Washington Issues Guidance on New Tax Preference Transparency Requirements

Washington has issued a reminder on new tax preference transparency requirements. “Tax preference” means an exemption, exclusion, deduction, credit, deferral, or preferential rate for a tax administered by the Department of Revenue.New tax preferences automatically expire in 10 years unless an express expiration date applies. Some tax preferences will automatically expire. If a new tax preference does not have an expiration date, it will automatically expire on January 1 of the calendar year after the calendar year 10 years from the effective date.Tax return information is generally considered confidential. However, the amount claimed by a taxpayer for a new tax preference may be publicly disclosed 24 months after preference is claimed, with some exceptions. The disclosure requirements do not apply to property tax exemptions; tax preferences required by constitutional law; tax preferences where the amount claimed is less than $10,000 per year; annual filers; tax preferences not listed on the combined excise tax return of taxpayers who do not have to electronically file; and taxpayers with a good cause waiver. Taxpayers taking certain tax preferences may apply for a good cause waiver. If granted, tax preference amounts will not be publicly disclosed. For more information, visit the Washington Department of Revenue website (Tax Preference Transparency, Washington Department of Revenue, January 6, 2017)

Posted on March 13, 2017