S-3341

AN ACT Relating to fiscal reform; amending RCW 82.03.130, 82.03.140, 2.10.180, 2.12.090, 6.13.030, 41.44.240, 43.43.310, 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, 82.04.280, 82.04.290, 82.08.020, 84.52.043, and 43.135.020; reenacting and amending RCW 41.24.240, 41.26.180, 41.32.052, 41.40.052, and 76.12.120; adding a new section to chapter 84.52 RCW; adding a new title to the Revised Code of Washington to be numbered Title 82A RCW; creating a new section; repealing RCW 82.04.2901, 82.04.2904, 6.15.025, 84.52.065, and 84.52.067; prescribing penalties; and providing contingent effective dates.

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

PART I

INCOME TAX‑‑DEFINITIONS

NEW SECTION. Sec. 1. INTRODUCTORY. Unless the context clearly requires otherwise, the definitions in sections 2 through 13 of this act apply throughout this title.

NEW SECTION. Sec. 2. ADJUSTED GROSS INCOME. "Adjusted gross income" means adjusted gross income as determined under the internal revenue code.

NEW SECTION. Sec. 3. CORPORATION. "Corporation" means a person taxable as a corporation under the internal revenue code.

NEW SECTION. Sec. 4. DEPARTMENT. "Department" means the state department of revenue.

NEW SECTION. Sec. 5. FEDERAL BASE INCOME. "Federal base income" means:

(1) For individuals, adjusted gross income.

(2) For all other persons, taxable income as determined under the internal revenue code.

NEW SECTION. Sec. 6. INDIVIDUAL. "Individual" means a natural person.

NEW SECTION. Sec. 7. INTERNAL REVENUE CODE. "Internal revenue code" means the United States internal revenue code of 1986 and amendments thereto, as existing and in effect on January 1, 1992.

NEW SECTION. Sec. 8. PERSON. "Person" includes individuals, partnerships, firms, companies, fiduciaries, estates, trusts, and corporations.

NEW SECTION. Sec. 9. RESIDENT. "Resident" includes:

(1) An individual who:

(a) Has resided in this state for the entire taxable year; or

(b) Is domiciled in this state unless the individual:

(i) Maintains no permanent place of abode in this state; and

(ii) Does maintain a permanent place of abode elsewhere; and

(iii) Spends in the aggregate not more than thirty days in the taxable year in this state; or

(c) Is not domiciled in this state, but maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the taxable year in this state unless the individual establishes to the satisfaction of the director of revenue that the individual is in the state only for temporary or transitory purposes; or

(d) Claims the state of Washington as the individual's tax home for federal income tax purposes.

(2) A resident estate means an estate of which a personal representative was appointed by a Washington court or an estate the administration of which is carried on in this state.

(3) A resident trust means a trust whose situs as determined by RCW 11.96.040 is within the state of Washington.

NEW SECTION. Sec. 10. S CORPORATION. "S corporation" means an S corporation as defined in section 1361 of the internal revenue code.

NEW SECTION. Sec. 11. TAXABLE INCOME. "Taxable income" means federal base income after making the additions, subtractions, apportionments, and allocations provided under this title.

NEW SECTION. Sec. 12. TAXABLE YEAR. "Taxable year" means the taxpayer's taxable year as defined under the internal revenue code.

NEW SECTION. Sec. 13. TAXPAYER. "Taxpayer" means a person receiving income subject to tax under this title.

NEW SECTION. Sec. 14. DEFINITION OF TERMS GENERALLY. Except as provided in this Part, any term used in this title has the same meaning as when used in a comparable context in the internal revenue code.

PART II

INCOME TAX‑‑TAXABLE INCOME MODIFICATIONS

NEW SECTION. Sec. 15. INTRODUCTORY. In computing taxable income, modifications shall be made to the taxpayer's federal base income as required under this Part, unless the modification has the effect of duplicating an item of income or deduction.

NEW SECTION. Sec. 16. BUSINESS TAXES PAID FOR PERIODS BEFORE EFFECTIVE DATE. (1) Subtract gross income that was subject to tax under chapter 82.04 RCW for periods prior to the effective date of this act, to the extent the gross income was included in computing federal base income.

(2) Add any expenses incurred in the production of amounts subtracted under subsection (1) of this section, to the extent the expenses have been deducted in computing federal base income.

NEW SECTION. Sec. 17. CARRYOVERS. Add amounts that have been deducted in computing federal base income to the extent the amounts have been carried over from taxable years ending before the effective date of this act.

NEW SECTION. Sec. 18. CARRYBACKS. Add amounts that have been deducted in computing federal base income to the extent the amounts have been carried back from future taxable years.

NEW SECTION. Sec. 19. PUBLIC UTILITIES. From federal taxable income, deduct income attributable to activities subject to tax under chapter 82.16 RCW. However, the amount deducted under this section shall be reduced by any expense incurred in the production of such income to the extent the expense has been deducted in calculating federal taxable income.

NEW SECTION. Sec. 20. NONPROFIT ORGANIZATIONS. Add any amounts subject to tax under subchapter F, chapter 1, subtitle A of the internal revenue code. For the purposes of computations under this section, if a nonprofit organization has no federal base income, or a negative federal base income, federal base income shall be treated as if it were zero.

NEW SECTION. Sec. 21. S CORPORATIONS. Add amounts upon which an S corporation is subject to tax under subchapter S, chapter 1, subtitle A of the internal revenue code.

NEW SECTION. Sec. 22. STATE AND LOCAL INCOME TAXES. Add taxes on or measured by net income that have been deducted under the internal revenue code in computing federal base income.

NEW SECTION. Sec. 23. STATE AND LOCAL OBLIGATIONS. (1) For corporations, add all gross income that has been excluded under section 103 of the internal revenue code in computing federal base income.

(2) For taxpayers other than corporations, add gross income that has been excluded under section 103 of the internal revenue code in computing federal base income, except gross income derived from obligations of the state of Washington or political subdivisions of the state of Washington.

(3) Subtract any expenses incurred in the production of amounts added under subsection (1) or (2) of this section, to the extent the expenses have not been deducted in computing federal base income.

NEW SECTION. Sec. 24. DEDUCTIONS REQUIRED BY FEDERAL LAW. (1) Subtract gross income that the state is prohibited from taxing under the Constitution or laws of the United States, to the extent the gross income was included in computing federal base income.

(2) Add any expenses incurred in the production of amounts subtracted under subsection (1) of this section, to the extent the expenses have been deducted in computing federal base income.

