29
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts
Loc School dist-SPI
Local Gov. Other Fiscal note not available
Local Gov. Total
Estimated Capital Budget Breakout
This preliminary package is incomplete. Other impacted agencies' fiscal notes will be distributed as soon as possible.
Prepared by: Amy Hatfield, OFM Phone: Date Published:
(360) 280-7584 Preliminary 1/17/2024
FNPID 69234
:
FNS029 Multi Agency rollup
Department of Revenue Fiscal Note
Bill Number: 6034 SB Title: Document fees/excise tax Agency: 140-Department of Revenue
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
Account FY 2024 FY 2025 2023-25 2025-27 2027-29
GF-STATE-State (6,000,000) (6,000,000) (11,000,000) (13,000,000)
01 - Taxes 01 - Retail Sales Tax
GF-STATE-State (410,000) (410,000) (780,000) (940,000)
01 - Taxes 05 - Bus and Occup Tax
Performance Audits of Government (9,000) (9,000) (17,000) (21,000)
Account-State
01 - Taxes 01 - Retail Sales Tax
Total $ (6,419,000) (6,419,000) (11,797,000) (13,961,000)
Estimated Expenditures from:
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 0.1 0.2 0.2 0.1 0.1
Account
GF-STATE-State 001-1 10,900 21,400 32,300 19,400 19,400
Total $ 10,900 21,400 32,300 19,400 19,400
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
X Requires new rule making, complete Part V.
Legislative Contact: Clinton McCarthy Phone:
360-786-7319 Date: 01/08/2024
Agency Preparation: Erin Valz Phone:
360-534-1522 Date: 01/17/2024
Agency Approval: Valerie Torres Phone:
360-534-1521 Date: 01/17/2024
OFM Review: Amy Hatfield Phone:
(360) 280-7584 Date: 01/17/2024
Request # 6034-1-1
Form FN (Rev 1/00) 190,742.00 1 Bill # 6034 SB
FNS062 Department of Revenue Fiscal Note
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.
CURRENT LAW:
The definition of a retail sale includes document filing and recording fees.
PROPOSAL:
This bill removes document filing and recording fees received by an abstract, title insurance, or escrow service for
remittance to a county filing office from the definition of a retail sale, thus exempting such fees from the retail sales tax.
Additionally, this bill exempts these fees from business and occupation tax.
EFFECTIVE DATE:
The bill takes effect 90 days after the adjournment of session and applies retroactively to disputed assessments pending
before the Department of Revenue (department), board of tax appeals, or any court of law.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate,
the detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived.
Explanation of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.
ASSUMPTIONS
- Recording fees are $303.50 per transaction.
- Local revenue estimates use the statewide average local sales and use tax rate of 2.95%.
- The department receives the taxes from monthly taxpayers the month after the business collects the sales tax from the
consumer. Most local tax distributions occur the month after the department receives sales and use taxes that businesses
collect. This leads to a one-month delay in revenues for the state and a two-month delay in revenues for local jurisdictions.
- If this bill does not pass, the unpaid tax amounts under administrative review will be paid in fiscal year 2025.
- Article VIII, sections 5 and 7 of the Washington constitution do not allow a gift of public funds. The department believes
the prohibition against the gifting of public funds prevents it from granting refunds to taxpayers who properly paid the taxes
before the effective date of this bill. [See Seattle-King County Council of Camp Fire v. Dept. of Revenue, 105 Wn.2d 55
(1985); City of Yakima v. Huza, 67 Wn.2d 351, 407 P.2d 815 (1965)].
- This legislation takes effect June 4, 2024, impacting 12 months of state collections and 11 months of local collections in
fiscal year 2025.
DATA SOURCES
- Department of Revenue, Excise tax data
- Economic and Revenue Forecast Council, November 2023 forecast
- United States Census Bureau, Annual Estimates of the Resident Population for the United States, Regions, States, District
of Columbia and Puerto Rico: April 1, 2020, to July 1, 2023 (NST-EST2023-POP)
- Consumer Finance Protection Bureau, Summary of 2021 Data on Mortgage Lending
REVENUE ESTIMATES
This bill decreases state revenues by an estimated $6.4 million in the 12 months of impacted collections in fiscal year 2025,
and by $5.4 million in fiscal year 2026.
