WSR 04-05-102

PREPROPOSAL STATEMENT OF INQUIRY

DEPARTMENT OF REVENUE


[ Filed February 18, 2004, 8:33 a.m. ]

Subject of Possible Rule Making: WAC 458-20-104 Small business tax relief based on volume of business.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300 and 82.01.060(2).

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This rule explains two methods by which the legislature has eased the tax burden on smaller volume businesses. The tax relief comes in the form of a public utility tax (PUT) threshold and a business and occupation (B&O) tax small business credit (SBC). The PUT threshold is an all-or-nothing amount where no PUT tax is due until the assigned amount per reporting frequency is reached, at which point the entire PUT liability is due. A full B&O credit is allowed, up to certain volumes of business, and reduced amounts of credit can be taken as the business volume increases, until the business reaches a point where no SBC is allowed. A step-ranged chart, for each frequency, is provided. This eliminates the need to hand-calculate the credit.

The department is considering a revision to this rule to change the hierarchy of applied credits. The current rule explains that the SBC should be computed after claiming any other B&O tax credits available under chapter 82.04 RCW. B&O tax credits provided for in other chapters are to be taken after the SBC. The preliminary discussion draft of a possible rule revision provides that all credits, regardless of where they are provided in Title 82 RCW, would be applied prior to the SBC being determined and applied.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

Process for Developing New Rule: Modified negotiated rule making.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, e-mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary discussion draft of a possible new or revised rule(s) is available upon request. Written comments on and/or requests for copies of the draft may be directed to Gayle Carlson, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6126, e-mail GayleC@dor.wa.gov, fax (360) 664-0693.

Date and Location of Public Meeting: Capital Plaza Building, 4th Floor Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on March 23, 2004, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 725-7499.

February 18, 2003 [2004]

Alan R. Lynn

Rules Coordinator

Legislation and Policy Division

Legislature Code Reviser 

Register

Washington State Code Reviser's Office