H-1449              _______________________________________________

 

                                                    HOUSE BILL NO. 920

                        _______________________________________________

 

State of Washington                              49th Legislature                              1985 Regular Session

 

By Representatives Braddock and Brekke

 

 

Read first time 2/8/85 and referred to Committee on Ways & Means.

 

 


AN ACT Relating to revenue and taxation; amending RCW 82.03.130, 82.03.140, and 82.03.180; reenacting and amending 82.08.020; adding a new title to the Revised Code of Washington to be numbered Title 82A RCW; prescribing penalties; and providing an effective date.

 

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

                                                                              PART I

                                                                 GENERAL PROVISIONS

 

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          NEW SECTION.  Sec. 1.  INTENT.              It is the intent of the legislature in adopting this act to provide the necessary revenues for the support of vital state services on a more stable and equitable basis.

                                                                             PART II

                                                                         DEFINITIONS

 

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          NEW SECTION.  Sec. 2.  INTRODUCTORY.             Unless the context clearly requires otherwise, the definitions in this part apply throughout this title.

 

 

          NEW SECTION.  Sec. 3.  ADJUSTED GROSS INCOME.         "Adjusted gross income" means adjusted gross income as determined under the Internal Revenue Code.

 

 

          NEW SECTION.  Sec. 4.  DEPARTMENT.               "Department" means the state department of revenue.

 

 

          NEW SECTION.  Sec. 5.  INDIVIDUAL.      "Individual" means a natural person.

 

 

          NEW SECTION.  Sec. 6.  INTERNAL REVENUE CODE.       "Internal Revenue Code" means the United States Internal Revenue Code of 1954 and amendments thereto, as existing on January 14, 1985.

 

          NEW SECTION.  Sec. 7.  PERSON.             "Person" includes individuals, partnerships, firms, companies, fiduciaries, estates, trusts, and any other group or combination acting as a unit, but does not include corporations.

 

 

          NEW SECTION.  Sec. 8.  RESIDENT.         "Resident" includes:

          (1) An individual who is domiciled in this state unless the individual (a) maintains no permanent place of abode in this state, (b) does maintain a permanent place of abode elsewhere, and (c) spends in the aggregate not more than thirty days of the taxable year in this state; or who is not domiciled in this state but maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the taxable year in this state;

          (2) The estate of a decedent who at the time of death was domiciled in this state;

          (3) A trust created by a will of a decedent who at the time of death was domiciled in this state; and

          (4) An irrevocable trust, the grantor of which was domiciled in this state at the time the trust became irrevocable.  For purposes of this subsection (4), a trust is irrevocable to the extent that the grantor is not treated as the owner thereof under sections 671 through 679 of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 9.  S CORPORATION.             "S corporation" means an S corporation as defined in section 1361 of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 10.  TAXABLE INCOME.       "Taxable income" means federal base income as modified under sections 401 through 407 of this act.

 

 

          NEW SECTION.  Sec. 11.  TAXABLE YEAR.          "Taxable year" means the taxpayer's taxable year as defined under the Internal Revenue Code.

 

 

          NEW SECTION.  Sec. 12.  TAXPAYER.      "Taxpayer" means a person receiving income subject to tax under this title.

 

          NEW SECTION.  Sec. 13.  DEFINITION OF TERMS GENERALLY.                Except as provided in this part, any term used in this title has the same meaning as when used in a comparable context in the Internal Revenue Code.

                                                                            PART III

                                                               DETERMINATION OF TAX

 

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          NEW SECTION.  Sec. 14.  TAX IMPOSED.  A tax is imposed at the rate of three percent on all taxable income received by individuals, estates, and trusts, for each taxable year.

 

          NEW SECTION.  Sec. 15.  CREDIT FOR INCOME TAXES DUE ANOTHER JURISDICTION.      (1) A resident individual, estate, or trust is allowed a credit against the tax imposed under this title for the amount of any income tax imposed by another state, foreign country, or political subdivision thereof on income taxed under this title, subject to the following conditions:

          (a) The credit is allowed only for taxes imposed by the other jurisdiction on net income from sources within that jurisdiction.

