AN ACT Relating to the taxation of dog and cat food; and adding a new chapter to Title 82 RCW.

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

NEW SECTION. Sec. 1. The legislature finds that the overpopulation of unwanted dogs and cats is a growing problem of state concern and a threat to the health, safety, and welfare of the citizens of this state. Unwanted dogs and cats roaming the streets pose a hazard to the physical well-being of the public and create a danger to vehicular traffic. The cost of removing, sheltering, and disposing of these animals is an increasing public expense. Additional revenue is needed to promote the sterilization of dogs and cats in order to alleviate the dog and cat overpopulation problem.

It is the intent of this chapter to tax the first possession of all dog or cat products and to impose the tax only once for each dog or cat product possessed in this state.

NEW SECTION. Sec. 2. As used in this chapter, the following terms have the meanings indicated below unless the context clearly requires otherwise.

(1) "Animal control authority" means an entity acting alone or in concert with local governmental units for enforcement of the animal control laws of the city, county, and state and the shelter and welfare of animals.

(2) "Dog or cat product" means any food or other product that is packaged and sold for consumption by dogs and cats. Food products do not include medicines and preparations in liquid, powdered, granular, tablet, capsule, lozenge, or pill form sold as dietary supplements or adjuncts.

(3) "Possession" means the control of a dog or cat product located within this state and includes both actual and constructive possession. "Actual possession" occurs when the person with control has physical possession. "Constructive possession" occurs when the person with control does not have physical possession. "Control" means the power to sell or use a dog or cat product or to authorize the sale or use by another.

(4) "Previously taxed dog or cat product" means a dog or cat product in respect to which a tax has been paid under this chapter and which has not been remanufactured or reprocessed in any manner (other than mere repackaging or recycling for beneficial reuse) since the tax was paid.

(5) "Wholesale value" means fair market wholesale value, determined as nearly as possible according to the wholesale selling price at the place of use of similar substances of like quality and character, in accordance with rules of the department.

(6) Except for terms defined in this section, the definitions in chapters 82.04, 82.08, and 82.12 RCW apply to this chapter.

NEW SECTION. Sec. 3. (1) A tax is imposed on the privilege of possession of dog or cat products in this state. The rate of the tax shall be one percent multiplied by the wholesale value of the dog or cat products.

(2) Moneys collected under this section shall be deposited in the animal control account under section 6 of this act.

(3) Chapter 82.32 RCW applies to the tax imposed in this section. The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the tax imposed in this chapter.

NEW SECTION. Sec. 4. The following are exempt from the tax imposed in this chapter:

(1) Any successive possession of a previously taxed dog or cat product. If tax due under this chapter has not been paid with respect to a dog or cat product, the department may collect the tax from any person who has had possession of the dog or cat product. If the tax is paid by any person other than the first person having taxable possession of a dog or cat product, the amount of tax paid shall constitute a debt owed by the first person having taxable possession to the person who paid the tax.

(2) Persons or activities which the state is prohibited from taxing under the United States Constitution.

(3) Any persons possessing a dog or cat product where such possession first occurred before the effective date of this section.

NEW SECTION. Sec. 5. Credit shall be allowed, in accordance with rules of the department, against the tax imposed in this chapter for any dog or cat product tax paid to another state with respect to the same dog or cat product. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to that dog or cat product. For the purpose of this section:

(1) "Dog or cat product tax" means a tax:

(a) Which is imposed on the act or privilege of possessing dog or cat products, and which is not generally imposed on other activities or privileges; and

(b) Which is measured by the value of the dog or cat product, in terms of wholesale value or other terms, and in the determination of which the deductions allowed would not constitute the tax an income tax or value added tax.

(2) "State" means (a) the state of Washington, (b) a state of the United States other than Washington, or any political subdivision of such other state, (c) the District of Columbia, and (d) any foreign country or political subdivision thereof.

NEW SECTION. Sec. 6. The animal control account is hereby created in the state treasury. Moneys in the account shall be distributed, subject to legislative appropriation, by the department of community development to counties and cities and towns for the spaying and neutering of dogs and cats, public education, and the training of animal control personnel. Up to five percent of the moneys in the account may be used by the department for the costs associated with the administration of this chapter. The moneys in the account shall be distributed to the counties, cities, and towns based on their population as recorded in the most recent state census.

Of the moneys distributed to counties, seventy-five percent shall be distributed to each county based on the ratio that the population of the unincorporated area of the county bears to the total population of the unincorporated areas of all counties in the state and twenty-five percent shall be distributed to each county based on the ratio that the number of dogs and cats licensed in the unincorporated area of the county bears to the total number of dogs and cats licensed in the unincorporated areas of all counties in the state.

Of the moneys distributed to cities and towns, seventy-five percent shall be distributed to each city or town based on the ratio that the population of the city or town bears to the total population of all cities and towns in the state and twenty-five percent shall be distributed to each city and town based on the ratio that the number of dogs and cats licensed in the city or town bears to the total number of dogs and cats licensed in all cities and towns in the state.

NEW SECTION. Sec. 7. Sections 1 through 6 of this act shall constitute a new chapter in Title 82 RCW.