HOUSE BILL REPORT
SHB 1336
BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Ballard, Grimm, Rayburn, McLean, Ferguson, Lewis, Silver, Amondson, Kremen, Betrozoff, Bristow, Rasmussen, Doty, Baugher, Fuhrman and Smith)
Revising sales and use tax provisions on the packing of horticultural products.
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. (7)
Signed by Representatives Appelwick, Chair; Basich, Dellwo, Holland, Schoon, Taylor and Winsley.
House Staff:Rick Wickman (786-7136)
AS PASSED HOUSE FEBRUARY 9, 1988
BACKGROUND:
Materials and supplies used in manufacturing and processing which are not resold are subject to sales and use taxes. For many years, there has been confusion over the application of the use tax to materials used in the packing of fresh horticultural products by agents or contractors defined under RCW 82.04.4287.
Fruit packing and warehouse companies utilize cartons and pallets to secure loads of fresh fruit without using twine or other materials that would bruise the fruit. The fruit is then shipped for sale to outlets.
SUMMARY:
Exempts from sales and use taxes, materials and supplies directly used in packing of fresh horticultural products. In addition, the proposed bill exempts from sales and use taxes materials and supplies directly used in receiving, washing, and sorting of fresh horticultural products.
Fiscal Note: Available.
House Committee ‑ Testified For: Bill Wilkerson, Department of Revenue; Karl Kottman, Washington Council of Farmer Cooperations; Bill Fritz, Washington Food Processors Council; Frank DeLong, Washington State Horticultural Association.
House Committee - Testified Against: None Presented.
House Committee - Testimony For: Materials and supplies used in packing fresh fruit should be exempt from sales and use tax for qualifying agents and contractors because packing is not part of the product for resale.
House Committee - Testimony Against: None Presented.