Did Washington’s 1971 lower interest rate apply to property taxes already delinquent?

Plain-English summary

Washington’s AG concluded that a 1971 reduction from 10% to 5% interest applied to the first five hundred dollars of eligible delinquent real-property taxes for a single year, including taxes already delinquent when the amendment took effect. The rate in force when payment was tendered governed. The AG also concluded that the new rate would remain in force until the legislature changed it again.

“the interest rate on delinquent taxes is to be computed on the basis of the law which is in effect when tender of payment is made.” (Official opinion)

Currency note

This opinion was issued in 1971. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Property taxpayers

At the time, the reduced rate covered no more than five hundred dollars of delinquent real-property taxes for a single year. The opinion said it applied to payments tendered after the 1971 amendment took effect, even when the tax had become delinquent earlier. The opinion did not extend the 5% rate to unpaid personal-property taxes or the balance above five hundred dollars.

County treasurers

The AG relied on the payment-date principle drawn from Henry v. McKay. The opinion treated the rate in force at tender as the one used to calculate delinquent-tax interest.

Common questions

Q: Did the rate reduction reach taxes that were already delinquent?
A: Yes, for eligible payments tendered on or after the amendment took effect.

Q: Did 5% apply to the entire tax bill?
A: No. The opinion limited that rate to the first five hundred dollars of delinquent real-property taxes for a single year.

Q: When would the reduced rate end?
A: The AG said it would continue until the legislature acted again.

Background and statutory framework

The 1971 amendment to RCW 84.56.020 set 5% annual interest on up to five hundred dollars of delinquent real-property taxes for one year and 10% on the remaining unpaid taxes and unpaid personal-property taxes. The AG read the amendment with Henry v. McKay, which made the law effective at tender of payment decisive.

Citations and references

The opinion applied RCW 84.56.020 and discussed Henry v. McKay, 164 Wash. 526, 3 P.2d 145 (1931).

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/taxation-real-and-personal-property-interest-rate-effect-amendment-statute-0

Original opinion text

Attorney General Slade Gorton

TAXATION ‑- REAL AND PERSONAL PROPERTY ‑- INTEREST RATE ‑- EFFECT OF AMENDMENT OF STATUTE

(1) The amendatory reduction of the interest rate on delinquent property taxes for the first five hundred dollars of such taxes for a single year (from a rate of 10% to a rate of 5%) contained in § 3, chapter 288, Laws of 1971, 1st Ex. Sess., applies to taxes which were already delinquent prior to the effective date thereof.

(2) This reduced interest rate on delinquent taxes will continue into future years, until and unless the legislature acts again in this area.

July 28, 1971

Honorable R. Ted Bottiger
State Representative, 29th District
8849 Pacific Avenue
Tacoma, Washington 98444

Cite as: AGO 1971 No. 22

Dear Sir:

This is written in response to your recent request for an opinion of this office regarding the application of § 3, chapter 288, Laws of 1971, 1st Ex. Sess., relating to the rate of interest payable on delinquent property taxes. Your questions are as follows:

(1) Does the amendatory reduction of the interest rate on delinquent property taxes for the first five hundred dollars of such taxes for a single year, from a rate of 10% to a rate of 5%, apply to taxes which were already delinquent prior to the effective date of the act?

(2) Does this reduced interest rate on delinquent taxes continue into future years?

ANALYSIS

We answer both of the foregoing questions in the affirmative for the reasons set forth in our analysis.

[[Orig. Op. Page 2]]

By its enactment of § 3, chapter 288, Laws of 1971, 1st Ex. Sess., which became effective upon approval by the governor on May 21, 1971, the legislature again amended RCW 84.56.020, relating to the collection of property taxes, so as to cause it to read, in material part, as follows:

". . . All taxes upon real and personal property made payable by the provisions of this title shall be due and payable to the treasurer as aforesaid on or before the thirtieth day of April in each year, after which date they shall become delinquent, and interest at the rate of five percent per annum on not more than five hundred dollars of delinquent taxes on real property for a single year in any county shall be charged and interest at the rate of ten percent per annum shall be charged uponthe balance of such unpaid taxes and upon unpaid personal property taxes from the date of delinquency until paid: PROVIDED, That when the total amount of tax on any lot, block or tract of real property payable by one person is ten dollars or more, and if one‑half of such tax be paid on or before the said thirtieth day of April, then the time for payment of the remainder thereof shall be extended and said remainder shall be due and payable on or before the thirty-first day of October following, after which date such remaining one‑half shall become delinquent, and interest at the rate offive percent per annum on not more than five hundred dollars of delinquent taxes for a single year in any county shall be charged and interest at the rate of ten percent per annum shall be charged upon the balance of said remainder from the date of delinquency until paid: . . ." (Amendatory language underscored.)

In your letter, you made reference to a previous opinion of this office, AGO 1969 No. 11 [[to Prosecuting Attorney, Pierce County on June 11, 1969]](copy enclosed), in which we dealt with a 1969 amendment to the provisions of RCW 84.56.020,supra, whereby the interest rate on delinquent taxes wasraised from 8 to 10 percent per annum. We believe that [[Orig. Op. Page 3]] the reasoning of that opinion is determinative of the first question raised by your present request. In essence, relying upon the decision of the Washington supreme court in Henry v. McKay, 164 Wash. 526, 3 P.2d 145 (1931), we there concluded that the new, 10% interest rate was applicable to all taxes which were delinquent as of the effective date of the 1969 amendment. The critical point which was discerned from the court's decision in Henry v. McKay, was that the interest rate on delinquent taxes is to be computed on the basis of the law which is in effect when tender of payment is made.1/

From this it follows, in view of the further amendments to RCW 84.56.020 which are contained in § 3, chapter 288, Laws of 1971, 1st Ex. Sess., supra, that any tenders of delinquent taxes made on or after the effective date of this 1971 amendatory act will, likewise, be governed by the interest rates contained therein.2/ Moreover, turning now to your second question, we can see no basis for arriving at any conclusion other than that these new interest rates will remain in effect for all delinquent taxes paid at any time in the future, until and unless the legislature act again in this area.

We trust that the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

PHILIP H. AUSTIN
Deputy Attorney General

*** FOOTNOTES ***

1/Notably the court in that case, as here, was faced with a statutory decrease in the penalty interest rate on delinquent property taxes.

2/We should point out, however, that the special reduced interest rate of 5% per annum only applies as against the delinquent taxes ‑ not exceeding five hundred dollars in amount ‑ which have been levied on the subject real property for a single year.