NEW SECTION. Sec. 25. TAX RETURNS FOR FRACTIONAL YEAR. (1) If the first taxable year of any taxpayer with respect to which a tax is imposed by this title ends before December 31st of the calendar year in which this title becomes effective, referred to in this section as a fractional taxable year, the taxable income for the fractional taxable year shall be the taxpayer's taxable income for the entire taxable year, adjusted by one of the following methods, at the taxpayer's election:

(a) The taxable income shall be multiplied by a fraction. The numerator of the fraction is the number of days in the fractional taxable year. The denominator of the fraction is the number of days in the entire taxable year.

(b) The taxable income shall be adjusted, in accordance with rules of the department, so as to include only such income and be reduced only by such deductions as can be clearly determined from the permanent records of the taxpayer to be attributable to the fractional taxable year.

(2) If an individual taxpayer's taxable income is adjusted under subsection (1) of this section, the deduction amounts allowed under section 32 of this act for the taxpayer shall be reduced by multiplying the amount of the exemption by a fraction. The numerator of the fraction is the number of days in the taxpayer's fractional taxable year. The denominator of the fraction is the number of days in the entire taxable year.

PART III

INCOME TAX‑‑DIVISION OF INCOME, MODIFICATIONS, AND CREDITS

NEW SECTION. Sec. 26. APPORTIONMENT AND ALLOCATION OF INCOME‑-INDIVIDUALS, ESTATES, AND TRUSTS. (1) For resident individuals, estates, and trusts, all income shall be apportioned and allocated to this state.

(2) For nonresident individuals, estates, and trusts, income derived from sources within this state shall be apportioned and allocated to this state. For purposes of this title:

(a) The adjusted gross income of a nonresident derived from sources within this state is the net amount of items of income, gain, loss, and deduction of the nonresident's federal adjusted gross income that are derived from or connected with sources in this state including any distributive share of partnership income and deductions, and any share of estate or trust income and deductions, including any unrelated business income of an otherwise exempt trust or organization.

(b) Items of income, gain, loss, and deduction derived from or connected with sources within this state are those items attributable to the ownership or disposition of any interest in real or tangible personal property in this state, and a business, trade, profession, or occupation carried on within this state. The department shall issue rules to provide consistency of this section with the excise tax provisions.

(c) Deduction with respect to expenses, capital losses, and net operating losses shall be based solely on income, gains, losses, and deductions derived from or connected with sources in this state but shall otherwise be determined in the same manner as the corresponding federal deduction except as provided in this title.

(d) Income from intangible personal property, including annuities, dividends, interest, and gains from the disposition of intangible personal property, constitutes income derived from sources within the state of Washington only to the extent that such income is from property employed in a business, trade, profession, or occupation carried on within this state: PROVIDED, That distributed and undistributed income of an electing S corporation for federal tax purposes derived from or connected with sources within this state is income derived from sources within this state for a nonresident shareholder. A net operating loss of such corporation does constitute a loss or deduction connected with sources within this state for a nonresident shareholder.

(e) Compensation paid by the United States for service in the armed forces of the United States performed in this state by a nonresident does not constitute income derived from sources within this state.

(f) If a business, trade, profession, or occupation is carried on partly within and partly without this state, the determination of net income derived or connected with sources within this state, as provided in this section, shall be made by apportionment and allocation under chapter 82.56 RCW.

NEW SECTION. Sec. 27. APPORTIONMENT AND ALLOCATION OF INCOME‑‑CORPORATIONS. (1) For corporations other than financial organizations or public utilities, all income shall be apportioned and allocated to this state except income that is apportioned or allocated to another state under RCW 82.56.010.

(2) For financial organizations and public utilities, as defined in Article IV, section 1(d) and (f) of RCW 82.56.010, that are taxable both within this state and in another state within the meaning of Article IV, section 3 of RCW 82.56.010, the amount of net income to be apportioned or allocated, or both, to this state shall be determined in accordance with rules adopted by the department. The rules shall, as far as the department deems practical, be consistent with the provisions of Article IV of RCW 82.56.010. In developing the rules, the department shall also give appropriate consideration to any uniform regulations adopted by the multistate tax commission pursuant to Article VII of RCW 82.56.010, and to the rules of other states in which the financial organizations and public utilities are also taxable.

NEW SECTION. Sec. 28. COMBINED REPORTING. (1) The department may permit or require a corporation that is subject to taxation under this title and is a part of a water's edge combined group to file a combined report covering the combined operations of the group. The report shall contain such information as shall be designated in rules adopted by the department.

(2) A corporation is a part of a water's edge combined group if it is engaged in business activities that are integrated with, dependent upon, or that contribute to the business activities of the group as a whole. Only corporations meeting one or more of the following descriptions may be included in a water's edge combined group:

(a) Corporations included or includable in a consolidated return for federal income tax purposes;

(b) United States possessions corporations;

(d) Domestic international sales corporations or foreign sales corporations;

(e) Corporations incorporated in a country that either does not impose an income tax or imposes an income tax at a rate lower than ninety percent of the federal tax rate on the federally defined income tax base, if:

(i) Fifty percent or more of either the sales or purchases or of payments of income or expenses, exclusive of payments for intangible property, or payments of eighty percent or more of all expenses are made directly or indirectly to one or more members of a water's edge combined group; or

(ii) The corporation conducts no significant economic activity;

(f) Foreign corporations having at least a threshold level of business activity in the United States, as determined under rules of the department;

(g) United States corporations that are members of a group of two or more corporations with a common owner or owners, either corporate or noncorporate, where more than fifty percent of the voting stock of each member corporation is directly or indirectly owned by the common owner or owners or by one or more of the member corporations.

(3) The income attributable to the Washington activities of a corporation that is a part of a water's edge combined group shall be determined by the apportionment of the entire business net income of the group and the allocation of nonbusiness income of the corporation, using the factors and methods in section 27 of this act and the rules of the department adopted under section 27 of this act. Business net income may include income of corporations that do not have federal taxable income because they are not subject to federal taxation.

NEW SECTION. Sec. 29. PARTNERSHIPS AND S CORPORATIONS. (1) The taxable incomes of partners shall be computed by including a pro rata share of the modifications under Part II and sections 26 through 28 of this act and the credits allowed under section 33 of this act, if the modification or credit relates to the income of the partnership. Each partner's pro rata share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the partner's distributive share of partnership income. The denominator of the fraction is the total partnership income. The fraction shall never be greater than one.

(2) The taxable incomes of shareholders of S corporations shall be computed by including a share of the modifications under Part II and sections 26 through 28 of this act and the credits allowed under section 33 of this act, if the modification or credit relates to the income of the S corporation. Each shareholder's share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the shareholder's pro rata share of S corporation income. The denominator of the fraction is the total S corporation income. The fraction shall never be greater than one.

