H-0575.2  _______________________________________________

                          HOUSE BILL 1208

          _______________________________________________

State of Washington      54th Legislature     1995 Regular Session

By Representatives Smith, Campbell, Koster, Thompson, Buck and Blanton

Read first time 01/17/95.  Referred to Committee on Trade & Economic Development.

Creating tax exemptions for businesses.

    AN ACT Relating to tax exemptions for businesses; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; 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.  The legislature finds and declares that:

    (1) The health, safety, and welfare of the people of the state of Washington are heavily dependent upon the continued encouragement, development, and expansion of opportunities for family wage employment in our state's private sector;

    (2) The state's private sector must be encouraged to commit to continuous improvement of process, products, and services and to deliver high-quality, high-value products through technological innovations and high-performance work organizations;

    (3) The state's opportunities for increased economic dealings with other states and nations of the world are dependent on supporting and attracting a diverse, stable, and competitive economic base of private sector employers;

    (4) The state's high taxes on businesses have placed our state's private sector at a competitive disadvantage with other states and serves as a significant disincentive to the continuous improvement of products, technology, and modernization necessary for the preservation, stabilization, and expansion of employment and to ensure a stable economy; and

    (5) It is vital to the continued development of economic opportunity in this state, including the development of new businesses and the expansion or modernization of existing businesses, that the state of Washington remove tax policy barriers to entities making a commitment to facilities and operations in this state.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.08 RCW to read as follows:

    (1) The tax levied by RCW 82.08.020 shall not apply to sales to a business of capital assets used directly in the business, or to sales of or charges made for labor and services rendered in respect to installing the capital asset.

    (2) As used in this section, "capital asset" means property of a type which is eligible for depreciation, amortization, or accelerated capital cost recovery under the federal internal revenue code.

NEW SECTION. Sec. 3.  A new section is added to chapter 82.12 RCW to read as follows:

    (1) The provisions of this chapter shall not apply in respect to the use by a business of capital assets used directly in the business, or to sales of or charges made for labor and services rendered in respect to installing the capital asset.

    (2) As used in this section, "capital asset" means property of a type which is eligible for depreciation, amortization, or accelerated capital cost recovery under the federal internal revenue code.

NEW SECTION. Sec. 4.  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, 1995.

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