AN ACT Relating to
taxation of massage services; amending RCW 82.04.050, 82.04.290, and
82.04.2201; 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. It is the intent of the
legislature that massage services be recognized as health care practitioners
for the purposes of business and occupation tax application. To achieve this
intent massage services are being removed from the definition of sale at retail
and retail sale.
Sec. 2. RCW 82.04.050 and 1995 c
39 s 2 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.The text of the following section has been vetoed by the
Governor. It is noted in bold italic.
*Sec. 3. RCW 82.04.290 and
1995 c 229 s 3 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 percent.
(2) Upon every
person engaging within this state in banking, loan, security, investment
management, investment advisory, or other financial businesses, other than or
in addition to those enumerated in subsection (3) of this section; 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 percent.
(3) Upon every
person engaging within this state in the business of providing international
investment management services, as to such persons, the amount of tax with
respect to such business shall be equal to the gross income or gross proceeds
of sales of the business multiplied by a rate of 0.275 percent.
(4) Upon every
person engaging within this state in the business of providing massage
services; 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 0.471 percent.
(5)
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)((, (2),
and (3))) through (4) 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 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
was vetoed. See message at end of chapter.The text of the following section has been vetoed by
the Governor. It is noted in bold italic.
*Sec. 4. RCW 82.04.2201 and
1995 c 229 s 2 are each amended to read as follows:
There is levied and
shall be collected for the period July 1, 1993, through June 30, 1997, from
every person for the act or privilege of engaging in business activities, as a
part of the tax imposed under RCW 82.04.220 through 82.04.280 and 82.04.290 (3)
and (((4))) (5), except RCW 82.04.250(1) and 82.04.260(15), an
additional tax equal to 4.5 percent multiplied by the tax payable under those
sections.
To
facilitate collection of these additional taxes, the department of revenue is
authorized to adjust the basic rates of persons to which this section applies
in such manner as to reflect the amount to the nearest one-thousandth of one
percent of the additional tax hereby imposed, adjusting ten-thousandths equal
to or greater than five ten-thousandths to the greater thousandth.
*Sec. 4
was vetoed. See message at end of chapter.
NEW SECTION. Sec.
5. 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.