          (b) The amount of the credit shall not exceed the smaller of:

          (i) The amount of tax paid to the other jurisdiction on net income from sources within the other jurisdiction; or

          (ii) The amount of tax due under this title multiplied by a fraction.  The numerator of the fraction is the portion of the taxpayer's adjusted gross income subject to tax in the other jurisdiction.  The denominator of the fraction is the taxpayer's taxable income.  The fraction shall never be greater than one.

          (2) If, in lieu of a credit similar to the credit allowed under subsection (1) of this section, the laws of the taxpayer's place of residence contain a provision exempting a resident of this state from liability for the payment of income taxes on income earned for personal services performed in that place, then the director is authorized to enter into a reciprocal agreement with that place providing a similar tax exemption for its residents on income earned for personal services performed in this state.

 

          NEW SECTION.  Sec. 16.  DUAL RESIDENCE.        If an individual is regarded as a resident both of this state and another jurisdiction for personal income tax purposes, the department shall reduce the tax on that portion of the taxpayer's income which is subjected to tax in both jurisdictions solely by virtue of dual residence, if the other taxing jurisdiction allows a similar reduction.  The reduction shall  equal the lower of the two taxes applicable to the income taxed twice multiplied by a fraction.  The numerator of the fraction is the tax imposed by this state on the income taxed twice.  The denominator of the fraction is the tax imposed by both jurisdictions on the income taxed twice.  The fraction shall never be greater than one.

                                                                             PART IV

                                                        TAXABLE INCOME MODIFICATIONS

 

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          NEW SECTION.  Sec. 17.  INTRODUCTORY.           In computing taxable income, modifications shall be made to the taxpayer's adjusted gross income as required under this Part and Part V of this act, unless the modification has the effect of duplicating an item of income or deduction.

 

          NEW SECTION.  Sec. 18.  STATE AND LOCAL BONDS.        To adjusted gross income, add income which has been excluded under section 103 of the Internal Revenue Code in computing adjusted gross income, except interest on obligations of the state of Washington or political subdivisions of the state of Washington.  However, the amount added under this subsection shall be reduced by related expenses not deducted in computing adjusted gross income because of section 265 of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 19.  STATE AND LOCAL INCOME TAXES.       To adjusted gross income, add taxes on or measured by income which have been deducted under section 164 of the Internal Revenue Code in computing adjusted gross income.

 

 

          NEW SECTION.  Sec. 20.  CARRY-OVERS.              To adjusted gross income, add amounts which have been deducted in computing adjusted gross income to the extent the amounts have been carried over from taxable years ending before the effective date of this title.

 

 

          NEW SECTION.  Sec. 21.  FEDERAL BONDS.          From adjusted gross income, deduct, to the extent included in adjusted gross income, income derived from obligations of the United States which this state is prohibited by federal law from subjecting to a net income tax.  However, the amount deducted under this section shall be reduced by any expense, including amortizable bond premium, incurred in the production of such income to the extent the expense has been deducted in calculating adjusted gross income.

 

 

          NEW SECTION.  Sec. 22.  PERSONAL DEDUCTION.            The following deductions from adjusted gross income are allowed:

          (1) Six thousand dollars for each individual taxpayer.

          (2) Six thousand dollars for each individual taxpayer's spouse if the taxpayer is entitled to an exemption for the spouse under section 151(b) of the Internal Revenue Code.

          (3) One thousand dollars for each personal exemption allowed the taxpayer under section 151 (c) through (e)  of the Internal Revenue Code.

          (4) Three thousand dollars for each taxpayer who is a head of household or surviving spouse as determined under section 2 (a) and (b) of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 23.  ADJUSTMENT OF EXEMPTIONS FOR NONRESIDENTS.                Each exemption allowed under section 406 of this act for individual taxpayers who are not residents for the entire taxable year shall be reduced by multiplying the amount of the exemption by a fraction.  The numerator of the fraction is the taxpayer's taxable income.  The denominator of the fraction is the taxpayer's adjusted gross income.  The fraction shall never be greater than one.

 

          NEW SECTION.  Sec. 24.  TAX RETURNS FOR FRACTIONAL YEAR.            (1) If the first taxable year of any taxpayer with respect to which a tax is imposed by this title ends before December 31st of the calendar year in which this title becomes effective (referred to in this section as a fractional taxable year), the taxable income for the fractional taxable year shall be the taxpayer's taxable income for the entire taxable year, adjusted by one of the following methods, at the taxpayer's election:

          (a) The taxable income shall be multiplied by a fraction.  The numerator of the fraction is the number of days in the fractional taxable year.  The denominator of the fraction is the number of days in the entire taxable year.

