H-4573              _______________________________________________

 

                                          SUBSTITUTE HOUSE BILL NO. 1892

                        _______________________________________________

 

State of Washington                              49th Legislature                              1986 Regular Session

 

By House Committee on Energy & Utilities (originally sponsored by Representatives Locke and Vander Stoep)

 

 

Read first time 2/7/86 and passed to Committee on Rules.

 

 


AN ACT Relating to the taxation of telecommunications services by cities; amending RCW 35.21.714 and 35A.82.060; adding new sections to chapter 35.21 RCW; adding new sections to chapter 35A.82 RCW; and providing an effective date.

 

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

 

        Sec. 1.  Section 10, chapter 144, Laws of 1981 as amended by section 37, chapter 3, Laws of 1983 2nd ex. sess. and RCW 35.21.714 are each amended to read as follows:

          Any city which imposes a license fee or tax upon the business activity of engaging in the telephone business, as defined in RCW 82.04.065, which is measured by gross receipts or gross income may impose the fee or tax, if it desires, on one hundred percent of the total gross revenue derived from intrastate toll telephone services subject to the fee or tax:  PROVIDED, That the city shall not impose the fee or tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services ((for which rates are contained in tariffs filed with the federal communications commission)).

 

          NEW SECTION.  Sec. 2.  A new section is added to chapter 35.21 RCW to read as follows:

          Notwithstanding RCW 35.21.714 or 35A.82.060, any city or town which imposes a tax upon business activities measured by gross receipts or gross income from sales, may impose such tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll services.  Such tax shall be levied at the same rate as is applicable to other competitive telephone service as defined in RCW 82.04.065.

 

          NEW SECTION.  Sec. 3.  A new section is added to chapter 35.21 RCW to read as follows:

          A city or town required by RCW 35.21.870(2) to reduce its rate of taxation on telephone business may defer for one year the required reduction in rates for the year 1987.  In each succeeding year, the city or town shall reduce the rate by one-tenth of the difference between the tax rate on April 20, 1982, and six percent.

 

        Sec. 4.  Section 11, chapter 144, Laws of 1981 as amended by section 38, chapter 3, Laws of 1983 2nd ex. sess. and RCW 35A.82.060 are each amended to read as follows:

          Any code city which imposes a license fee or tax upon the business activity of engaging in the telephone business, as defined in RCW 82.04.065, which is measured by gross receipts or gross income may impose the fee or tax, if it desires, on one hundred percent of the total gross revenue derived from intrastate toll telephone services subject to the fee or tax:  PROVIDED, That the city shall not impose the fee or tax on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll telephone services, or for access to, or charges for, interstate services ((for which rates are contained in tariffs filed with the federal communications commission)).

 

          NEW SECTION.  Sec. 5.  A new section is added to chapter 35A.82 RCW to read as follows:

          Notwithstanding RCW 35.21.714 or 35A.82.060, any city or town which imposes a tax upon business activities measured by gross receipts or gross income from sales, may impose such tax  on that portion of network telephone service, as defined in RCW 82.04.065, which represents charges to another telecommunications company, as defined in RCW 80.04.010, for connecting fees, switching charges, or carrier access charges relating to intrastate toll services.  Such tax shall be levied at the same rate as is applicable to other competitive telephone service as defined in RCW 82.04.065.

 

          NEW SECTION.  Sec. 6.  A new section is added to chapter 35A.82 RCW to read as follows:

          A city or town required by RCW 35.21.870(2) to reduce its rate of taxation on telephone business may defer for one year the required reduction in rates for the year 1987.  In each succeeding year, the city or town shall reduce the rate by one-tenth of the difference between the tax rate on April 20, 1982, and six percent.

 

          NEW SECTION.  Sec. 7.     The joint select committee on telecommunications shall study the degree to which cities and towns are able to uniformly assess their telephone business utility taxes upon all similarly taxable events within the individual jurisdiction.  Such study shall assess how local utility taxes may be implemented to apply equally to similarly located customers served by competing intrastate toll service providers.  The study shall determine if state agencies may be of assistance to cities and towns in identifying the providers of telephone services which are subject to locally levied utility taxes.  The committee shall report its findings and recommendations to the legislature by January 1, 1987.

 

          NEW SECTION.  Sec. 8.     Sections 1, 2, 4, and 5 of this act shall take effect on January 1, 1987.