(3) As used in this section:

(a) "S corporation income" includes both distributed and undistributed federal taxable income of the S corporation less any amount subject to tax under section 33 of this act.

(b) "Pro rata share" means pro rata share as determined under section 1366(a) of the internal revenue code.

NEW SECTION. Sec. 30. ESTATES, TRUSTS, AND BENEFICIARIES. (1) The taxable incomes of estates, trusts, and beneficiaries thereof shall be computed by including a share of the modifications under Part II and sections 26 through 28 of this act and the credits allowed under section 33 of this act.

Each taxpayer's share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the taxpayer's share of the distributable net income of the estate or trust. The denominator of the fraction is the total distributable net income of the estate or trust. The fraction shall never be greater than one.

(2) As used in this section, "distributable net income" means distributable net income as defined in the internal revenue code. If an estate or trust has no federal distributable net income, the term means the income of the estate or trust which is distributed or is required to be distributed during the taxable year under local law or the terms of the estate or trust instrument.

(3) Any portion of a modification that is not included in calculating the taxable incomes of the beneficiaries shall be included in calculating the taxable income of the trust or estate.

PART IV

INCOME TAX‑‑RATES AND CREDITS

NEW SECTION. Sec. 31. PERSONAL INCOME TAX IMPOSED. (1) A tax is imposed at the rate of five and one-fourth percent for each taxable year on the taxable income of individuals, estates, and trusts as provided in this section.

(2) The standard deductions provided in section 32 of this act are allowed in computing taxable income.

(3) The taxes imposed in this section shall never be less than zero.

NEW SECTION. Sec. 32. STANDARD DEDUCTION. The following standard deductions are allowed in determining the tax under section 31 of this act:

(1) The standard deduction for an individual is:

(a) Sixteen thousand dollars for a joint return or a surviving spouse;

(b) Twelve thousand dollars for a head of household;

(d) Eight thousand dollars for a married individual filing a separate return.

(2) The deduction from adjusted gross income allowed under this section for individual taxpayers who are not residents of this state for the entire taxable year shall be reduced by multiplying the amount of the deduction by a fraction. The numerator of the fraction is the taxpayer's adjusted gross income attributable to sources within the state of Washington. The denominator of the fraction is the taxpayer's adjusted gross income from all sources. The fraction shall never be greater than one.

NEW SECTION. Sec. 33. CREDIT FOR INCOME TAXES DUE ANOTHER JURISDICTION. (1) The intent of this section is to prevent double taxation of income potentially subject to tax in both Washington and another jurisdiction.

(2) As used in this section, "another jurisdiction" means another state or foreign country or a political subdivision of another state or foreign country.

(3) A resident individual, estate, or trust is allowed a credit against the tax imposed under this title equal to the lesser of:

(a) The amount of tax paid to another jurisdiction on net income derived from sources within the other jurisdiction; or

(b) The amount of tax due under this title, before application of credits allowable by this title, multiplied by a fraction. The numerator of the fraction is the amount of the taxpayer's adjusted gross income subject to tax in the other jurisdiction. The denominator of the fraction is the taxpayer's total adjusted gross income as modified under Part II of this title. The fraction shall never be greater than one.

(4) If the laws of another jurisdiction contain a provision exempting a resident of Washington from net income taxes on income derived from sources in that jurisdiction, the director of revenue is authorized to enter into a reciprocal agreement with that jurisdiction providing a similar tax exemption for residents of that jurisdiction for income derived from sources within Washington.

(5) The amount of tax credits received by any taxpayer under this section shall not exceed the total amount of tax due, and there shall be no carryback or carryforward of any unused credits.

NEW SECTION. Sec. 34. DUAL RESIDENCE. If an individual is regarded as a resident both of this state and another jurisdiction for state personal income tax purposes, the department shall reduce the tax on that portion of the individual's income that is subjected to tax in both jurisdictions solely by virtue of dual residence, if the other taxing jurisdiction allows a similar reduction. The reduction shall equal the lower of the two taxes applicable to the income taxed twice, multiplied by a fraction. The numerator of the fraction is the tax imposed by this state on the income taxed twice. The denominator of the fraction is the tax imposed by both jurisdictions on the income taxed twice. The fraction shall never be greater than one.

NEW SECTION. Sec. 35. CORPORATE PRIVILEGE TAXES IMPOSED. A tax is imposed at the rate of nine percent for each taxable year on the taxable income of corporations for the privilege of engaging in business within the state.

NEW SECTION. Sec. 36. CREDIT FOR BUSINESS AND OCCUPATION TAXES IMPOSED. (1) A credit is allowed for business and occupation taxes under chapter 82.04 RCW on gross income subject to tax under this title. The credit is allowable only against the tax imposed under this title upon the income attributable to the activity taxed under chapter 82.04 RCW. The amount of the credit allowed under this section shall not exceed the amount of tax due under this title.

(2) Unused credits under this section shall not be carried back to previous tax years or carried forward to subsequent tax years.

NEW SECTION. Sec. 37. EXEMPTION‑‑INSURERS. The taxes imposed in this title do not apply to any person in respect to an insurance business that is exempt from business and occupation tax under RCW 82.04.320.

PART V

INCOME TAX‑‑WITHHOLDING AND ESTIMATED TAX

NEW SECTION. Sec. 38. EMPLOYER WITHHOLDING‑‑REQUIREMENTS. (1) Every employer making a payment of wages or salaries earned in this state, regardless of the place where the payment is made, and who is required by the internal revenue code to withhold taxes, shall deduct and withhold tax as prescribed by the department by rule. The rules prescribed shall reasonably reflect the annual tax liability under this title of the employee. Every employer making such a deduction and withholding shall furnish to the employee a record of the amount of tax deducted and withheld from the employee on forms provided by the department.

(2) If the employee is a resident of this state and earns income from personal services entirely performed in another state that imposes an income tax on the income, and the employer withholds income taxes under the laws of the state in which the income is earned, the employer is not required to withhold any tax imposed by this title on the income if the laws of the state in which the income is earned allow a similar exemption for its residents who earn income in this state.

NEW SECTION. Sec. 39. LIABILITY OF EMPLOYER FOR TAX WITHHELD. Any person required to deduct and withhold the tax imposed by this title is liable to the department for the payment of the amount deducted and withheld, and is not liable to any other person for the amount of tax deducted and withheld under this title or for the act of withholding. The amount of tax so deducted and withheld shall be held to be a special fund in trust for this state.