This bill decreases local revenues by an estimated $2.4 million in the 11 months of impacted collections in fiscal year 2025,
and by $2.0 million in fiscal year 2026, the first full year of impacted collections.
TOTAL REVENUE IMPACT:
Request # 6034-1-1
Form FN (Rev 1/00) 190,742.00 2 Bill # 6034 SB
FNS062 Department of Revenue Fiscal Note
State Government (cash basis, $000):
FY 2024 - $ 0
FY 2025 - ($ 6,419)
FY 2026 - ($ 5,378)
FY 2027 - ($ 6,419)
FY 2028 - ($ 6,460)
FY 2029 - ($ 7,501)
Local Government, if applicable (cash basis, $000):
FY 2024 - $ 0
FY 2025 - ($ 2,440)
FY 2026 - ($ 2,000)
FY 2027 - ($ 3,000)
FY 2028 - ($ 3,000)
FY 2029 - ($ 3,000)
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.
ASSUMPTIONS:
This estimate affects 2,200 taxpayers.
FIRST YEAR COSTS:
The department will incur total costs of $10,900 in fiscal year 2024. These costs include:
Labor Costs – Time and effort equate to 0.09 FTE.
- Create a special notice and update publications and information on the department's website.
SECOND YEAR COSTS:
The department will incur total costs of $21,400 in fiscal year 2025. These costs include:
Labor Costs – Time and effort equate to 0.2 FTE.
- Implementation meetings, review guidance, internal education, and work with taxpayers.
- Amend one excise tax advisory.
- Amend two expedited rules.
ONGOING COSTS:
Ongoing costs for the 2025-27 biennium equal $19,400 and include similar activities described in the second-year costs. Time
and effort equate to 0.1 FTE.
Request # 6034-1-1
Form FN (Rev 1/00) 190,742.00 3 Bill # 6034 SB
FNS062 Department of Revenue Fiscal Note
Part III: Expenditure Detail
III. A - Expenditures by Object Or Purpose
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 0.1 0.2 0.2 0.1 0.1
A-Salaries and Wages 6,800 13,100 19,900 12,800 12,800
B-Employee Benefits 2,200 4,400 6,600 4,200 4,200
E-Goods and Other Services 1,300 2,700 4,000 1,800 1,800
J-Capital Outlays 600 1,200 1,800 600 600
Total $ $10,900 $21,400 $32,300 $19,400 $19,400
III. B - Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I and Part IIIA.
Job Classification Salary FY 2024 FY 2025 2023-25 2025-27 2027-29
EMS BAND 4 131,684 0.0 0.0
EMS BAND 5 153,836 0.0 0.0
EXCISE TAX EX 3 64,092 0.1 0.1 0.1 0.1
MGMT ANALYST4 76,188 0.0 0.0
TAX POLICY SP 2 78,120 0.1 0.0 0.0
TAX POLICY SP 3 88,416 0.0 0.0 0.0
TAX POLICY SP 4 95,184 0.0 0.0
WMS BAND 2 98,456 0.0 0.0
WMS BAND 3 111,992 0.0 0.0
Total FTEs 0.1 0.2 0.2 0.1 0.1
III. C - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE
Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.
Should this legislation become law, the department will use the expedited process to amend WAC 458-20-156-Rule, titled:
"Abstract, title insurance and escrow businesses" and WAC 458-20-164-Rule, titled: "Insurance producers, adjusters-Title
insurance agents-Surplus line brokers." Persons affected by this rulemaking would include abstract, title insurance, and escrow
businesses.
Request # 6034-1-1
Form FN (Rev 1/00) 190,742.00 4 Bill # 6034 SB
FNS062 Department of Revenue Fiscal Note
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