FINAL BILL REPORT

SHB 1680

                                   C 96 L 88

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Nutley, Peery, Butterfield, Cooper and Sutherland)

Revising permit requirements on sales tax exemptions for nonresidents.

House Committe on Ways & Means/Revenue

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

An exemption from the sales tax is provided to certain nonresidents of Washington who obtain a nonresident permit.  The exemption is available for the purchase of tangible personal property for use outside this state.

The permits are available to residents of states and provinces of Canada only if the applicant's state or province does not impose a sales tax of three percent or more.  For example, it is available to residents of Alaska, Oregon, Montana and Alberta, but not to residents of British Columbia or Idaho.

Vendors making a tax exempt sale must ensure that the permit is valid and maintain records showing the permit number on each sale.  A vendor has two options when requested to make a tax exempt sale.  The vendor may either refuse to make the sale, or make the sale and keep the appropriate records.

Any person making tax exempt purchases with a counterfeit permit or a fraudulently obtained permit is guilty of a misdemeanor and may also be subject to a penalty.  The penalty shall not exceed the tax due on the purchases.  A vendor making a tax exempt sale to a person not entitled to the exemption is liable for the amount of tax due.

SUMMARY:

The nonresident permits for sales tax exemption are eliminated.  An eligible nonresident may procure a sales tax exemption through the use of a current out-of-state driver's license or photo identification and one other piece of identification.

Vendors are not required to make tax exempt sales.  Vendors making tax exempt sales must maintain records showing the type of identification used including identification numbers where appropriate.

A person using fraudulent identification to make a tax exempt purchase is guilty of a misdemeanor and is liable for the tax and a penalty equal to the greater of $100 or the tax due.

A vendor knowingly making a tax exempt sale to a person not entitled to a tax exemption is guilty of a misdemeanor and is liable for the tax and a penalty equal to the greater of $1,000 or the tax due on the sale.

VOTES ON FINAL PASSAGE:

      House 88   9

      Senate    41     7

EFFECTIVE:July 1, 1989