H-2307.1 _______________________________________________
SUBSTITUTE HOUSE BILL 2132
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State of Washington 52nd Legislature 1991 Regular Session
By House Committee on Revenue (originally sponsored by Representatives Wang, Holland, Morris, Silver, Appelwick, McLean, May, Zellinsky and Bowman).
Read first time March 6, 1991.
AN ACT Relating to business and occupation taxation of insurance salespersons; amending RCW 82.04.360; creating a new section; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. (1) The legislature finds:
(a) The existing state policy is to exempt employees from the business and occupation tax.
(b) It has been difficult to distinguish, for business and occupation tax purposes, between independent contractors and employees who are in the business of selling life insurance. The tests commonly used by the department of revenue to determine tax status have not successfully differentiated employees from independent contractors when applied to the life insurance industry.
(2) The intent of this act is to apply federal tax law and rules to distinguish between employees and independent contractors for business and occupation tax purposes, solely for the unique business of selling life insurance.
Sec. 2. RCW 82.04.360 and 1961 c 15 s 82.04.360 are each amended to read as follows:
This chapter shall not apply to any person in respect to his employment in the capacity of an employee or servant as distinguished from that of an independent contractor. For the purposes of this section, the definition of employee shall include those persons that are defined in Section 3121(d)(3)(B) of the Internal Revenue Code of 1986, as amended through January 1, 1991.
NEW SECTION. Sec. 3. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1991.