Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Local Tax Remittance topic
No spam. Unsubscribe anytime.
Bill would let cities, counties offer local sales-tax remittance to spur affordable housing
Summary
The proposed substitute to HB 17-17 would let a city or county adopt a local sales-and-use tax remittance program that refunds 100% of local sales tax paid on construction of qualifying affordable housing after certificate of occupancy; qualifying projects must dedicate at least 50% of units to low- or moderate-income households for 40 years. Supporters say the tool would help nonprofit builders close funding gaps.
A bill before the House Finance Committee would give cities and counties a local tool to reduce construction costs for affordable housing.
The proposed substitute to House Bill 17-17 authorizes a city or county legislative authority to adopt a resolution creating a local sales-and-use tax remittance program that refunds 100% of local sales tax paid for materials, labor and services on qualifying affordable or mixed-use projects. Christina King, staff to the committee, told members the remittance is granted after a certificate of occupancy and applies only to taxes levied within the adopting jurisdiction.
Supporters said the program could be decisive for nonprofits and smaller developers operating on tight margins. "This bill is a targeted, fiscally responsible way to help reduce development costs for affordable homeownership and encourage more units to be built," said Ryan Donahue of Habitat for Humanity Seattle King and Kittitas Counties.
The substitute sets a baseline affordability requirement of a minimum of 50% of residential units dedicated to low- or moderate-income households and requires that those units remain affordable for at least 40 years; cities and counties may require more restrictive terms if they choose. Eligible organizations include nonprofit and for-profit developers, public housing authorities and other applicants defined by rules of the Housing Finance Commission. The bill requires eligible organizations to submit compliance reports to the adopting local government and the Department of Revenue, and it triggers repayment of remitted taxes if a project is found out of compliance.
Advocates testifying in favor described concrete examples where relatively small savings can close funding gaps. "Small cost savings play a role in making that possible," Donahue said, citing Habitat projects that benefitted from targeted cost reductions. Testimony from Tacoma Pierce County Habitat noted it costs roughly $400,000–$450,000 to build a three-bedroom house that the nonprofit sells below market price, and that local remittances could be reinvested into future affordable units.
Christina King told the committee a tax-preference performance statement, a 10-year expiration and a JLARC review are included; JLARC would evaluate units created and report back by Dec. 31, 2034. Committee members asked about local administration and pre-approval of eligible organizations; King said local governments must approve applicants ahead of remittance.
The committee heard broad support from cities, counties and affordable-housing providers but recorded no formal vote during the session. The hearing concluded and the committee moved on to other business.
No formal action on HB 17-17 was recorded in the transcript.
