2260-S AMH KESS PITT 36

SHB 2260 - H AMD 0085 WITHDRAWN 3/16/99

By Representative Kessler

     On page 16, after line 13, insert the following:

ANEW SECTION. Sec. 25.  A new section is added to chapter 82.04 RCW to read as follows:

     (1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under this chapter for persons engaged in a distressed county in the business of providing information technology help desk services to third parties.

     (2) To qualify for the credit, the help desk services must be conducted from a distressed county.

     (3)(a) For the first eighty-four months in which the person is engaged in the activity of providing information technology help desk services in the distressed county, the amount of the credit shall be equal to one hundred percent of the amount of tax due under this chapter that is attributable to providing the services from the distressed county.

     (b) A person who is not eligible for the credit under (a) of this subsection is potentially eligible for credit under this subsection (3)(b).  If the person is engaged in the activity of providing information technology help desk services in a distressed county, the amount of the credit shall equal  sixty-eight percent of the amount of tax due under this chapter that is attributable to providing the service from the distressed county.

     (c) A person who has engaged in providing information technology help desk services in the distressed county before the effective date of this section qualifies for the credit under (a) of this subsection for any remaining time in the eighty-four months, after which time the person is potentially eligible for the credit under (b) of this subsection.  A person who has engaged in providing information technology help desk services in the distressed county before the effective date of this section for more than eighty-four months is potentially eligible for the credit under (b) of this subsection.

     (4) No application is necessary for the tax credit.  The person must keep records necessary for the department to verify eligibility under this section.

     (5) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used is immediately due.  The department shall assess interest, but not penalties, on the credited taxes for which the person is not eligible.  The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, shall be assessed retroactively to the date the tax credit was taken, and shall accrue until the taxes for which a credit has been used are repaid.

     (6) No credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year.  No refunds may be granted for credits under this section.

     (7) County eligibility under this section shall be based on the same list as published by the department under chapter 82.60 RCW.  The eligibility period is from July 1st of each year to June 30th of the next year.

     (8) A person taking tax credits under this section shall make an annual report to the department.  The report shall contain information the department deems necessary to determine the person=s eligibility for the tax credit and effectiveness of the program.  The report must be filed by January 30th of each year for which credit was claimed during the previous year.

     (9) Transfer of ownership does not affect credit eligibility; however, the credit is available to the successor only if the eligibility conditions of this section are met.

     (10) As used in this section:

     (a) "Distressed county" means either (i) a county in which the average level of unemployment for the previous three years exceeds the average state unemployment for those years by twenty percent or more; or (ii) a county that has a median household income that is less than seventy-five percent of the state median household income for the previous three years.

     (b) "First eighty-four months" means the eighty-four months of operation in a county following commencement of business activity.  Business activity is deemed to commence upon the act of engaging in the business of providing the help desk services from the county.

     (c) "Information technology help desk services" means the following services performed using electronic and telephonic communication:

     (i) Software maintenance;

     (ii) Software diagnostics and troubleshooting;

     (iii) Software installation;

     (iv) Software repair;

     (v) Software information and training; and

     (vi) Software upgrade.

NEW SECTION. Sec. 26.  A new section is added to chapter 82.62 RCW to read as follows:

     A person is not eligible to receive a credit under this chapter if the person is receiving credit under RCW 82.04.44525 or is receiving a credit under section 25 of this act.

NEW SECTION. Sec. 27.  Sections 25 and 26 of this act are necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 1999.@

Renumber the remaining section consecutively, correct internal references accordingly, and correct the title of the bill.

EFFECT: Provides a B&O tax credit for software help desk services  that are conducted in distressed counties.