          (b) The taxable income shall be adjusted, in accordance with rules of the department, so as to include only such income and be reduced only by such deductions as can be clearly determined from the permanent records of the taxpayer to be attributable to the fractional taxable year.

          (2) If an individual taxpayer's taxable income is adjusted under subsection (1) of this section, each exemption allowed under section 410 of this act for the taxpayer shall be reduced by multiplying the amount of the exemption by a fraction.  The numerator of the fraction is the taxpayer's taxable income as adjusted  under subsection (1) of this section.  The denominator of the fraction is the taxpayer's taxable income before adjustment under subsection (1) of this section.  The fraction shall never be greater than one.

 

          NEW SECTION.  Sec. 25.  DISPOSITION, SALE, OR EXCHANGE OF PROPERTY HELD PRIOR TO EFFECTIVE DATE OF SECTION.            Taxable income shall be computed without including any gain or deducting any loss on the disposition, sale, or exchange of property if such gain or loss is attributable to holding the property prior to the effective date of this section.  The portion of gain or loss attributable to the taxpayer's holding period prior to the effective date of this section shall be the ratio that the holding period of the taxpayer expressed in months prior to the effective date of this section bears to the total holding period of the taxpayer expressed in months.  This section applies only to gain or loss which is considered as a capital gain or loss under the Internal Revenue Code for property for which the holding period under the Internal Revenue Code is greater than one year.

          For purposes of this section, a fractional part of a month shall be treated as a full month.

                                                                             PART V

                                           DIVISION OF INCOME, MODIFICATIONS, AND CREDITS

 

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          NEW SECTION.  Sec. 26.  APPORTIONMENT AND ALLOCATION OF INCOME.           (1) For resident individuals all income shall be apportioned and allocated to this state except income which is apportioned or allocated to another state under RCW 82.56.010.

          (2) For nonresident individuals, all income shall be apportioned and allocated to this state if it is not apportioned or allocated to another state under RCW 82.56.010 and is received:

          (a) For the rendition of personal services in this state;

          (b) As a result of the ownership or disposition of any interest in real or tangible personal property located in this state; or

          (c) As a distributive share of the net profits of any unincorporated or S corporation activities conducted in this state.

 

          NEW SECTION.  Sec. 27.  PARTNERSHIPS AND S CORPORATIONS.             (1) Partnerships are not subject to tax under this title.  Partners are subject to tax in their separate or individual capacities.

          (2) S corporations are not subject to tax under this title.  Shareholders of S corporations are subject to tax in their separate or individual capacities.

          (3) The taxable incomes of partners shall be computed by including a share of the modifications under Part IV of this act and the credit allowed under section 302 of this act, if the modification or credit relates to the income of the partnership.  Each partner's share of a modification or credit is the amount of modification or credit multiplied by a fraction.  The numerator of the fraction is the partner's distributive share of partnership income.  The denominator of the fraction is the total partnership income.  The fraction shall never be greater than one.

          (4) The taxable incomes of shareholders shall be computed by including a share of the modifications under Part IV of this act and the credit allowed under section 302 of this act, if the modification or credit relates to the income of the S corporation.  Each shareholder's share of a modification or credit is the amount of modification or credit multiplied by a fraction.  The numerator of the fraction is the shareholder's pro rata share of S corporation income.  The denominator of the fraction is the total S corporation income.  The fraction shall never be greater than one.

          (5) As used in this section:

          (a) "Shareholder" means a shareholder of an S corporation.

          (b) "S corporation income" includes both distributed and undistributed federal taxable income of the S corporation.

          (c) "Pro rata share" means pro rata share as determined under section 1366(a) of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 28.  ESTATES, TRUSTS, AND BENEFICIARIES.          (1) The taxable incomes of estates, trusts, and beneficiaries thereof shall be computed by including a share of the modifications under Part IV of this act and the credit allowed under section 302 of this act, if the modification or credit relates to the income of the estate or trust.  Each taxpayer's share of a modification or credit is the amount of modification or credit multiplied by a fraction.  The numerator of the fraction is the taxpayer's share of the distributable net income of the estate or trust.  The denominator of the fraction is the total distributable net income of the estate or trust.  The fraction shall never be greater than one.

