AN ACT
Relating to excluding utility line clearing from the definition of retail sale;
amending RCW 82.04.050; 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. In 1993,
the legislature extended retail sales taxes to discretionary spending on
landscape maintenance and horticultural services. The legislature did not
intend to extend, nor did it believe it was extending, retail sales taxes to
pruning, trimming, repairing, removing, and clearing of trees and brush near
electric distribution or transmission lines or equipment by, or at the
direction of, an electric utility. The latter activities generally require
nondiscretionary expenditures by electric utilities in the interests of public
safety and minimizing unplanned power interruptions.
The
legislature finds that the department of revenue misinterpreted the intent of
the legislature by adopting a rule extending retail sales taxes to pruning,
trimming, repairing, removing, and clearing of trees and brush near electric
distribution or transmission lines or equipment, performed by, or at the
direction of, an electric utility.
It is
therefore the intent of section 2 of this act to clarify that these activities
are not subject to the sales tax.
Sec.
2. RCW
82.04.050 and 1993 sp.s. c 25 s 301 are each amended to read as follows:
(1)
"Sale at retail" or "retail sale" means every sale of
tangible personal property (including articles produced, fabricated, or
imprinted) to all persons irrespective of the nature of their business and
including, among others, without limiting the scope hereof, persons who
install, repair, clean, alter, improve, construct, or decorate real or personal
property of or for consumers other than a sale to a person who presents a
resale certificate under RCW 82.04.470 and who:
(a)
Purchases for the purpose of resale as tangible personal property in the
regular course of business without intervening use by such person; or
(b)
Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates
real or personal property of or for consumers, if such tangible personal
property becomes an ingredient or component of such real or personal property
without intervening use by such person; or
(c)
Purchases for the purpose of consuming the property purchased in producing for
sale a new article of tangible personal property or substance, of which such
property becomes an ingredient or component or is a chemical used in
processing, when the primary purpose of such chemical is to create a chemical
reaction directly through contact with an ingredient of a new article being
produced for sale; or
(d)
Purchases for the purpose of consuming the property purchased in producing
ferrosilicon which is subsequently used in producing magnesium for sale, if the
primary purpose of such property is to create a chemical reaction directly
through contact with an ingredient of ferrosilicon; or
(e)
Purchases for the purpose of providing the property to consumers as part of
competitive telephone service, as defined in RCW 82.04.065. The term shall
include every sale of tangible personal property which is used or consumed or
to be used or consumed in the performance of any activity classified as a
"sale at retail" or "retail sale" even though such property
is resold or utilized as provided in (a), (b), (c), (d), or (e) of this subsection
following such use. The term also means every sale of tangible personal
property to persons engaged in any business which is taxable under RCW
82.04.280 (2) and (7) and 82.04.290.
(2)
The term "sale at retail" or "retail sale" shall include
the sale of or charge made for tangible personal property consumed and/or for
labor and services rendered in respect to the following:
(a)
The installing, repairing, cleaning, altering, imprinting, or improving of
tangible personal property of or for consumers, including charges made for the
mere use of facilities in respect thereto, but excluding sales of laundry
service to members by nonprofit associations composed exclusively of nonprofit
hospitals, and excluding services rendered in respect to live animals, birds
and insects;
(b)
The constructing, repairing, decorating, or improving of new or existing
buildings or other structures under, upon, or above real property of or for
consumers, including the installing or attaching of any article of tangible
personal property therein or thereto, whether or not such personal property
becomes a part of the realty by virtue of installation, and shall also include
the sale of services or charges made for the clearing of land and the moving of
earth excepting the mere leveling of land used in commercial farming or
agriculture;
(c)
The charge for labor and services rendered in respect to constructing,
repairing, or improving any structure upon, above, or under any real property
owned by an owner who conveys the property by title, possession, or any other
means to the person performing such construction, repair, or improvement for
the purpose of performing such construction, repair, or improvement and the
property is then reconveyed by title, possession, or any other means to the
original owner;
(d)
The sale of or charge made for labor and services rendered in respect to the
cleaning, fumigating, razing or moving of existing buildings or structures, but
shall not include the charge made for janitorial services; and for purposes of
this section the term "janitorial services" shall mean those cleaning
and caretaking services ordinarily performed by commercial janitor service
businesses including, but not limited to, wall and window washing, floor
cleaning and waxing, and the cleaning in place of rugs, drapes and upholstery.
