SENATE BILL REPORT

SB 6350

BYSenators Smith and Hayner

Modifying acceptable proof of a corporation's nonresident status.

Senate Committee on Ways & Means

Senate Hearing Date(s):January 31, 1990; February 1, 1990

Majority Report:  Do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman, Amondson, Bailey, Bauer, Bluechel, Cantu, Fleming, Gaspard, Hayner, Johnson, Lee, Moore, Newhouse, Niemi, Owen, Saling, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Bill Freund (786-7715)

                  February 15, 1990

AS PASSED SENATE, FEBRUARY 13, 1990

BACKGROUND:

Nonresidents of Washington are exempt from sales tax, for purchases made in Washington for use outside the state, provided they reside in a state or province not imposing a 3 percent or more sales tax.

Prior to July 1, 1989, a permit was required in order to qualify for the exemption.  The permits were eliminated on that date and replaced with a requirement that two pieces of valid ID establishing residence in another state sufficed.  One of the required pieces of valid ID is either a driver's license or other ID containing a photograph of the person.  Nonresident corporations do not possess such ID and since they could not meet this statutory requirement, their tax exempt status was uncertain.  The Department of Revenue resolved the problem by adopting a rule reinstating the permit process for nonresident corporations.

SUMMARY:

The department is authorized to issue permits to nonresident corporations.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: No one