SENATE BILL REPORT

                   SB 5559

               As Passed Senate, April 14, 1997

Title:  An act relating to exempting unassisted self‑service motor vehicle wash, wax, and vacuum services rendered through coin‑operated devices from sales and use taxes.

Brief Description:  Exempting coin‑operated services of car washes from sales and use tax.

Sponsors:  Senators Hale, West, Loveland and Anderson.

Brief History:

Committee Activity:  Ways & Means:  3/6/97, 3/27/97 [DP].

Passed Senate, 4/14/97, 32-13.

SENATE COMMITTEE ON WAYS & MEANS

Majority Report:  Do pass.

  Signed by Senators West, Chair; Deccio, Vice Chair; Strannigan, Vice Chair; Bauer, Hochstatter, Loveland, McDonald, Rossi, Swecker, Winsley and Zarelli.

Staff:  Terry Wilson (786-7433)

Background:  The sales tax is imposed on each retail sale of most articles of tangible personal property and certain services.  Taxable services include construction, repair, telephone, lodging of less than 30 days, physical fitness, and some recreation and amusement services.  The use tax is imposed on the use of articles of tangible personal property when the sale or acquisition has not been subject to the sales tax.  The use tax commonly applies to purchases made from out-of-state firms.

Summary of Bill:  A sales and use tax exemption is provided for self-service motor vehicle wash and wax facilities.  The exemption includes the service of washing, waxing, and vacuuming a motor vehicle or other tangible personal property, if the purchaser or user of the service washes, waxes, or vacuums the person's motor vehicle or other tangible property at the facility, exclusively by means of automatic or manually operated coin-operated devices belonging to the vendor, without assistance from employees.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This only applies to self service facilities.  Most have no attendants.  The standard cost is $4 per car.  The sales tax is a burden.  Prices have not been raised in 4.5 years.  We do not want to chase customers away.  These businesses are regulated in terms of waste disposal.  Ohio repealed its tax and tax revenues in the state did not decline but increased substantially because of the new investment.

Testimony Against:  None.

Testified:  PRO:  Sally Kirkpatrick, Puget Sound Car Wash Assn.; Mark Hoidal, General Car Wash; Jim Zellick, Splash n Dash Car Wash.