          (2) As used in this section, "distributable net income" means distributable net income as defined in the Internal Revenue Code.  If the estate or trust has no federal distributable net income, the term means the income of the estate or trust which is distributed or is required to be distributed during the taxable year under local law or the terms of the estate or trust instrument.

          (3) Any portion of a modification which is not included in calculating the taxable incomes of the beneficiaries shall be included in calculating the taxable income of the trust or estate.

                                                                             PART VI

                                                                       WITHHOLDING

 

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          NEW SECTION.  Sec. 29.  EMPLOYER WITHHOLDING‑-REQUIREMENTS.             (1) Every employer making a payment of wages or salaries earned in this state, regardless of the place where the payment is made, shall deduct and withhold a tax as prescribed in tables adopted by the department by rule.  The tables shall reasonably reflect the annual tax liability of the employee under this title.  Every employer making such a deduction and withholding shall furnish to the employee a record of the amount of tax deducted and withheld from the employee on forms provided by the department.

          (2) If the employee is a resident of this state and earns income from personal services entirely performed in another state which imposes an income tax on the income, and the employer withholds income taxes under the laws of the state in which the income is earned, the employer is not required to withhold any tax imposed by this title on the income if the laws of the state in which the income is earned allow a similar exemption for its residents who earn income in this state.

 

          NEW SECTION.  Sec. 30.  LIABILITY OF EMPLOYER FOR TAX WITHHELD.         Any person required to deduct and withhold the tax imposed by this title is liable for the payment of the amount deducted and withheld to the department, and is not liable to any other person for the amount of tax deducted and withheld under this title.  The amount of tax so deducted and withheld shall be held to be a special fund in trust for this state.

 

          NEW SECTION.  Sec. 31.  WITHHOLDING BY GOVERNMENTAL ENTITY.              If the employer is the United States, a foreign country, or this state or any political subdivision thereof, or an agency or instrumentality of any one or more of the foregoing, then the return of the amount deducted and withheld upon any wages or salaries may be made by any officer of the employer having control of the payment of the wages and salaries or appropriately designated for that purpose.

 

          NEW SECTION.  Sec. 32.  CREDIT FOR TAX WITHHELD‑-HOW CLAIMED.             The amount deducted and withheld as tax under sections 601 through 603 of this act during any taxable year shall be allowed as a credit against the tax imposed for the taxable year by this title.  If the tax liability of any individual shown by the return is less than the total amount of the credit which the individual is entitled to claim under this section, the individual is entitled to a refund in the amount of the excess of the credit over the tax otherwise due.  If any individual entitled to claim a credit under this section is not otherwise required by this title to file a return, a refund may be obtained in the amount of the credit by filing a return, with applicable sections completed, to claim the refund.  No credit or refund is allowed under this section unless the credit or refund is claimed on a return filed for the taxable year for which the amount was deducted and withheld.

                                                                            PART VII

                                                           ADMINISTRATIVE PROVISIONS

 

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          NEW SECTION.  Sec. 33.  METHOD OF ACCOUNTING.        (1) A taxpayer's method of accounting for purposes of the tax imposed under this title shall be the same as the taxpayer's method of accounting for federal income tax purposes.  If no method of accounting has been regularly used by a taxpayer for federal income tax purposes, tax due under this title shall be computed by a method of accounting which in the opinion of the department fairly reflects income.

          (2) If a person's method of accounting is changed for federal income tax purposes, it shall be similarly changed for purposes of this title.

 

          NEW SECTION.  Sec. 34.  JOINT RETURN.             (1) If  neither spouse is required to file a federal income tax return for the taxable year, a joint return may be filed under this title under the same conditions under which a joint return may be filed for purposes of the federal income tax.

          (2) If the federal income tax liabilities of both spouses are determined on a joint federal return for the taxable year, they shall file a joint return under this title unless one spouse is a resident and the other is a nonresident.

          (3) If the federal income tax liability of either spouse is determined on a separate federal return for the taxable year, they shall file separate returns under this title.

