HOUSE BILL REPORT

                  HB 1626

             As Reported By House Committee On:

                           Finance

Title:  An act relating to tax exemptions for medicines prescribed by naturopaths.

Brief Description:  Exempting from sales and use tax medicines prescribed by naturopaths.

Sponsors:  Representatives Van Luven, Morris, Campbell, Hargrove and Dickerson.

Brief History:

  Committee Activity:

Finance:  1/17/96, 1/25/96 [DPS].

HOUSE COMMITTEE ON FINANCE

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  Signed by 10 members:  Representatives B. Thomas, Chairman; Carrell, Vice Chairman; Boldt, Vice Chairman; Morris, Ranking Minority Member; Dickerson, Assistant Ranking Minority Member; Hymes; Mulliken; Schoesler; Sheldon and Van Luven.

Staff:  Cheri Keller (786-7093).

Background:  The sales tax is imposed on retail sales of most items of tangible personal property and some services.  The state tax rate is 6.5 percent and is applied to the selling price of the article or service.  In addition, local sales taxes apply.  The total rate is between 7 percent and 8.2 percent, depending on the location.

Sales tax applies when items are purchased at retail in the state.  Sales tax is paid by the purchaser and collected by the seller.  Use tax is imposed on the use of an item in this state when the acquisition of the item has not been subject to sales tax.  Use tax applies to items purchased from sellers who do not collect sales tax, items acquired from out of state, and items produced by the person using the item.  Use tax is equal to the sales tax rate multiplied by the value of the property used.

A number of exemptions from these taxes exist.  Examples of exemptions that apply to both sales and use taxes are most food purchased in stores, prescription drugs, and medically prescribed oxygen. 

The sale and use of medicines prescribed, administered, or used by a naturopath are not exempt from sales and use taxes.

Summary of Substitute Bill:  The sale and use of medicines of mineral, animal, and botanical origin prescribed, administered, or used in treatment of an individual by a naturopath are exempted from both sales and use taxes.

Substitute Bill Compared to Original Bill:  The substitute bill changes the effective date of the bill to July 1, 1996.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date of Substitute Bill:  The bill takes effect on July 1, 1996.

Testimony For:  Many people use naturopathic remedies.  Naturopaths prescribe many of the same medicines that doctors prescribe.  This form of treatment is less invasive and more preventative than traditional medicine, and thus can cost less money.  This will provide alternatives for people who may want to try naturopathic remedies before going to a medical doctor.

Testimony Against:  None.

Testified:  Representative Steve Van Luven, prime sponsor; and Jeff Larsen, Washington Association of Naturopathic Physicians.