County closes books on about $64,000 in uncollectable taxes

Nothing in this world is certain except death and taxes.

So the saying goes.

But sometimes, even taxes aren’t certain. Sometimes, the government isn’t able to collect.

On Tuesday, the Spokane County commissioners approved a request from the Spokane County Treasurer’s Office to cancel more than 120 personal property accounts and allow about $64,000 in tax to go uncollected for 2021.

At first glance, those numbers might infuriate taxpayers, even if $64,000 is microscopic in comparison to the county’s $675 million budget. But the situation happens every year, and it’s not the fault of the Treasurer’s Office.

Spokane County collects a host of taxes annually, but property taxes and sales taxes are the top revenue generators.

Property taxes are split into two types.

There’s the kind people pay on the physical buildings and land – real estate – they own.

There are also personal property taxes, which business owners pay on equipment.

“Common examples would be restaurant kitchen equipment; hotel furniture,” said Arthur Whitten, investment and banking officer with the Treasurer’s Office.

Personal property taxes don’t bring local governments as much money as real estate taxes. For comparison, the county assessor’s office looked at 234,959 different property parcels in 2021 and only 11,698 involved personal property. Still, taxes on items such as machinery and furniture generate significant revenue.

It’s the job of the Treasurer’s Office to collect personal property taxes. In most cases, the office is able to collect without an issue.

Businesses come and go, though. They can declare bankruptcy, move or sell off their equipment. In some cases, there’s not much the Treasurer’s Office can do to force people to pay.

Not all of the more than 120 canceled personal property accounts are bankruptcies. Sometimes a business, or its equipment, disappears.

For example, from 2013 through 2021, Brain Freeze Creamery accrued $1,769.29 in unpaid personal property taxes. But the Treasurer’s Office says it can’t locate the business and the business has no funds or assets.

There are also times when the value of a business’ personal property is so small it’s more expensive to collect the tax than not. For example, Washington’s Finest Cannabis racked up a measly $23.88 in personal property taxes from 2020 through 2021, so the Treasurer’s Office decided it’d make more sense to simply close that account.

To a large extent, this year’s list of closed accounts is a compilation of local businesses that have shuttered in the past year. The gloomy list of names includes landscaping companies, coffee shops, laser tag operations, spas and carpet cleaning businesses, to name a few.

The vast majority of the closed accounts owe the county less than $2,000 in personal property tax.