          (4) If one spouse is a resident and the other is a nonresident, they shall file separate returns under this title, unless they elect to determine their tax liabilities under this title on a joint return as if they were both residents and:

          (a) Their federal tax liability for the taxable year was determined on a joint federal return; or

          (b) Neither spouse has filed a federal income tax return for the taxable year and they would be permitted to file a joint federal return for the taxable year.

          (5) In any case in which a joint return is filed under this section, the liability of the husband and wife is joint and several, unless the spouse is relieved of liability under section 6013 of the Internal Revenue Code.

 

          NEW SECTION.  Sec. 35.  RECORDS‑-RETURNS.                (1) Every taxpayer and every person required to collect the tax imposed under this title shall keep records, render statements, make returns, file reports, and perform other acts, as the department requires by rule.  Each return shall be made under penalty of perjury and on forms prescribed by the department.  The department may require other statements and reports be made under penalty of perjury and on forms prescribed by the department.  The department may require any taxpayer and any person required to collect the tax imposed under this title to furnish to the department a correct copy of any return or document which the taxpayer has filed with the internal revenue service or received from the internal revenue service.

          (2) All books and records and other papers and documents required to be kept under this title are subject to inspection by the department at all times during business hours of the day.

 

          NEW SECTION.  Sec. 36.  SERVICE OF PROCESS.               (1) Any person who incurs tax liability under this title and who removes from this state or conceals his or her whereabouts shall be considered to appoint the secretary of state of this state as the person's agent for service of process or notice in any judicial or administrative proceeding under this title.  This process or notice shall be served by the department on the secretary of state by leaving at the office of the secretary of state, at least fifteen days before the return day of the process or notice, a certified copy thereof and by sending to the person, by registered or certified mail, a certified copy with an endorsement thereon of the service upon the secretary of state, addressed to the person at the person's last known address.

          (2) Service of process or notice in the manner and under the circumstances provided in this section is of the same force and validity as if served upon the person personally within this state.  Proof of this service may be made in any judicial or administrative proceeding by the affidavit of the authorized agent of the department who made the service, with a copy of the process or notice that was so served attached to the affidavit.

 

          NEW SECTION.  Sec. 37.  ESTIMATION AGREEMENTS.    The department may reasonably estimate the items of business or nonbusiness income of a taxpayer having an office within the state and one or more other states or foreign countries which may be apportioned or allocated to the state and may enter into estimation agreements with such taxpayers for the determination of their liability for the tax imposed by this title.

 

          NEW SECTION.  Sec. 38.  PROVISIONS OF INTERNAL REVENUE CODE CONTROL.  (1) To the extent possible without being inconsistent with this title, all of the provisions of the Internal Revenue Code relating to the following subjects apply to the taxes imposed under this title:

          (a) Time and manner of payment of tax imposed under this title, including tax withheld under sections 601 through 603 of this act.

          (b) Periods of limitation upon assessment and collection of taxes.  However, if a taxpayer fails to report a change or correction increasing the taxpayer's federal taxable income, or fails to report a change or correction which is treated as if it were a deficiency for federal income tax purposes, an assessment may be made at any time within one year of the date on which the department first learns of the change or correction.

          (c) Interest for underpayments and overpayments.

          (d) Liability of transferees.

          (e) Closing agreements and compromises.

          (f) Deficiency procedures, except that the state board of tax appeals shall review deficiencies under chapter 82.03 RCW.

          (g) Penalties and additions for failure to timely file returns or pay taxes.

          (h) Timing, amount, and manner of payment of estimated tax payments.

          (i) Time and manner of making returns, verification of returns, and the time when a return is deemed filed.

          (j) Powers of the secretary of the treasury, exercised under this title by the department, to prepare and execute returns, to prescribe forms, to enforce collection of the tax through liens and seizure of property, and to impose penalties.

          (2) The department by rule may provide modifications and exceptions to the provisions listed in subsection (1) of this section if reasonably necessary to facilitate the prompt, efficient, and equitable collection of tax under this title.

 

          NEW SECTION.  Sec. 39.  RULES.             The department may adopt rules under chapter 34.04 RCW for the administration and enforcement of this title.  The rules, to the extent possible without being inconsistent with this title, shall follow the Internal Revenue Code, and the regulations and rulings of the United States treasury department with respect to the federal income tax.  The department may adopt as a part of these rules any portions of the Internal Revenue Code and treasury department regulations and rulings, in whole or in part.