NEW SECTION. Sec. 40. CREDIT FOR TAX WITHHELD‑‑HOW CLAIMED. The amount deducted and withheld as tax under section 38 of this act during any taxable year shall be allowed as a credit against the tax imposed for the taxable year by this title. If the liability of any individual for taxes, interest, penalties, or other amounts due the state of Washington is less than the total amount of the credit that the individual is entitled to claim under this section, the individual is entitled to a refund from the department in the amount of the excess of the credit over the amounts otherwise due. If any individual entitled to claim a credit under this section is not otherwise required by this title to file a return, a refund may be obtained in the amount of the credit by filing a return, with applicable sections completed, to claim the refund. No credit or refund is allowed under this section unless the credit or refund is claimed on a return filed for the taxable year for which the amount was deducted and withheld.

NEW SECTION. Sec. 41. WITHHOLDING‑‑FAILURE TO PAY OR COLLECT‑‑PENALTIES. (1) The tax required by this title to be collected by the employer shall be deemed to be held in trust by the employer until paid to the department.

(2) In case any employer, or a responsible person within the meaning of internal revenue code section 6672, fails to collect the tax imposed by this title or having collected the tax fails to pay it to the department, the employer or responsible person shall, nevertheless, be personally liable to the state for the amount of the tax. The interest and penalty provisions of chapter 82.32 RCW apply to this section.

NEW SECTION. Sec. 42. ESTIMATED TAX IMPOSED‑‑DUE DATE OF ESTIMATED TAXES‑‑AMOUNT OF ESTIMATED TAX‑‑UNDERPAYMENT PENALTY. (1) Each taxpayer who is required by the internal revenue code to make payment of estimated taxes shall pay to the department on forms prescribed by the department the estimated taxes due under this title.

(2) The provisions of the internal revenue code relating to the determination of reporting periods and due dates of payments of estimated tax apply to the estimated tax payments due under this section.

(3) The amount of the estimated tax shall be the annualized tax divided by the number of months in the reporting period. No estimated tax shall be due if the annualized tax is less than five hundred dollars. The provisions of RCW 82.32.050 and 82.32.090 shall apply to underpayments of estimated tax but shall not apply to underpayments if the tax remitted to the department under this Part is either ninety percent of the tax shown on the return or one hundred percent of the tax shown on the previous year's tax return.

(4) For purposes of this section, the annualized tax is the taxpayer's projected tax liability for the taxable year as computed under internal revenue code section 6654 and the regulations thereunder.

PART VI

CRIMES

NEW SECTION. Sec. 43. CRIMES. (1) Any person who knowingly attempts to evade the tax imposed under this title or payment thereof is guilty of a class C felony as provided in chapter 9A.20 RCW.

(2) Any person required to collect tax imposed under this title who knowingly fails to collect, truthfully account for, or pay over the tax is guilty of a class C felony as provided in chapter 9A.20 RCW.

(3) Any person who knowingly fails to pay tax, pay estimated tax, make returns, keep records, or supply information, as required under this title, is guilty of a gross misdemeanor as provided in chapter 9A.20 RCW.

PART VII

INCOME TAX‑‑ADMINISTRATION AND ENFORCEMENT

NEW SECTION. Sec. 44. METHOD OF ACCOUNTING. (1) A taxpayer's method of accounting for purposes of the tax imposed under this title shall be the same as the taxpayer's method of accounting for federal income tax purposes. If no method of accounting has been regularly used by a taxpayer for federal income tax purposes or if the method used does not clearly reflect income, tax due under this title shall be computed by a method of accounting that in the opinion of the department fairly reflects income.

(2) If a person's method of accounting is changed for federal income tax purposes, it shall be similarly changed for purposes of this title.

NEW SECTION. Sec. 45. PERSONS REQUIRED TO FILE RETURNS. (1) All taxpayers shall file with the department, on forms prescribed by the department, an income tax return for each taxable year. An individual owing no tax for a taxable year is not required to file a return for that year. Each person required to file a return under this title shall, without assessment, notice, or demand, pay any tax due thereon to the department on or before the date fixed for the filing of the return.

(2) The department may by rule require that certain taxpayers file, on forms prescribed by the department, informational returns for any period.

(3) If an adjustment to a taxpayer's federal return is made by the taxpayer or the internal revenue service, the taxpayer shall, within ninety days of the final determination of the adjustment by the internal revenue service or within thirty days of the filing of a federal return adjusted by the taxpayer, file with the department on forms prescribed by the department, a corrected return reflecting the adjustments as finally determined. The taxpayer shall pay any additional tax due resulting from the finally determined internal revenue service adjustment or a taxpayer adjustment without notice and assessment. Notwithstanding any provision of this title or any other title to the contrary, the period of limitation for the collection of the additional tax, interest, and penalty due as a result of an adjustment by the taxpayer or a finally determined internal revenue service adjustment shall begin at the later of thirty days following the final determination of the adjustment or the date of the filing of the corrected return.

NEW SECTION. Sec. 46. DUE DATE FOR FILING A RETURN‑-EXTENSIONS‑-INTEREST AND PENALTIES. The due date of a return required to be filed with the department shall be the due date of the federal income tax return or informational return for federal income tax purposes. The department shall have the authority to grant extensions of times by which returns required to be filed by this title may be submitted. The department shall also have the authority to grant extensions of time to pay tax with regard to taxes imposed by this title. Interest at the rate as specified in RCW 82.32.050 shall accrue during any extension period and the interest and penalty provisions of chapter 82.32 RCW shall apply to late payments and deficiencies. Notwithstanding the limitation of RCW 82.32.090, in the case of the late filing of an informational return, there shall be imposed a penalty the amount of which shall be established by the department by rule. The penalty shall not exceed fifty dollars per month for a maximum of ten months. RCW 82.32.105 shall apply to this section.

NEW SECTION. Sec. 47. JOINT RETURN. (1) If the federal income tax liabilities of both spouses are determined on a joint federal return for the taxable year, they shall file a joint return under this title.

(2) If neither spouse is required to file a federal income tax return for the taxable year, a joint return shall be filed under this title under the same conditions under which a joint return may be filed for purposes of the federal income tax.

(3) If the federal income tax liability of either spouse is determined on a separate federal return for the taxable year, they shall file separate returns under this title.

(4) In any case in which a joint return is filed under this section, the liability of the husband and wife is joint and several, unless the spouse is relieved of liability under section 6013 of the internal revenue code.

NEW SECTION. Sec. 48. RECORDS‑‑RETURNS. (1) Every taxpayer and every person required to deduct and withhold the tax imposed under this title shall keep records, render statements, make returns, file reports, and perform other acts as the department requires by rule. Each return shall be made under penalty of perjury and on forms prescribed by the department. The department may require other statements and reports be made under penalty of perjury and on forms prescribed by the department. The department may require any taxpayer and any person required to deduct and withhold the tax imposed under this title to furnish to the department a correct copy of any return or document that the taxpayer has filed with the internal revenue service or received from the internal revenue service.

