§17.7 - Levy and Collection

• Jurisdiction: Washington

§17.7 LEVY AND COLLECTION

Property tax levies and challenges thereto, as well as collection of such taxes, are discussed below.

(1) Limitations on levies

There are three separate limitations on property taxes in this state:

(1)	Nonvoted property taxes cannot under the state constitution exceed one percent of the value of property being assessed. WASH. CONST. art. VII, § 2.
(2)	Nonvoted levies are limited by statute to approximately $9.50 for every $1,000 of assessed valuation. RCW 84.52.043.
(3)	No taxing district can levy taxes in any year an amount greater than a formulary "limit factor" that is capped at 101 percent of the prior year's levy, subject to an adjustment for new construction. Ch. 84.55 RCW.

(2) State school levies

For most taxing districts the levy rate is set at a specified dollar rate for each thousand dollars of assessed valuation of taxable property within the district. The rate is then applied to the assessed valuation of each taxpayer's property. The levy for support of the common (public K-12) schools is calculated differently. Under RCW 84.52.065 the school levy rate applies not to the assessed value but to a value determined by the use of an "indicated ratio"—a ratio determined annually for each county by the DOR. The indicated ratio measures the extent to which local assessors have complied with the constitutional and statutory mandate that they assess all taxable property at 100 percent of its true and fair value. A 95 percent indicated ratio means that, according to the DOR, the county assessor values property at 95 percent of its true and fair value.

The assessed value for all taxable property in a county as determined by the assessor is divided by the DOR's indicated ratio to reach the value to which the school levy rate (exclusive of special levies) is applied. Application of the indicated ratio ordinarily will cause an increase in assessments and taxes. The effect of the application (assuming the accuracy of the indicated ratio) is that the school levy produces a tax that equals what the tax would have been if the assessor had been able to assess all taxable property at the required 100 percent of market value.

The validity of this use of the indicated ratio was upheld in Sator v. Department of Revenue, 89 Wn.2d 338, 572 P.2d 1094 (1977). However, taxpayers may have a remedy if the effect of using the indicated ratio is to raise the taxes on their property (exclusive of port, public utility district, and special levies) to more...