Small businesses in King County can get property values, taxes lowered

Small businesses in King County suffering from the COVID-19 economic impacts can get some relief when it comes to the property tax burden. The county is offering a potential reduction in commercial property values for 2021 that translates to a reduction in property taxes for 2022 — or possibly even sooner, depending on legislation that King County Assessor John Wilson hopes could get passed.

Wilson explained that property taxes for a given year are based on assessed property values on Jan. 1 of the previous year. Since businesses were not yet impacted by COVID-19 on the first day of this year, their lowered values would not come into play until 2021, and taxes would not be reduced in response until 2022.

However, he is hoping this could get moved up in light of the pandemic. Wilson said state law takes other disasters — such as earthquakes, tsunamis, or the current wildfires — into account when making exceptions for lowering property values quickly, but a pandemic is not included.

“We have to set values effective the date of January 1, but as we all know, the world is radically different here in September than it was January 1 of 2020,” Wilson said. “It’s just not fair to ignore that and not say, ‘Look, this has had a significant impact.'”

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Wilson said he regularly sees the devastating effect of COVID-19 on businesses when riding through Seattle neighborhoods on his bike.

“You’re struck at how many businesses are just boarded up — and it’s not the temporary kind of board-up, it’s, ‘I’m out of here, I’ve closed, I quit.’ And that’s tragic,” Wilson said. “So we’re trying to look at, how can we help some of those businesses that are in that kind of precarious situation get through this in a way that doesn’t destroy them or financially cripple them?”

This property value and tax reduction is aimed at local businesses like restaurants, hair and nail salons, fitness or yoga studios, and retail shops — not at Amazon.

“It hits so often these small businesses,” Wilson said. “They don’t have huge financial reserves to turn to, they don’t have a corporate parent.”

While many small business owners do not own their building, they still are often hit with the tax burden through what is called a triple net lease, which requires them to pay their share of the property taxes.

So far, about 100 businesses have applied, though Wilson guesses there are thousands of others that would be eligible for lowered property values. Of those 100, Wilson expects 75 to 80 of them will see reductions in taxes.

Reductions will be determined by comparing costs and revenues between this year and last year, to see how much sales have fallen and how much potential expenses have risen.

“Give us the data we need that justifies that, ‘Look, your building was worth X, or your business was doing X income a year ago and today it’s down to this,'” Wilson said.

Wilson urges all small business and small property owners to go to the assessor’s website and submit their information through the online portal to let the county know about what impacts they have felt. He warns that he will probably not be able to make any changes ahead of the October property tax deadline, but he is still hopeful that 2021 taxes could drop.

If your business has been harmed by one of the recent brush fires, he said you should apply for immediate property tax relief, as you could be eligible for that right away.

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