(2) All books and records and other papers and documents required to be kept under this title are subject to inspection by the department at all times during business hours of the day.

NEW SECTION. Sec. 49. ESTIMATION AGREEMENTS. The department may reasonably estimate the items of business or nonbusiness income of a taxpayer having an office within the state and one or more other states or foreign countries that may be apportioned or allocated to the state and may enter into estimation agreements with such taxpayers for the determination of their liability for the tax imposed by this title.

NEW SECTION. Sec. 50. PROVISIONS OF INTERNAL REVENUE CODE CONTROL. (1) To the extent possible without being inconsistent with this title, all of the provisions of the internal revenue code relating to the following subjects apply to the taxes imposed under this title:

(a) Time of payment of tax deducted and withheld under section 38 of this act;

(b) Liability of transferees;

(c) Time and manner of making returns, extensions of time for filing returns, verification of returns, and the time when a return is deemed filed.

(2) The department by rule may provide modifications and exceptions to the provisions listed in subsection (1) of this section, if reasonably necessary to facilitate the prompt, efficient, and equitable collection of tax under this title.

NEW SECTION. Sec. 51. REFUNDS OF OVERPAYMENTS‑-OTHER ADMINISTRATIVE PROVISIONS. (1) The department shall refund all taxes improperly paid or collected.

(2) The following sections apply to the administration of taxes imposed under this title: RCW 82.32.020, 82.32.050, 82.32.060, 82.32.070, 82.32.090, 82.32.100, 82.32.105, 82.32.110, 82.32.120, 82.32.130, 82.32.140, 82.32.150, 82.32.160, 82.32.170, 82.32.180, 82.32.190, 82.32.200, 82.32.210, 82.32.220, 82.32.230, 82.32.235, 82.32.237, 82.32.240, 82.32.245, 82.32.260, 82.32.265, 82.32.300, 82.32.310, 82.32.320, 82.32.330, 82.32.340, 82.32.350, 82.32.360, 82.32.380, and 82.32.410.

NEW SECTION. Sec. 52. RULES. The department may adopt rules under chapter 34.05 RCW for the administration and enforcement of this title. The rules, to the extent possible without being inconsistent with this title, shall follow the internal revenue code and the regulations and rulings of the United States treasury department with respect to the federal income tax. The department may adopt as a part of these rules any portions of the internal revenue code and treasury department regulations and rulings, in whole or in part.

PART VIII

INCOME TAX‑‑APPEALS

Sec. 53. RCW 82.03.130 and 1989 c 378 s 4 are each amended to read as follows:

The board shall have jurisdiction to decide the following types of appeals:

(1) Appeals taken pursuant to RCW 82.03.190.

(2) Appeals from a county board of equalization pursuant to RCW 84.08.130.

(3) Appeals by an assessor or landowner from an order of the director of revenue made pursuant to RCW 84.08.010 and 84.08.060, if filed with the board of tax appeals within thirty days after the mailing of the order, the right to such an appeal being hereby established.

(4) Appeals by an assessor or owner of an intercounty public utility or private car company from determinations by the director of revenue of equalized assessed valuation of property and the apportionment thereof to a county made pursuant to chapter 84.12 RCW and 84.16 RCW, if filed with the board of tax appeals within thirty days after mailing of the determination, the right to such appeal being hereby established.

(5) Appeals by an assessor, landowner, or owner of an intercounty public utility or private car company from a determination of any county indicated ratio for such county compiled by the department of revenue pursuant to RCW 84.48.075: PROVIDED, That

(a) Said appeal be filed after review of the ratio under RCW 84.48.075(3) and not later than fifteen days after the mailing of the certification; and

(b) The hearing before the board shall be expeditiously held in accordance with rules prescribed by the board and shall take precedence over all matters of the same character.

(6) Appeals from the decisions of sale price of second class shorelands on navigable lakes by the department of natural resources pursuant to RCW 79.94.210.

(7) Appeals from urban redevelopment property tax apportionment district proposals established by governmental ordinances pursuant to RCW 39.88.060.

(8) Appeals from interest rates as determined by the department of revenue for use in valuing farmland under current use assessment pursuant to RCW 84.34.065.

(9) Appeals from revisions to stumpage value tables used to determine value by the department of revenue pursuant to RCW 84.33.091.

(10) Appeals from denial of tax exemption application by the department of revenue pursuant to RCW 84.36.850.

(11) Appeals relating to income tax deficiencies and refunds including penalties and interest under Title 82A RCW (sections 1 through 52 of this act).

Sec. 54. RCW 82.03.140 and 1988 c 222 s 4 are each amended to read as follows:

In all appeals over which the board has jurisdiction under RCW 82.03.130, a party taking an appeal may elect either a formal or an informal hearing, such election to be made according to rules of practice and procedure to be promulgated by the board: PROVIDED, That nothing shall prevent the assessor or taxpayer, as a party to an appeal pursuant to RCW 84.08.130, within twenty days from the date of the receipt of the notice of appeal, from filing with the clerk of the board notice of intention that the hearing be a formal one: PROVIDED, HOWEVER, That nothing herein shall be construed to modify the provisions of RCW 82.03.190: AND PROVIDED FURTHER, That upon an appeal under RCW 82.03.130 (5) or (11), the director of revenue may, within ten days from the date of its receipt of the notice of appeal, file with the clerk of the board notice of its ((~~intention that the hearing be held pursuant to chapter 34.05 RCW~~)) election of a formal hearing. In the event that appeals are taken from the same decision, order, or determination, as the case may be, by different parties and only one of such parties elects a formal hearing, a formal hearing shall be granted.

PART IX

CONFORMING AMENDMENTS

Sec. 55. RCW 2.10.180 and 1991 c 365 s 18 are each amended to read as follows:

(1) Except as provided in subsections (2), (3), ((~~and~~)) (4), and (5) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, are hereby exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, or any other process of law whatsoever.

(2) Subsection (1) of this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington.

(3) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed. Future deductions may only be made in accordance with this section.

(4) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) a notice of payroll deduction issued under chapter 26.23 RCW, (c) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (d) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, (e) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

(5) Subsection (1) of this section does not exempt any pension or other benefit received under this chapter from tax under Title 82A RCW (sections 1 through 52 of this act), nor does it prohibit the department of retirement systems from complying with the tax withholding requirements of that title.

Sec. 56. RCW 2.12.090 and 1991 c 365 s 19 are each amended to read as follows:

(1) Except as provided in subsections (2), (3), ((~~and~~)) (4), and (5) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions of this chapter and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever and shall be unassignable except as herein specifically provided.

