What is old is new again. A bill to re-institute the annexation sales tax credit to provide resources to facilitate and incentivize annexations awaits being pulled to the House floor for a vote. This bill came out of the GMA Collaborative Roadmap process
and was recommended unanimously.
HB 1425 applies to all cities and counties and is triggered by an inter-local agreement between a city and county. Cities
can receive:
- 1/10th of one percent sales tax credit for annexations of more than 2,000 in population but less than 10,000.
- 2/10th of one percent sales tax credit for annexations of more than 10,000 in population.
The bill has been amended twice. The as-passed committee version:
- Requires an interlocal agreement for annexed areas in which a sales and use tax is imposed to address certain criteria regarding loss and gain of revenue, development and ownership of infrastructure, and revenue-sharing agreements.
- Removes the requirement that a city commence annexation prior to January 1, 2015, to be eligible for the sales and use tax credit for annexed areas.
- Adds an ending date to impose the tax of July, 1, 2028.
All revenue collected under this sales tax credit may only be used to provide, maintain, and operate municipal services for the annexation area.
Here are two ways you can lend your support for this bill before the House deadline of March 8:
- To send your comments and your position on this bill directly to members in your legislative district, comment here.
- To send a personal note or call, use our legislative directory to reach out to your House delegation.
Talking points:
- The Legislature is extremely focused on housing this year, and this is a tool that will help bring more land into cities so it can be more densely developed.
- This builds on a great annexation method that pushes for coordination and cooperation among cities and counties.