 

          NEW SECTION.  Sec. 40.  REFUNDS OF OVERPAYMENTS‑-OTHER ADMINISTRATIVE PROVISIONS.          (1) The department shall refund all taxes and penalties improperly paid or collected.

          (2) RCW 82.32.110, 82.32.120, 82.32.130, 82.32.320, 82.32.330, 82.32.340, and 82.32.380 apply to the administration of the taxes imposed under this title.

 

          NEW SECTION.  Sec. 41.  CRIMES.            (1) Any person who knowingly attempts to evade or defeat the tax imposed under this title or payment thereof is guilty of a class C felony as provided in chapter 9A.20 RCW.

          (2) Any person required to collect tax imposed under this title who knowingly fails to collect, truthfully account for, or pay over the tax is guilty of a class C felony as provided in chapter 9A.20 RCW.

          (3) Any person who knowingly fails to pay tax, pay estimated tax, make returns, keep records, or supply information, as required under this title, is guilty of a gross misdemeanor as provided in chapter 9A.20 RCW.

                                                                           PART VIII

                                                                            APPEALS

 

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        Sec. 42.  APPEALS TO BOARD‑-JURISDICTION AS TO TYPES OF APPEALS.  Section 42, chapter 26, Laws of 1967 ex. sess. as last amended by section 6, chapter 46, Laws of 1982 1st ex. sess. and RCW  82.03.130 are each amended to read as follows:

          The board shall have jurisdiction to decide the following types of appeals:

          (1) Appeals taken pursuant to RCW 82.03.190.

          (2) Appeals from a county board of equalization pursuant to RCW 84.08.130.

          (3) Appeals by an assessor or landowner from an order of the director of revenue made pursuant to RCW 84.08.010 and 84.08.060, the right to such an appeal being hereby established.

          (4) Appeals by an assessor or owner of an intercounty public utility or private car company from determinations by the director of revenue of equalized assessed valuation of property and the apportionment thereof to a county made pursuant to chapter 84.12 RCW and 84.16 RCW, the right to such appeal being hereby established.

          (5) Appeals by an assessor, landowner, or owner of an intercounty public utility or private car company from a determination of any county indicated ratio for such county compiled by the department of revenue pursuant to RCW 84.48.075:  PROVIDED, That

          (a) Said appeal be filed after review of the ratio under RCW 84.48.075(3) and not later than fifteen days after the date of certification as required by RCW 84.48.075; and

          (b) The hearing before the board shall be expeditiously held in accordance with rules prescribed by the board and shall take precedence over all matters of the same character.

          (6) Appeals relating to the sale of shorelands under RCW 79.94.210.

          (7) Appeals relating to timber tax stumpage values under RCW 84.33.091.

          (8) Appeals relating to the valuation of farm and agricultural land under RCW 84.34.065.

          (9) Appeals relating to property tax exemptions under RCW 84.36.850.

          (10) Appeals relating to income tax deficiencies under Title 82A RCW.

 

        Sec. 43.  APPEALS TO BOARD‑-ELECTION OF FORMAL OR INFORMAL HEARING.  Section 43, chapter 26, Laws of 1967 ex. sess. as amended by section 8, chapter 46, Laws of 1982 1st ex. sess. and RCW  82.03.140 are each amended to read as follows:

          In all appeals over which the board has jurisdiction under RCW 82.03.130, a party taking an appeal may elect either a formal or an informal hearing, such election to be made according to rules of practice and procedure to be promulgated by the board:  PROVIDED, HOWEVER, That nothing herein shall be construed to modify the provisions of RCW 82.03.190:  AND PROVIDED FURTHER, That upon an appeal under RCW 82.03.130(5) or (10), the director of revenue may, within ten days from the date of its receipt of the notice of appeal, file with the clerk of the board notice of its ((intention that the hearing be held pursuant to chapter 34.04 RCW)) election of a formal hearing.  In the event that appeals are taken from the same decision, order, or determination, as the case may be, by different parties and only one of such parties elects a formal hearing, a formal hearing shall be granted.

