H-1813.3  _______________________________________________

                          HOUSE BILL 2072

          _______________________________________________

State of Washington      54th Legislature     1995 Regular Session

By Representatives Foreman, B. Thomas, Silver, Sehlin, Padden, Cooke, Lambert, Huff, Carlson, Crouse, Pelesky, Beeksma, Hickel, Sheahan, Reams, Pennington, Mielke, Mulliken, Radcliff, Robertson, Ballasiotes, Talcott, Stevens, K. Schmidt, Cairnes, Thompson, Schoesler, Dyer, Casada, Backlund, L. Thomas, Mitchell, Campbell, Elliot, Chandler, Johnson, Benton, Carrell, D. Schmidt, Smith, McMahan, Sherstad and Boldt

Read first time 03/06/95.  Referred to Committee on Finance.

Reducing business and occupation tax rates.

    AN ACT Relating to reducing business and occupation tax rates; amending RCW 82.04.255 and 82.04.290; creating a new section; repealing RCW 82.04.2201; providing effective dates; and declaring an emergency.

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

    Sec. 1.  RCW 82.04.255 and 1993 sp.s. c 25 s 202 are each amended to read as follows:

    Upon every person engaging within the state as a real estate broker; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((2.0)) 1.75 percent.

    The measure of the tax on real estate commissions earned by the real estate broker shall be the gross commission earned by the particular real estate brokerage office including that portion of the commission paid to salesmen or associate brokers in the same office on a particular transaction:  PROVIDED, HOWEVER, That where a real estate commission is divided between an originating brokerage office and a cooperating brokerage office on a particular transaction, each brokerage office shall pay the tax only upon their respective shares of said commission:  AND PROVIDED FURTHER, That where the brokerage office has paid the tax as provided herein, salesmen or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

    Sec. 2.  RCW 82.04.290 and 1993 sp.s. c 25 s 203 are each amended to read as follows:

    (1) Upon every person engaging within this state in the business of providing selected business services other than or in addition to those enumerated in RCW 82.04.250 or 82.04.270; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((2.5)) 2.0 percent.

    (2) Upon every person engaging within this state in banking, loan, security, investment management, investment advisory, or other financial businesses; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((1.70)) 1.6 percent.

    (3) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, and 82.04.280, and subsections (1) and (2) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((2.0)) 1.75 percent.

    This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale."  The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.

    Sec. 3.  RCW 82.04.255 and 1995 c . . . s 1 (section 1 of this act) are each amended to read as follows:

    Upon every person engaging within the state as a real estate broker; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((1.75)) 1.5 percent.

    The measure of the tax on real estate commissions earned by the real estate broker shall be the gross commission earned by the particular real estate brokerage office including that portion of the commission paid to salesmen or associate brokers in the same office on a particular transaction:  PROVIDED, HOWEVER, That where a real estate commission is divided between an originating brokerage office and a cooperating brokerage office on a particular transaction, each brokerage office shall pay the tax only upon their respective shares of said commission:  AND PROVIDED FURTHER, That where the brokerage office has paid the tax as provided herein, salesmen or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

    Sec. 4.  RCW 82.04.290 and 1995 c . . . s 2 (section 2 of this act) are each amended to read as follows:

    (1) Upon every person engaging within this state in the business of providing selected business services other than or in addition to those enumerated in RCW 82.04.250 or 82.04.270; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((2.0)) 1.5 percent.

    (2) Upon every person engaging within this state in banking, loan, security, investment management, investment advisory, or other financial businesses; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((1.6)) 1.5 percent.

    (3) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, and 82.04.280, and subsections (1) and (2) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((1.75)) 1.5 percent.

    This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale."  The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.

NEW SECTION. Sec. 5.  RCW 82.04.2201 and 1994 sp.s. c 10 s 1 & 1993 sp.s. c 25 s 204 are each repealed.

NEW SECTION. Sec. 6.  The repeal in section 5 of this act shall not be construed as affecting any existing right acquired or liability or obligation incurred under the statute repealed or under any rule or order adopted pursuant to that statute; nor as affecting any proceeding instituted under it.

NEW SECTION. Sec. 7.  Sections 1 and 2 of this act are 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.

NEW SECTION. Sec. 8.  Sections 3, 4, and 5 of this act shall take effect July 1, 1996.

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