2708-S AAS 3/7/96 S5875.1

SHB 2708 - S AMD - 296

By Senators Snyder and Rinehart

                                                  WITHDRAWN 3/7/96

    Strike everything after the enacting clause and insert the following:

    "NEW SECTION. Sec. 1.  (1) The legislature finds that:

    (a) Washington's tax structure as it applies to warehouse and distribution businesses is often cited as a deterrent to economic development;

    (b) The retail sales tax applies to labor and materials used to construct new warehouse and distribution facilities and to renovate existing facilities.  Because of the broad tax base and the high tax rate, the retail sales tax may inhibit the development of new warehouse and distribution businesses and expansion by existing businesses; and

    (c) The business and occupation tax applies to gross receipts from engaging in business regardless of whether the business is profitable.

    (2) The intent of this act is to require a study to determine whether and to what extent state taxes play a competitive role in choosing the interstate location for new international and domestic warehouse and distribution businesses and expansion by existing international and domestic distribution and warehouse businesses.

    If it is determined that state taxes are a significant factor in location decisions, the study shall also:

    (a) Analyze how the current tax structure affects warehouse and distribution businesses;

    (b) Consider alternative methods of taxing warehouse and distribution business investment;

    (c) Identify the effects of tax incentives for warehouse and distribution businesses; and

    (d) Recommend to the legislature sales and use tax changes that might result in more equitable taxation of warehouse and distribution businesses while preserving a stable source of revenue for funding public services in the future.

NEW SECTION. Sec. 2.  (1) The department of revenue shall, if the sum of forty-five thousand dollars is appropriated for that purpose, and if at least forty-five thousand dollars is provided toward the cost of the study from other public or private sources, conduct a study to determine whether and to what extent state taxes play a competitive role in choosing the interstate location for new international and domestic warehouse and distribution businesses and expansion by existing international and domestic warehouse and distribution businesses.

    (2) If it is determined that state taxes are a significant factor in location decisions, the study shall:

    (a) Determine the current and potential impact of warehouse and distribution business activity on the Washington economy;

    (b) Identify the state of Washington's competitors for warehouse and distribution business investment, and evaluate this state's competitive status;

    (c) Analyze how the current tax structure affects warehouse and distribution business activity;

    (d) Identify the effects of tax incentives for warehouse and distribution businesses; and

    (e) Consider such other factors related to warehouse and distribution businesses as appropriate.

    (3) To perform this study, the department of revenue shall form an advisory study committee with representation from warehouse and distribution businesses interests, commercial and industrial real estate and development, agriculture, wholesale and retail trade, economic development councils, and public ports.  The advisory committee shall include, but need not be limited to, two members from the house of representatives and two members from the senate.  The advisory committee may also include representatives from other groups with an interest in freight movement, as well as tax policy experts from the academic, legal, and business communities.

    (4) The director of revenue, or the director's designee, shall chair the advisory committee, and the department of revenue shall provide staff for proposes of the study.

    (5) The department of revenue shall present a final report of the findings of the study to the committees of the legislature that deal with revenue matters by December 31, 1996.

NEW SECTION. Sec. 3.  If specific funding in the amount of forty‑five thousand dollars for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 1996, in the omnibus appropriations act, and if forty-five thousand dollars is not provided toward the cost of the study from other public and private sources, this act is null and void."

SHB 2708 - S AMD - 296

By Senators Snyder and Rinehart

    On page 1, line 2 of the title, after "activity;" strike the remainder of the title and insert "and creating new sections."

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