 

        Sec. 44.  JUDICIAL REVIEW OF BOARD'S DECISIONS.  Section 47, chapter 26, Laws of 1967 ex. sess. as amended by section 9, chapter 46, Laws of 1982 1st ex. sess. and RCW  82.03.180 are each amended to read as follows:

          (1) For appeals other than those under RCW 82.03.130(10), judicial review of a decision of the board of tax appeals shall be de novo in accordance with the provisions of RCW 82.32.180 or 84.68.020 as applicable except when the decision has been rendered pursuant to a formal hearing elected under RCW 82.03.140 or 82.03.190, in which event judicial review may be obtained only pursuant to RCW 34.04.130 and 34.04.140:  PROVIDED, HOWEVER, That nothing herein shall be construed to modify the rights of a taxpayer conferred by RCW 82.32.180 and 84.68.020 to sue for tax refunds:  AND PROVIDED FURTHER, That no review from a decision made pursuant to RCW 82.03.130(1) may be obtained by a taxpayer unless within the petition period provided by RCW 34.04.130 the taxpayer shall have first paid in full the contested tax, together with all penalties and interest thereon, if any.  The director of revenue shall have the same right of review from a decision made pursuant to RCW 82.03.130(1) as does a taxpayer; and the director of revenue and all parties to an appeal under RCW 82.03.130(5) shall have the right of review from a decision made pursuant to RCW 82.03.130(5).

          (2) Within thirty days after the final decision of the board in a case under RCW 82.03.130(10) in which a formal hearing is elected, the taxpayer or the department may appeal to the court of appeals.  The appeal shall be perfected by filing with the clerk of the court of appeals a petition for review and by serving a copy thereof by mail or personally on the opposing party.  The petitioner shall pay the costs of preparing the record of the hearing, and thereafter the board shall file with the clerk of the court the original or a certified copy of the entire record of the proceeding under review.  RCW 34.04.130(6) applies to this review, and a bond shall be required for the review if requested by the department.  The appropriate division of the court of appeals in which the petition for review is to be filed shall be, at the option of the petitioner, either division II or that division containing the district in which is located the petitioner's residence or principal place of business.  The method of judicial review of the board of tax appeals decision provided in this subsection is exclusive.  Nothing in this subsection prevents an appeal from the court of appeals to the state supreme court in the same manner as in other civil cases.  There shall be no judicial review of a final decision of the board under RCW 82.03.130(10) in which a formal hearing has not been elected.

 

          NEW SECTION.  Sec. 45.  JUDICIAL REVIEW OF CLAIM FOR REFUND.      Any person having filed a claim for refund or credit on any tax, penalty, or other sum collected under this title may, within the applicable period of limitation provided in section 706(1)(b) of this act, sue for a refund or credit on the tax, penalty, or other sum in the superior court of Thurston county.  All procedures and rights of appeal governing other civil actions apply to these proceedings.

          This section does not apply to any tax payment which has been the subject of an appeal to the state board of tax appeals with respect to which a formal hearing has been held.

                                                                            PART IX

                                                                EXCISE TAX REDUCTION

 

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        Sec. 46.  Section 82.08.020, chapter 15, Laws of 1961 as last amended by section 41, chapter 3, Laws of 1983 2nd ex. sess. and by section 62, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.08.020 are each reenacted and amended to read as follows:

          (1) There is levied and there shall be collected a tax on each retail sale in this state equal to ((six and five-tenths)) three an eight-tenths percent of the selling price.

          (2) The tax imposed under this chapter shall apply to successive retail sales of the same property.

          (3) The rate provided in this section applies to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

                                                                             PART X

                                            CONSTRUCTION‑-CODIFICATION‑-EFFECTIVE DATE

 

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          NEW SECTION.  Sec. 47.  SEVERABILITY.            If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

 

          NEW SECTION.  Sec. 48.  CODIFICATION‑-CAPTIONS.         Sections 101 through 709 and 804 of this act shall be codified as a new title in the Revised Code of Washington, to be numbered Title 82A.

          Section captions constitute no part of the law.

 

          NEW SECTION.  Sec. 49.  EFFECTIVE DATE.         This act shall take effect on January 1, 1986, if the proposed amendment to Article VII of the state Constitution authorizing an income tax (HJR ... ) is validly submitted and is approved and ratified by the voters at a general election held in November, 1985.  If the proposed amendment is not so approved and ratified, this act shall be null and void in its entirety.