H-3736              _______________________________________________

                                                   HOUSE BILL NO. 1646

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Representatives Smitherman, Schmidt, Vekich, Zellinsky, Sayan, Fisch and Gallagher

Read first time 1/21/86 and referred to Committee on Ways & Means.

AN ACT Relating to sales and use tax exemptions for motor vehicle and special fuels; reenacting and amending RCW 82.08.0255 and 82.12.0256; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 23, chapter 37, Laws of 1980 as last amended by section 1, chapter 108, Laws of 1983 and by section 2, chapter 35, Laws of 1983 1st ex. sess. and RCW 82.08.0255 are each reenacted and amended to read as follows:

          (1) The tax levied by RCW 82.08.020 shall not apply to sales of:

           (a) Motor vehicle fuel used in aircraft by the manufacturer thereof for research, development, and testing purposes; and

           (b) Motor vehicle and special fuel if:

           (i) The fuel is purchased for the purpose of public transportation and the purchaser is entitled to a refund or an exemption under RCW 82.36.275 or 82.38.080(9); or

          (ii) The fuel is purchased by a private, nonprofit transportation provider certified under chapter 81.66 RCW and the purchaser is entitled to a refund or an exemption under RCW 82.36.285 or 82.38.080(8); or

           (iii) The fuel is purchased by the state or by a local government unit in the state of Washington for use in ferry vessels transporting pedestrians, vehicles, and goods within or outside the territorial waters of the state; or

(iv) The fuel is taxable under chapter 82.36 or 82.38 RCW.

          (2) Any person who has paid the tax imposed by RCW 82.08.020 on the sale of special fuel delivered in this state shall be entitled to a credit or refund of such tax with respect to fuel subsequently established to have been actually transported and used outside this state by persons engaged in interstate commerce.  The tax shall be claimed as a credit or refunded through the tax reports required under RCW 82.38.150.

        Sec. 2.  Section 56, chapter 37, Laws of 1980 as last amended by section 2, chapter 108, Laws of 1983 and by section 3, chapter 35, Laws of 1983 1st ex. sess. and RCW 82.12.0256 are each reenacted and amended to read as follows:

          The provisions of this chapter shall not apply in respect to the use of:

          (1) Motor vehicle fuel used in aircraft by the manufacturer thereof for research, development, and testing purposes; and

          (2) Special fuel purchased in this state upon which a refund is obtained as provided in RCW 82.38.180(2); and

          (3) Motor vehicle and special fuel if:

          (a) The fuel is used for the purpose of public transportation and the purchaser is entitled to a refund or an exemption under RCW 82.36.275 or 82.38.080(9); or

          (b) The fuel is purchased by a private, nonprofit transportation provider certified under chapter 81.66 RCW and the purchaser is entitled to a refund or an exemption under RCW 82.36.285 or 82.38.080(8); or

          (c) The fuel is purchased by the state or by a local government unit in the state of Washington for use in ferry vessels transporting pedestrians, vehicles, and goods within or outside the territorial waters of the state; or

(d) The fuel is taxable under chapter 82.36 or 82.38 RCW:  PROVIDED, That the use of motor vehicle and special fuel upon which a refund of the applicable fuel tax is obtained shall not be exempt under this subsection (3)(((c))) (d), and the director of licensing shall deduct from the amount of such tax to be refunded the amount of tax due under this chapter and remit the same each month to the department of revenue.

NEW SECTION. Sec. 3.     This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect immediately.