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Washington Governor Waives Late Filing Penalties for Alcohol, Marijuana Sellers

Dated Mar. 30, 2020

Citations: 20-26

SUMMARY BY TAX ANALYSTS

In response to COVID-19's economic effect on businesses, Washington Gov. Jay Inslee (D) issued a proclamation prohibiting the Washington State Liquor and Cannabis Board from assessing late filing penalties to its licensees.

The suspension of imposed penalties will be in place through April 22, 2020.

PROCLAMATION BY THE GOVERNOR
AMENDING PROCLAMATION 20-05

Washington State Liquor and Cannabis Board — Penalties

WHEREAS, on February 29, 2020, I issued Proclamation 20-05, proclaiming a State of Emergency for all counties throughout Washington state as a result of the coronavirus disease 2019 (COVID-19) outbreak in the United States and confirmed person-to-person spread of COVID-19 in Washington State; and

WHEREAS, as a result of the continued worldwide spread of COVID-19, its significant progression in Washington State, and the high risk it poses to our most vulnerable populations, I have subsequently issued amendatory Proclamations 20-06, 20-07, 20-08, 20-09, 20-10, 20-11, 20-12, 20-13, 20-14, 20-15, 20-16, 20-17, 20-18, 20-19, 20-20, 20-21, 20-22, 20-23, 20-24, and 20-25, exercising my emergency powers under RCW 43.06.220 by prohibiting certain activities and waiving and suspending specified laws and regulations; and

WHEREAS, the COVID-19 disease, caused by a virus that spreads easily from person to person which may result in serious illness or death and has been classified by the World Health Organization as a worldwide pandemic, has broadly spread throughout Washington State, significantly increasing the threat of serious associated health risks statewide; and

WHEREAS, the COVID-19 pandemic is expected to cause a sustained global economic slowdown, which is anticipated to cause an economic downturn in Washington State resulting in layoffs and reduced work hours for a significant percentage of our workforce and reductions in business activity impacting our commercial sectors that support our state's economic vitality, including severe impacts to the large number of small businesses that make Washington State's economy thrive; and

WHEREAS, the Washington State Liquor and Cannabis Board (WSLCB) administers licensing and enforcement services, including the collection of taxes and fees, for establishments selling alcohol for on and off premises consumption; marijuana production, processing, and retail establishments; and vapor and tobacco products; and

WHEREAS, establishments licensed under the WSLCB are required to timely remit various taxes and fees by a date certain, or a mandatory late payment penalty will be imposed; and

WHEREAS, as a result of the global COVID-19 pandemic, many establishments licensed by the WSLCB are suffering significant economic hardship and in some cases their financial resources are becoming severely limited; and

WHEREAS, while the WSLCB possesses authority to waive penalties for late payment of taxes by specific types of establishments it licenses, it lacks authority to offer similar financial relief for licensed microbreweries, domestic breweries, and beer distributors, as well as wineries and wine distributors, which may adversely affect the economic viability of these taxpayers to continue operating after the COVID-19 crisis ends; and

WHEREAS, the worldwide COVID-19 pandemic and its progression in Washington State continues to threaten the life and health of our people as well as the economy of Washington State, and remains a public disaster affecting life, health, property or the public peace; and

WHEREAS, the Washington State Department of Health (DOH) continues to maintain a Public Health Incident Management Team in coordination with the State Emergency Operations Center and other supporting state agencies to manage the public health aspects of the incident; and

WHEREAS, the Washington State Military Department Emergency Management Division, through the State Emergency Operations Center, continues coordinating resources across state government to support the DOH and local health officials in alleviating the impacts to people, property, and infrastructure, and continues coordinating with the DOH in assessing the impacts and long-term effects of the incident on Washington State and its people.

NOW, THEREFORE, I, Jay Inslee, Governor of the state of Washington, as a result of the above-noted situation, and under Chapters 38.08, 38.52 and 43.06 RCW, do hereby proclaim that a State of Emergency continues to exist in all counties of Washington State, that Proclamation 20-05 and all amendments thereto remain in effect, and that Proclamation 20-05 is amended to waive or suspend specified statutes that prevent, hinder or delay necessary action in coping with economic impacts to certain licensees of the WSLCB resulting from the COVID-19 State of Emergency and to prohibit certain activities by the WSLCB regarding imposition of penalties against certain licensees to help preserve and maintain life, health, property or the public peace.

I again direct that the plans and procedures of the Washington State Comprehensive Emergency Management Plan be implemented throughout state government. State agencies and departments are directed to continue utilizing state resources and doing everything reasonably possible to support implementation of the Washington State Comprehensive Emergency Management Plan and to assist affected political subdivisions in an effort to respond to and recover from the COVID-19 pandemic.

I continue to order into active state service the organized militia of Washington State to include the National Guard and the State Guard, or such part thereof as may be necessary in the opinion of The Adjutant General to address the circumstances described above, to perform such duties as directed by competent authority of the Washington State Military Department in addressing the outbreak. Additionally, I continue to direct the DOH, the Washington State Military Department Emergency Management Division, and other agencies to identify and provide appropriate personnel for conducting necessary and ongoing incident related assessments.

FURTHERMORE, based on the above situation and under the provisions of RCW 43.06.220(2)(g), I also find that strict compliance with the following statutory obligations or limitations will prevent, hinder or delay action in providing relief to certain businesses licensed under RCW 66.24 from specific statutorily imposed penalties by the WSLCB, which relief is necessary for coping with the COVID-19 State of Emergency under Proclamation 20-05, and that the specific provisions of each statute listed below addressing imposition of penalties for failure to timely remit tax payments to the WSLCB are hereby waived and suspended until midnight on April 22, 2020:

1. RCW 66.24.210(1)(b) (late filing penalty provisions only), and

2. RCW 66.24.290(1)(b) (late filing penalty provisions only).

FURTHERMORE, based on the above situation and under the provisions of RCW 43.06.220(1)(h), to help preserve and maintain life, health, property or the public peace, I hereby prohibit the WSLCB from enforcing the specific statutory provisions waived above from February 29, 2020, until midnight on April 22, 2020.

This Proclamation shall not be construed as relieving any WSLCB licensee from its statutory obligations for remitting taxes to the WSLCB.

Violators of this of this order may be subject to criminal penalties pursuant to RCW 43.06.220(5).

Signed and sealed with the official seal of the state of Washington on this 24th day of March, A.D., Two Thousand and Twenty at Olympia, Washington.

By:
Jay Inslee, Governor

BY THE GOVERNOR:

Secretary of State

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