H-2175.2          _______________________________________________

                            SUBSTITUTE HOUSE BILL 1459

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State of Washington              54th Legislature             1995 Regular Session

By House Committee on Finance (originally sponsored by Representatives Van Luven and Sheldon)

Read first time 03/01/95.

Exempting from business and occupation tax reimbursements and advances received by property management companies for the payment of wages and benefits to on-site employees.

     AN ACT Relating to exempting from business and occupation tax reimbursements and advances received by property management companies for the payment of wages to on-site employees; adding a new section to chapter 82.04 RCW; creating a new section; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  The legislature finds that property owners often hire property management companies to manage their real property.  Frequently, the property management companies also manage the personnel who perform the necessary services at the property location.  In these cases, the property owners may pay the on-site personnel through the property management company.  The property management company is merely acting as a conduit for the property owner's payment to the personnel at the property site.

     This act is intended to clarify that the business and occupation tax does not apply to amounts received by a property management company and paid to on-site personnel.  This act is not intended to modify the taxation of amounts received by a property management company for purposes other than payment to on-site personnel.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.04 RCW to read as follows:

     This chapter shall not apply to amounts received by a property management company from the owner of a property for gross wages and benefits paid to or on behalf of on-site personnel.  As used in this section, "on-site personnel" means a person who meets all of the following conditions:  (1) The person works at the owner's property; (2) the person's duties include leasing property units, maintaining the property, collecting rents, or similar activities; and (3) pursuant to a written property management agreement, the person's compensation is the obligation of the property owner and not the property manager.

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 immediately.

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