Skip to main content
Advertising

Originally published June 12, 2013 at 6:11 PM | Page modified June 12, 2013 at 8:56 PM

  • Share:
           
  • Comments (16)
  • Print

Deadline on estate-tax fix looms in Olympia

The state Department of Revenue is preparing to send out millions of dollars in tax refunds in response to a Supreme Court ruling — unless lawmakers who returned Wednesday for a second special legislative session take quick action.

The Associated Press

Most Popular Comments
Hide / Show comments
The state need to give back money that it took illegally. It's a simple as that. MORE
The Times is missing the point. The so called "fix" is really a retroactive... MORE
This is a long standing and long known issue. Fixing it has always been easy to do... MORE

advertising

OLYMPIA — The state Department of Revenue is preparing to send out millions of dollars in tax refunds in response to a Supreme Court ruling — unless lawmakers who returned Wednesday for a second special legislative session take quick action.

A potential legislative fix is detailed in one of the bills the state Senate majority has offered in exchange for support of reform bills.

Officials said the state could have to pay out $160 million over the next two years if the fix isn’t made to the law. The figure includes more than $92 million in refunds, nearly $5 million in cancellation of assessments that haven’t yet been paid, and $63 million less in future collections through the middle of 2015.

Senate leaders say they’re close to a deal, and the House said a vote could come Thursday, just in time to prevent the first $13 million the state agency says it must send to 10 estates unless a measure is passed and signed into law.

Additional checks were being processed to be sent out in coming weeks.

“Once the refunds go out, it’s hard to stop that flow,” said House Majority Leader Pat Sullivan, D-Covington. Sullivan said he hoped there would be an agreement with the Senate by Thursday, but either way, the House would take a vote. “We’ve got to get this done.”

Lawmakers want a legislative workaround to last year’s ruling by the state Supreme Court, which determined the estate tax did not apply to married couples who had used a certain type of trust in their estate planning.

The Department of Revenue says it has already received 70 refund requests totaling more than $40 million from estates that had paid the taxes before the court ruling. Others have gone to court to seek refunds.

The House previously passed a bill closing the marital trust exemption, and the Senate has offered a bill that does the same while also increasing the tax on the largest estates and creating an additional exemption for family-owned businesses.

“This gives us a chance to correct a wrong by the court and do something for small family businesses,” said Senate Republican Leader Mark Schoesler, R-Ritzville. “I think we’re very, very close.”

Mike Gowrylow, a spokesman for the Department of Revenue (DOR), said lawmakers have been told that to prevent the first of the refunds being sent out, action must be taken before a 9 a.m. Friday court hearing involving an estate seeking a refund.

Judges previously have ordered the DOR to make refunds. In two of the cases, the court has sanctioned the department for opposing the refund requests and ordered it to pay attorney fees to plaintiffs.

“To reduce or eliminate the risk of additional sanctions, DOR needs to be able to tell the judge at the hearing on Friday either that it has begun issuing refunds or the Legislature has passed and the governor has signed a retroactive law that allows the state to reject the refund requests,” Gowrylow said in an email.

Lawmakers started a second, potentially 30-day special session on Wednesday after adjourning their first special session on Tuesday without a deal on the state operating budget.

They currently face a $1.2 billion budget shortfall for the two-year cycle that ends in the middle of 2015 — an amount that doesn’t include money lawmakers are seeking for education in response to a Supreme Court ruling that the state isn’t fulfilling its constitutional obligations.

News where, when and how you want it

Email Icon

Meet the winemakers

Meet the winemakers

View video interviews, conducted by The Seattle Times wine writer Andy Perdue, profiling five of our state's top winemakers.

Advertising

Partner Video

Advertising

Career Center Blog

Career Center Blog

The power of good manners


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►