BP BHEAD INT S [atlas:bill]

AN ACT Relating to excise tax exemptions for agricultural machinery and equipment used in field and turf grass seed farming; adding a new section to chapter 82.08 RCW; and adding a new section to chapter 82.12 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.08 RCW to read as follows:

(1) The tax levied by RCW 82.08.020 shall not apply to sales to a field and turf grass seed farmer of machinery and equipment used directly in field and turf grass seed farming, or to sales of or charges made for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the machinery and equipment, but only when the purchaser provides the seller with an exemption certificate in a form and manner prescribed by the department by rule, and the purchaser provides the department with a duplicate of the certificate or a summary of exempt sales as the department may require. The seller shall retain a copy of the certificate for the seller's files.

(2) For purposes of this section and section 2 of this act:

(a) "Farmer" is defined as provided in RCW 82.04.213.

(b) "Field and turf grass seed farmer" means a farmer who:

(i) Burned acreage dedicated to production of field or turf grass grown for seed under a valid permit issued by the department of ecology in 1995; or

(ii) Would have burned acreage dedicated to production of field or turf grass grown for seed in 1995 but did not because the acreage was planted in other crops under a crop rotation plan or was removed from production under a crop rotation plan.

(c) "Machinery and equipment" includes tangible personal property that becomes an ingredient or component thereof, including repair parts and replacement parts.

(d) "Machinery and equipment" does not include:

(i) Hand tools;

(ii) Property with a useful life of less than one year;

(iii) Buildings, other than machinery and equipment that is permanently affixed to or becomes a physical part of a building;

(iv) Building fixtures that are not integral to farming that are permanently affixed to and become a physical part of a building, such as utility systems for heating, ventilation, air conditioning, communications, plumbing, or electrical; and

(v) Vehicles that are not farm vehicles as defined in RCW 46.04.181.

(e) Machinery and equipment is "used directly in field and turf grass seed farming" if the machinery and equipment is used in:

(i) Planting, growing, producing, harvesting, or initial storage of field and turf grass seed; or

(ii) Movement of field and turf grass seed from the place of harvest to the place of initial storage.

NEW SECTION. Sec. 2. A new section is added to chapter 82.12 RCW to read as follows:

(1) The provisions of this chapter shall not apply in respect to the use by a field and turf grass seed farmer of machinery and equipment used directly in field and turf grass seed farming, but only when the user provides the department with:

(a) An exemption certificate in a form and manner prescribed by the department within sixty days of the first use of such machinery and equipment in this state; or

(b) An annual summary listing the machinery and equipment by January 31st of the year following the calendar year in which the machinery and equipment is first used in this state.

(2) The definitions in section 1 of this act apply to this section.