The term "janitorial services" does not include painting, papering,
repairing, furnace or septic tank cleaning, snow removal or sandblasting;
(e)
The sale of or charge made for labor and services rendered in respect to
automobile towing and similar automotive transportation services, but not in
respect to those required to report and pay taxes under chapter 82.16 RCW;
(f)
The sale of and charge made for the furnishing of lodging and all other
services by a hotel, rooming house, tourist court, motel, trailer camp, and the
granting of any similar license to use real property, as distinguished from the
renting or leasing of real property, and it shall be presumed that the
occupancy of real property for a continuous period of one month or more
constitutes a rental or lease of real property and not a mere license to use or
enjoy the same;
(g)
The sale of or charge made for tangible personal property, labor and services
to persons taxable under (a), (b), (c), (d), (e), and (f) of this subsection
when such sales or charges are for property, labor and services which are used
or consumed in whole or in part by such persons in the performance of any
activity defined as a "sale at retail" or "retail sale"
even though such property, labor and services may be resold after such use or
consumption. Nothing contained in this subsection shall be construed to modify
subsection (1) of this section and nothing contained in subsection (1) of this
section shall be construed to modify this subsection.
(3)
The term "sale at retail" or "retail sale" shall include
the sale of or charge made for personal, business, or professional services
including amounts designated as interest, rents, fees, admission, and other
service emoluments however designated, received by persons engaging in the
following business activities:
(a)
Amusement and recreation services including but not limited to golf, pool,
billiards, skating, bowling, ski lifts and tows, and others;
(b)
Abstract, title insurance, and escrow services;
(c)
Credit bureau services;
(d)
Automobile parking and storage garage services;
(e)
Landscape maintenance and horticultural services but excluding (i)
horticultural services provided to farmers and (ii) pruning, trimming,
repairing, removing, and clearing of trees and brush near electric transmission
or distribution lines or equipment, if performed by or at the direction of an
electric utility;
(f)
Service charges associated with tickets to professional sporting events;
(g)
Guided tours and guided charters; and
(h)
The following personal services: Physical fitness services, tanning salon
services, tattoo parlor services, massage services, steam bath services,
turkish bath services, escort services, and dating services.
(4)
The term shall also include the renting or leasing of tangible personal
property to consumers and the rental of equipment with an operator.
(5)
The term shall also include the providing of telephone service, as defined in RCW
82.04.065, to consumers.
(6)
The term shall not include the sale of or charge made for labor and services
rendered in respect to the building, repairing, or improving of any street,
place, road, highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel, or trestle which is owned by a
municipal corporation or political subdivision of the state or by the United
States and which is used or to be used primarily for foot or vehicular traffic
including mass transportation vehicles of any kind.
(7)
The term shall also not include sales of feed, seed, seedlings, fertilizer,
agents for enhanced pollination including insects such as bees, and spray
materials to persons who participate in the federal conservation reserve
program or its successor administered by the United States department of
agriculture, or to farmers for the purpose of producing for sale any
agricultural product, nor shall it include sales of chemical sprays or washes
to persons for the purpose of post-harvest treatment of fruit for the
prevention of scald, fungus, mold, or decay.
(8)
The term shall not include the sale of or charge made for labor and services
rendered in respect to the constructing, repairing, decorating, or improving of
new or existing buildings or other structures under, upon, or above real
property of or for the United States, any instrumentality thereof, or a county
or city housing authority created pursuant to chapter 35.82 RCW, including the
installing, or attaching of any article of tangible personal property therein
or thereto, whether or not such personal property becomes a part of the realty
by virtue of installation. Nor shall the term include the sale of services or
charges made for the clearing of land and the moving of earth of or for the
United States, any instrumentality thereof, or a county or city housing
authority.
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 July 1, 1995.
