CERTIFICATION OF ENROLLMENT

                   SUBSTITUTE HOUSE BILL 2132

                   Chapter 275, Laws of 1991

                        52nd Legislature

                      1991 Regular Session

BUSINESS AND OCCUPATION TAX EXEMPTION FOR LIFE INSURANCE SALESPERSONS

                    EFFECTIVE DATE:  7/1/91

Passed by the House March 19, 1991

  Yeas 97   Nays 1

              JOE KING             

Speaker of the

       House of Representatives

Passed by the Senate April 15, 1991

  Yeas 45   Nays 3

           JOEL PRITCHARD          

President of the Senate

Approved May 20, 1991 Place Style On Codes above, and Style Off Codes below.

           BOOTH GARDNER           

Governor of the State of Washington

CERTIFICATE

I, Alan Thompson, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 2132 as passed by the House of Representatives and the Senate on the dates hereon set forth.

            ALAN THOMPSON             Chief Clerk

                                     FILED         

                 May 20, 1991 - 10:47 a.m.

                        Secretary of State   

                       State of Washington  

                  _______________________________________________

                            SUBSTITUTE HOUSE BILL 2132

                  _______________________________________________

                     Passed Legislature - 1991 Regular Session

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.  Modifying the definition of employee to include certain insurance salespersons for the purposes of the business and occupation tax exemption under RCW 82.04.360.

     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.

     Passed the House March 19, 1991.

     Passed the Senate April 15, 1991.

Approved by the Governor May 20, 1991.

     Filed in Office of Secretary of State May 20, 1991.