FINAL BILL REPORT

                 SHB 2447

                          FULL VETO

Brief Description:  Providing business and occupation tax exemptions for auctions and wholesale transactions involving motor vehicles.

Sponsors:  By House Committee on Finance (originally sponsored by Representatives Robertson, Cairnes, L. Thomas, Silver, Mulliken and Carrell).

House Committee on Finance

Senate Committee on Ways & Means

Background:  Washington's major business tax is the business and occupation (B&O) tax.  Although there are several different rates, the principal rates are

Manufacturing, wholesaling, & extracting-0.506 percent

Retailing-0.471 percent

Services:

!Business Services-2.0 percent

!Financial Services-1.6 percent

!Other activities-1.83 percent

The B&O tax is imposed on the gross receipts of business activities conducted within the state, without any deduction for the costs of doing business.  Out-of-state companies that bring goods into Washington and sell these goods in Washington must pay the B&O tax. 

Summary:  Wholesales of motor vehicles at auctions to dealers licensed in Washington or another state are exempt from the business and occupation tax. 

Votes on Final Passage:

House     90 6

Senate    48 1