Ordinance 20-002 Sales & USe Tax Credit CITY OF SPOKANE VALLEY
SPOKANE COUNTY,WASHINGTON
ORDINANCE NO.20-002
AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY,
WASHINGTON, ADOPTING CHAPTER 3.06 OF THE SPOKANE VALLEY
MUNICIPAL CODE AUTHORIZING A SALES AND USE TAX CREDIT FOR
AFFORDABLE AND SUPPORTIVE HOUSING PURSUANT TO RCW 82,14.540, AND
OTHER MATTERS RELATING THERETO.
WHEREAS, the City of Spokane Valley is a non-charter code city pursuant to Title 35A RCW,
and is a municipal corporation pursuant to the laws of the state of Washington; and
WHEREAS, in the 2019 Regular Session, the Washington State Legislature approved Substitute
House Bill 1406(Chapter 338,Laws of 2019), which was later codified as RCW 82.14.540; and
WHEREAS, RCW 82.14.540 authorizes the governing body of a city to impose a local sales and
use tax for the acquisition, construction, or rehabilitation of affordable housing or facilities providing
supportive housing. The first.0073 percent available is credited back to the City by the State of Washington
from existing state sales and use tax receipts originating from sales within the City; and
WHEREAS, because this sales and use tax will be credited against sales and use taxes collected
within the City of Spokane Valley by the State of Washington,it will not result in higher sales and use taxes
within the City if limited to .0073 percent. Instead, it will represent an additional source of funding to
address affordable and supportive housing needs within the City as contemplated by the Legislature in
adopting RCW 82.14.540; and
WHEREAS,pursuant to RCW 82.14.540(7),revenue received from imposition of the sales and use
tax shall be used to assist persons whose income is at or below 60 percent of Spokane County's median
income; and
WHEREAS, the City has determined that there is a need for additional affordable housing in the
City, and that imposing the sales and use tax to address this need will benefit its citizens; and
WHEREAS, in order for a city to impose the sales and use tax permitted by RCW 82.14.540, that
city must pass a resolution of intent to authorize the maximum capacity of the tax, and then adopt an
enabling ordinance no later than July 28,2020 to authorize imposition of the maximum capacity of the tax;
and
WHEREAS, on September 6,2019,the Spokane Valley City Council approved Resolution 19-013
declaring the City's intent to adopt legislation to authorize a sales and use tax for use for affordable and
supportive housing pursuant to RCW 82.14.540; and
WHEREAS, RCW 82.14.540 allows cities and counties to enter into interlocal agreements with
other cities, counties, and public housing authorities to pool the sales and use tax received by the agreeing
entities to be able to consider larger qualifying projects. There have been discussions among the City,the
City of Spokane, Spokane County, and Spokane Housing Authority regarding the potential for such an
agreement, although one has not been reached to date; and
WHEREAS,pursuant to RCW 82.14.540,participating cities may also adopt a specified qualifying
local tax for the purpose of receiving a second state sales and use tax credit of.0073 percent. Any qualifying
Ordinance 20-002-Sales and Use Tax for Affordable Housing Page 1 of 3
local tax for an additional .0073 percent sales and use tax credit from the Washington State Department of
Revenue would require adoption of a separate ordinance from this Ordinance; and
WHEREAS,this Ordinance constitutes the necessary legislative action to authorize a sales and use
tax credit of state tax funds from the Washington State Department of Revenue for use by the City for
qualifying expenses related to acquisition, construction, or rehabilitation of affordable housing or facilities
providing supportive housing.
NOW, THEREFORE, the City Council of the City of Spokane Valley ordains as follows:
Section 1. Findings. The City Council hereby finds that the recitals set forth above are hereby
adopted as findings for this Ordinance and incorporated herein as such.
Section 2. Adoption. Chapter 3.06 SVMC relating to imposition of a sales and use tax for
affordable and supportive housing expenses as authorized by RCW 82.14.540 is hereby adopted as set forth
below:
3.06 SALES AND USE TAX FOR AFFORDABLE AND SUPPORTIVE HOUSING
3.06.010—Imposition of Sales and Use Tax for Affordable and Supportive Housing.
(A) Tax imposed. There is imposed a sales and use tax pursuant to RCW 82.14.540 upon every taxable
event, as defined in chapter 82.14 RCW, occurring within the City of Spokane Valley. The tax shall be
imposed upon and collected from those persons from whom the Washington State sales or use tax is
collected pursuant to chapters 82.08 and 82.12 RCW as adopted or amended.
(B) Tax Rate. The rate of the sales and use tax imposed by SVMC 3.06.010 shall be .0073 percent of the
selling price or value of the article used,and shall expire 20 years from the date on which it is first imposed,
or at such time as allowed by law. In the event the City adopts a qualifying local tax pursuant to RCW
82.14.540(1)(e) as adopted or amended,then the sales and use tax imposed by SVMC 3.06.010(B) may be
increased by an additional .0073 percent, or as otherwise authorized by RCW 82.14.540 as adopted or
amended.
(C) Deduction from State Tax Receipts. The sales and use tax imposed pursuant to SVMC 3.06.010 shall
be deducted from the amount of tax otherwise required to be collected or paid to the Washington State
Department of Revenue pursuant to chapters 82.08 or 82.12 RCW as adopted or amended. The Department
of Revenue shall perform the collection of such taxes on behalf of the City and remit any qualifying funds
to the City at no cost to the City. The maximum amount to be received by the City from this sales and use
tax credit in each year shall be equal to the taxable retail sales within the City limits in state fiscal year 2019
multiplied by the tax rate or such other amount as allowed by law. The City Manager is authorized to enter
into or modify any agreement with the Department of Revenue for the administration of this tax.
3.06.020—Use of Tax Receipts.
Revenue received by the City from the sales and use tax authorized by chapter 3.06 SVMC shall be used
for the purposes set forth in RCW 82.14.540 as adopted or amended,which may include use of authorized
funds in conjunction with one or more regional governmental entities through an interlocal agreement. Any
such use of pooled funds pursuant to interlocal agreement shall also comply with all requirements of RCW
82.14.540 as adopted or amended.
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Section 3. Severability. If any section, sentence, clause, or phrase of this Ordinance shall be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of any other section,sentence, clause, or
phrase of this Ordinance.
Section 4. Effective Date. This Ordinance shall be in full force and effect five days after
publication of this Ordinance or summary thereof in the official newspaper of the City of Spokane Valley
as provided by law.
Passed by the City Council this 18"day of February, 2020.
Ben Wick,Mayor
ATTEST:
Christine Bainbridge, City Clerk
Approved as to Form:
I +
Office ofr e City Attorney
Date of Publication: 2GJ" d aO
Effective Date: --9 -- oldc;26
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