(2) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) a notice of payroll deduction issued under chapter 26.23 RCW, (c) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (d) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, (e) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

(3) Subsection (1) of this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington.

(4) Deductions made in the past from retirement benefits are hereby expressly recognized, ratified, and affirmed. Future deductions may only be made in accordance with this section.

Sec. 57. RCW 6.13.030 and 1991 c 123 s 2 are each amended to read as follows:

A homestead may consist of lands, as described in RCW 6.13.010, regardless of area, but the homestead exemption amount shall not exceed the lesser of (1) the total net value of the lands, mobile home, and improvements as described in RCW 6.13.010, or (2) the sum of thirty thousand dollars((, except where the homestead is subject to execution, attachment, or seizure by or under any legal process whatever to satisfy a judgment in favor of any state for failure to pay that state's income tax on benefits received while a resident of the state of Washington from a pension or other retirement plan, in which event there shall be no dollar limit on the value of the exemption)).

Sec. 58. RCW 41.24.240 and 1989 c 360 s 26 and 1989 c 91 s 21 are each reenacted and amended to read as follows:

(1) The right of any person to any future payment under the provisions of this chapter shall not be transferable or assignable at law or in equity, and none of the moneys paid or payable or the rights existing under this chapter, shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law. This section shall not be applicable to any child support collection action taken under chapter 26.18, 26.23, or 74.20A RCW. Benefits under this chapter shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation.

(2) Nothing in this chapter shall be construed to deprive any fire fighter, eligible to receive a pension hereunder, from receiving a pension under any other act to which that fire fighter may become eligible by reason of services other than or in addition to his or her services as a fire fighter under this chapter.

(3) Subsection (1) of this section does not exempt any pension or other benefit received under this chapter from tax under Title 82A RCW (sections 1 through 52 of this act), nor does it prohibit the department of retirement systems from complying with the tax withholding requirements of that title.

Sec. 59. RCW 41.26.180 and 1991 c 365 s 20 and 1991 c 35 s 25 are each reenacted and amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a retirement allowance, disability allowance, or death benefit, to the return of accumulated contributions, the retirement, disability or death allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter, are hereby exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or any other process of law whatsoever, and shall be unassignable.

(2) On the written request of any person eligible to receive benefits under this section, the department may deduct from such payments the premiums for life, health, or other insurance. The request on behalf of any child or children shall be made by the legal guardian of such child or children. The department may provide for such persons one or more plans of group insurance, through contracts with regularly constituted insurance carriers or health care service contractors.

(3) Subsection (1) of this section shall not prohibit the department from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a notice of payroll deduction issued pursuant to RCW 26.23.060, (d) a mandatory benefits assignment order issued by the department, (e) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

(4) Subsection (1) of this section does not exempt any pension or other benefit received under this chapter from tax under Title 82A RCW (sections 1 through 52 of this act), nor does it prohibit the department of retirement systems from complying with the tax withholding requirements of that title.

Sec. 60. RCW 41.44.240 and 1989 c 360 s 28 are each amended to read as follows:

(1) The right of a person to a pension, annuity or a retirement allowance, to the return of contribution, the pension, annuity or retirement allowance itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, and the moneys in the fund created under this chapter shall not be subject to execution, garnishment, or any other process whatsoever.

(2) This section shall not apply to child support collection actions taken under chapter 26.18, 26.23, or 74.20A RCW against benefits payable under any such plan or arrangement. Benefits under this chapter shall be payable to a spouse or ex-spouse to the extent expressly provided for in any court decree of dissolution or legal separation or in any court order or court-approved property settlement agreement incident to any court decree of dissolution or legal separation.

Sec. 61. RCW 41.32.052 and 1991 c 365 s 21 and 1991 c 35 s 63 are each reenacted and amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a pension, an annuity, a retirement allowance, or disability allowance, to the return of contributions, any optional benefit or death benefit, any other right accrued or accruing to any person under the provisions of this chapter and the moneys in the various funds created by this chapter shall be unassignable, and are hereby exempt from any state, county, municipal or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever.

(2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance who is eligible:

(a) Under RCW 41.05.080 from authorizing monthly deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions;

(b) Under a group health care benefit plan approved pursuant to RCW 28A.400.350 or 41.05.065 from authorizing monthly deductions therefrom, of the amount or amounts of subscription payments, premiums, or contributions to any person, firm, or corporation furnishing or providing medical, surgical, and hospital care or other health care insurance; or

(c) Under this system from authorizing monthly deductions therefrom for payment of dues and other membership fees to any retirement association composed of retired teachers and/or public employees pursuant to a written agreement between the director and the retirement association.

Deductions under (a) and (b) of this subsection shall be made in accordance with rules that may be adopted by the director.

Sec. 62. RCW 41.40.052 and 1991 c 365 s 22 and 1991 c 35 s 92 are each reenacted and amended to read as follows:

(1) Subject to subsections (2) ((~~and~~)), (3), and (4) of this section, the right of a person to a pension, an annuity, or retirement allowance, any optional benefit, any other right accrued or accruing to any person under the provisions of this chapter, the various funds created by this chapter, and all moneys and investments and income thereof, are hereby exempt from any state, county, municipal, or other local tax, and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or other process of law whatsoever, and shall be unassignable.

(2) This section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of premiums due on any group insurance policy or plan issued for the benefit of a group comprised of public employees of the state of Washington or its political subdivisions and which has been approved for deduction in accordance with rules that may be adopted by the state health care authority and/or the department, and this section shall not be deemed to prohibit a beneficiary of a retirement allowance from authorizing deductions therefrom for payment of dues and other membership fees to any retirement association or organization the membership of which is composed of retired public employees, if a total of three hundred or more of such retired employees have authorized such deduction for payment to the same retirement association or organization.

Sec. 63. RCW 43.43.310 and 1991 c 365 s 23 are each amended to read as follows:

(1) Except as provided in subsections (2) ((~~and~~)), (3), and (4) of this section, the right of any person to a retirement allowance or optional retirement allowance under the provisions hereof and all moneys and investments and income thereof are exempt from any state, county, municipal, or other local tax and shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or the insolvency laws, or other processes of law whatsoever and shall be unassignable except as herein specifically provided.

