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Potential Tax Liability - Length of Time in Classification

When land is classified as either farm and agricultural land, open space, or timber land, it shall not be applied to any other use for a period of not less than ten years unless transferred or reclassified into another current use classification or an early withdrawal penalty will apply. The land continues in current use classification after the ten year period until a request for withdrawal is made by the owner, the use of land no longer complies, or the ownership has changed and the new owner has not signed a Notice of Continuance. The notice of classification is recorded with the county auditor in the same manner as the recording of state tax liens on real property.

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Sale of Classified Land                                                   

When classified land is sold, the seller or transferor becomes liable at the time of sale for the additional tax, interest, and penalty unless the new owner(s) signs the Notice of Continuance which is attached to or shown on the excise tax affidavit. The county auditor shall not accept an instrument of conveyance on any classified land unless the Notice of Continuance has been signed or the additional tax had been paid. The assessor shall determine if the land qualifies for continued classification.

Owner May Request Withdrawal

If the owner intends to withdraw all or a portion of the land from classification after ten years, two years prior notice must be given to the county assessor. This notice can be filed after the eighth assessment year of the initial ten year classification period. If a portion of a parcel is removed from classification, the remaining portion must meet the requirements of original classification unless the remaining parcel has different income criteria.

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Action on Withdrawal                                                      

Upon receipt of a request for withdrawal, the assessor shall notify the legislative authority which originally approved the classification and, when two years have elapsed, the assessor shall withdraw the land from classification. The land which is withdrawn from classification shall be subject to an additional tax equal to the difference between the amount of tax paid under the classification and the tax at true and fair value for the last seven years, plus interest at the statutory rate charged on delinquent property taxes.

Owner to Notify Assessor of Change in Use

An owner changing the use of land from a classified use must notify the county assessor within sixty days of this action. The assessor shall remove the land from classified status and impose and additional tax equal to the difference between the tax paid on current use value and the tax that would have been paid on that land had it not been so classified, payable for the last seven years, plus interest at the same rate  as charged on delinquent property taxes, plus a penalty of twenty percent of the total amount.

Taxes Allocated to Portion of Year

Assessed valuation before and after removal of classification shall be listed and allocated according to that part of the year to which each assessed valuation applies.

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Criteria for Classification Continues to Apply After Classification Has Been Granted                                  

Owner of classified land must continue to meet the criteria established for classification or the assessor may remove the land from the current use classification.

After giving the owner written notice and an opportunity to be heard, the assessor may determine that all or a portion of the land no longer meets the criteria for classification.

Removal of Land Classification By County Assessor May Be Appealed

Within thirty days after the removal from classification, the assessor shall notify the owner in writing explaining the reasons for removal. The owner has thirty days following the date the notice was mailed by the assessor to file an appeal of the removal of classification to the County Board of Equalization.

Additional Tax Due

At the time land is removed from classification it becomes subject to any additional tax, applicable interest, and a penalty which shall be due and payable to the county treasurer within thirty days after the owner is notified. The penalty is not imposed if the removal satisfies the ten year requirement.

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Lien of Taxes                                                                     

Any additional tax, applicable interest, and penalty, becomes a lien on the land at the time the land is removed from classification. This lien shall have priority over any other encumbrance on the land. Such lien may be foreclosed upon expiration of the same period after delinquency in the same manner as delinquent real property taxes.

Distribution of Additional Taxes

Upon collection, the additional tax shall be distributed by the county treasurer in the same manner in which current taxes applicable to the subject land are distributed.

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When removal of Land is Not Subject to Additional Tax    

The additional tax, applicable interest, and penalty shall not be imposed if the removal of classification results solely from:

  1. Land is transferred to a government entity in exchange for other land located in the State of Washington;
  2. Land taken through the exercise of the power of eminent domain, or sale or transferred in anticipation of the exercise of such power was received in writing or by other official action;
  3. A natural disaster changes the use of such land;
  4. Official action by the state, county, or city disallows the present use of such land;
  5. Transfer of land to a church when such land would qualify for exemptions granted therein
  6. Acquisition of property interests by state agencies or agencies or organizations qualified under RCW 84.34.210 and 64.04.130 (See RCW 84.34.108(~f)); or
  7. Removal of land classified as farm and agricultural land on which housing for employees and/or principal place of residence is sited.
  8. Removal of land from classification after enactment of a statutory exemption that qualifies the land for exemption and receipt of notice from the owner to remove the land from classification.
  9. The creation, sale, or transfer of forestry riparian easments under RCW 76.13.120
  10. The creation, sale, or transfer of a fee interest or a conservation easement for the riparian open space program under RCW 76.09.040.
  11. The sale or transfer of land within two years after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under chapter 84.33 RCW, or classified under this chapter continuously since 1993.
  12. The sale or transfer of land after the death of the owner of at least a fifty percent interest in the land if the land has been assessed and valued as classified forest land, designated as forest land under chapter 84.33 RCW, or classified under this chapter continuously since 1993 and the sale or transfer takes place within two years after July 22, 2001, and the death of the owner occurred after January 1, 1991.                                                       Top of Page