(2) Subsection (1) of this section shall not prohibit the department of retirement systems from complying with (a) a wage assignment order for child support issued pursuant to chapter 26.18 RCW, (b) an order to withhold and deliver issued pursuant to chapter 74.20A RCW, (c) a notice of payroll deduction issued pursuant to RCW 26.23.060, (d) a mandatory benefits assignment order issued pursuant to chapter 41.50 RCW, (e) a court order directing the department of retirement systems to pay benefits directly to an obligee under a dissolution order as defined in RCW 41.50.500(3) which fully complies with RCW 41.50.670 and 41.50.700, or (f) any administrative or court order expressly authorized by federal law.

PART X

EXCISE TAX REDUCTIONS

Sec. 64. RCW 82.04.230 and 1971 ex.s. c 281 s 2 are each amended to read as follows:

Upon every person engaging within this state in business as an extractor; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, extracted for sale or for commercial or industrial use, multiplied by the rate of ((~~forty-four one-hundredths~~)) .242 of one percent;

The measure of the tax is the value of the products, including byproducts, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 65. RCW 82.04.240 and 1981 c 172 s 1 are each amended to read as follows:

Upon every person except persons taxable under subsections (2), (3), (4), (5), (7), (8), or (9) of RCW 82.04.260 engaging within this state in business as a manufacturer; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, manufactured, multiplied by the rate of ((~~forty-four one-hundredths~~)) .242 of one percent.

The measure of the tax is the value of the products, including byproducts, so manufactured regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 66. RCW 82.04.250 and 1981 c 172 s 2 are each amended to read as follows:

Upon every person except persons taxable under RCW 82.04.260(8) engaging within this state in the business of making sales at retail, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of ((~~forty-four one-hundredths~~)) .2354 of one percent; except for the act or privilege of engaging in the business activity of making sales at retail which are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, then the rate of tax shall be .242 of one percent.

Sec. 67. RCW 82.04.255 and 1985 c 32 s 2 are each amended to read as follows:

Upon every person engaging within the state as a real estate broker; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((~~1.50~~)) .75 percent.

The measure of the tax on real estate commissions earned by the real estate broker shall be the gross commission earned by the particular real estate brokerage office including that portion of the commission paid to salesmen or associate brokers in the same office on a particular transaction: PROVIDED, HOWEVER, That where a real estate commission is divided between an originating brokerage office and a cooperating brokerage office on a particular transaction, each brokerage office shall pay the tax only upon their respective shares of said commission: AND PROVIDED FURTHER, That where the brokerage office has paid the tax as provided herein, salesmen or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

Sec. 68. RCW 82.04.260 and 1991 c 272 s 15 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of buying wheat, oats, dry peas, dry beans, lentils, triticale, corn, rye and barley, but not including any manufactured or processed products thereof, and selling the same at wholesale; the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of ((~~one one-hundredth~~)) .0055 of one percent.

(2) Upon every person engaging within this state in the business of manufacturing wheat into flour, barley into pearl barley, soybeans into soybean oil, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, or oil manufactured, multiplied by the rate of ((~~one-eighth~~)) .06875 of one percent.

(3) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of ((~~one-quarter~~)) .01375 of one percent.

(4) Upon every person engaging within this state in the business of manufacturing seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of ((~~one-eighth~~)) .06875 of one percent.

(5) Upon every person engaging within this state in the business of manufacturing by canning, preserving, freezing or dehydrating fresh fruits and vegetables; as to such persons the amount of tax with respect to such business shall be equal to the value of the products canned, preserved, frozen or dehydrated multiplied by the rate of ((~~three-tenths~~)) .165 of one percent.

(6) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~forty-four one-hundredths~~)) .242 of one percent.

(7) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of ((~~twenty-five one-hundredths of one percent through June 30, 1986, and one-eighth~~)) .06875 of one percent thereafter.

(8) Upon every person engaging within this state in the business of making sales, at retail or wholesale, of nuclear fuel assemblies manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the assemblies multiplied by the rate of ((~~twenty-five one-hundredths~~)) .1375 of one percent.

(9) Upon every person engaging within this state in the business of manufacturing nuclear fuel assemblies, as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured multiplied by the rate of ((~~twenty-five one-hundredths~~)) .1375 of one percent.

(10) Upon every person engaging within this state in the business of acting as a travel agent; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~twenty-five one-hundredths~~)) .1375 of one percent.

(11) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~thirty-three one-hundredths~~)) .1815 of one percent.

(12) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of ((~~thirty-three one hundredths~~)) .1815 of one percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

(13) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of fifteen percent.

(a) The rate specified in this subsection shall be reduced to ten percent on May 20, 1991.

(b) The rate specified in this subsection shall be further reduced to five percent on January 1, 1992.

If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.

(14) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of ((~~one~~)) .55 percent.

Sec. 69. RCW 82.04.270 and 1981 c 172 s 4 are each amended to read as follows:

(1) Upon every person except persons taxable under subsections (1) or (8) of RCW 82.04.260 engaging within this state in the business of making sales at wholesale; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of such business multiplied by the rate of ((~~forty-four one-hundredths~~)) .242 of one percent.

(2) The tax imposed by this section is levied and shall be collected from every person engaged in the business of distributing in this state articles of tangible personal property, owned by them from their own warehouse or other central location in this state to two or more of their own retail stores or outlets, where no change of title or ownership occurs, the intent hereof being to impose a tax equal to the wholesaler's tax upon persons performing functions essentially comparable to those of a wholesaler, but not actually making sales: PROVIDED, That the tax designated in this section may not be assessed twice to the same person for the same article. The amount of the tax as to such persons shall be computed by multiplying ((~~forty-four one-hundredths~~)) .242 of one percent of the value of the article so distributed as of the time of such distribution: PROVIDED, That persons engaged in the activities described in this subsection shall not be liable for the tax imposed if by proper invoice it can be shown that they have purchased such property from a wholesaler who has paid a business and occupation tax to the state upon the same articles. This proviso shall not apply to purchases from manufacturers as defined in RCW 82.04.110. The department of revenue shall prescribe uniform and equitable rules for the purpose of ascertaining such value, which value shall correspond as nearly as possible to the gross proceeds from sales at wholesale in this state of similar articles of like quality and character, and in similar quantities by other taxpayers: PROVIDED FURTHER, That delivery trucks or vans will not under the purposes of this section be considered to be retail stores or outlets.

Sec. 70. RCW 82.04.280 and 1986 c 226 s 2 are each amended to read as follows:

Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals or magazines; (2) building, repairing or improving any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of RCW 48.05.310; (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6), as now or hereafter amended; as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of ((~~forty-four one hundredths~~)) .242 of one percent.

As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.

As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance.

Sec. 71. RCW 82.04.290 and 1985 c 32 s 3 are each amended to read as follows:

Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, and 82.04.280; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((~~1.50~~)) .75 percent. This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.

Sec. 72. RCW 82.08.020 and 1985 c 32 s 1 are each amended to read as follows:

(1) There is levied and there shall be collected a tax on each retail sale in this state equal to ((~~six and five-tenths~~)) three and twenty-five one-hundredths percent of the selling price.

(2) The tax imposed under this chapter shall apply to successive retail sales of the same property.

(3) The rate provided in this section applies to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

NEW SECTION. Sec. 73. (1) The following acts or parts of acts are each repealed:

(a) RCW 82.04.2901 and 1985 c 32 s 4; and

(b) RCW 82.04.2904 and 1985 c 32 s 5, 1983 2nd ex.s. c 3 s 3, & 1983 c 9 s 3.

(2) The repeals under subsection (1) of this section shall not be construed as affecting any existing right acquired or any liability or obligation incurred under the statutes repealed or under any rule, regulation, or order adopted pursuant thereto; nor as affecting any proceeding instituted thereunder.

NEW SECTION. Sec. 74. (1) The following acts or parts of acts are each repealed:

(a) RCW 6.15.025 and 1991 c 123 s 3;

(b) RCW 84.52.065 and 1991 sp.s. c 31 s 16, 1979 ex.s. c 218 s 1, 1973 1st ex.s. c 195 s 106, 1971 ex.s. c 299 s 25, 1969 ex.s. c 216 s 2, & 1967 ex.s. c 133 s 1; and

PART XI

ELIMINATION OF STATE PROPERTY TAX

NEW SECTION. Sec. 75. A new section is added to chapter 84.52 RCW to read as follows:

The state shall not levy ad valorem property taxes under Title 84 RCW for collection in 1994, nor thereafter.

This section does not affect property taxes levied for collection in years prior to 1994.

Sec. 76. RCW 84.52.043 and 1990 c 234 s 1 are each amended to read as follows:

Within and subject to the limitations imposed by RCW 84.52.050 as amended, the regular ad valorem tax levies upon real and personal property by the taxing districts hereafter named shall be as follows:

(1) Levies of the senior taxing districts shall be as follows: (a) The ((levy by the state shall not exceed three dollars and sixty cents per thousand dollars of assessed value adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue to be used exclusively for the support of the common schools; (b) the)) levy by any county shall not exceed one dollar and eighty cents per thousand dollars of assessed value; ((~~(c)~~)) (b) the levy by any road district shall not exceed two dollars and twenty-five cents per thousand dollars of assessed value; and ((~~(d)~~)) (c) the levy by any city or town shall not exceed three dollars and thirty-seven and one-half cents per thousand dollars of assessed value. However any county is hereby authorized to increase its levy from one dollar and eighty cents to a rate not to exceed two dollars and forty-seven and one-half cents per thousand dollars of assessed value for general county purposes if the total levies for both the county and any road district within the county do not exceed four dollars and five cents per thousand dollars of assessed value, and no other taxing district has its levy reduced as a result of the increased county levy.

(2) ((~~Except as provided in RCW 84.52.100,~~)) The aggregate levies of junior taxing districts and senior taxing districts, other than the state, shall not exceed five dollars and ninety cents per thousand dollars of assessed valuation. The term "junior taxing districts" includes all taxing districts ((~~other than the state~~)), counties, road districts, cities, towns, port districts, and public utility districts. The limitations provided in this subsection shall not apply to: (a) Levies at the rates provided by existing law by or for any port or public utility district; (b) excess property tax levies authorized in Article VII, section 2 of the state Constitution; (c) levies for acquiring conservation futures as authorized under RCW 84.34.230; and (d) levies for emergency medical care or emergency medical services imposed under RCW 84.52.069.

Sec. 77. RCW 43.135.020 and 1980 c 1 s 2 are each amended to read as follows:

As used in this chapter, the following terms have the meanings indicated unless otherwise required.

(1) "State tax revenue" means all state moneys received in the treasury from every source except those revenues excluded for the term "general state revenues" by Article VIII, section (1)(c) of the state Constitution ((~~other than the state property tax levied for the support of the common schools under RCW 84.52.065, as now or hereafter amended)).~~

(2) "State personal income" means the dollar amount published as total personal income of persons of the state for the calendar year by the United States department of commerce or its successor agency.

~~(3) "State tax revenue limit" or "limit" means the state tax revenue limit created by this chapter.~~

~~(4) "Taxing district" means those districts included within the term "taxing district" under RCW 84.04.120, as now or hereafter amended.~~

(5) "State personal income ratio" for any calendar year means the quotient formed by dividing (a) state personal income for the calendar year under consideration by (b) the state personal income for the immediately preceding calendar year.

~~Sec.~~ ~~78.~~ ~~RCW 76.12.120 and 1988 c 128 s 32 and 1988 c 70 s 1 are each reenacted and amended to read as follows:~~

All land, acquired or designated by the department as state forest land, shall be forever reserved from sale, but the timber and other products thereon may be sold or the land may be leased in the same manner and for the same purposes as is authorized for state granted land if the department finds such sale or lease to be in the best interests of the state and approves the terms and conditions thereof.

Except as provided in RCW 79.12.035, all money derived from the sale of timber or other products, or from lease, or from any other source from the land, except where the Constitution of this state or RCW 76.12.030 requires other disposition, shall be disposed of as follows:

~~(1) Fifty percent shall be placed in the forest development account.~~

(2) Fifty percent shall be prorated and distributed to the state general fund, to be dedicated for the benefit of the public schools, and the county in which the land is located according to the relative proportions of tax levies of all taxing districts in the county. The portion to be distributed to the state general fund shall be based on the ((regular school levy rate under RCW 84.52.065 as now or hereafter amended and the levy rate for any maintenance and operation special school levies)) amounts appropriated for common schools by the legislature. The money distributed to the county shall be paid, distributed, and prorated to the various other funds in the same manner as general taxes are paid and distributed during the year of payment.

PART XII

MISCELLANEOUS

NEW SECTION. Sec. 79. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 80. CAPTIONS. Captions and part headings as used in this act constitute no part of the law.

NEW SECTION. Sec. 81. CODIFICATION. Sections 1 through 52 of this act shall constitute a new title in the Revised Code of Washington, to be numbered Title 82A RCW.

NEW SECTION. Sec. 82. EFFECTIVE DATES. This act shall take effect on January 1, 1993, except for sections 64 through 73 of this act which take effect on July 1, 1993, and except for sections 76 through 78 of this act which take effect on January 1, 1994, if the proposed amendment to Article VII of the state Constitution authorizing income taxes SJR ... (S-3342/92) is validly submitted and is approved and ratified by the voters at a general election held in November 1992. If the proposed amendment is not so approved and ratified, this act shall be null and void in its entirety.