S-4695

AN ACT Relating to tax exemption from the state share of labor and services on higher education facility construction; amending RCW 81.104.170; adding new sections to chapter 82.08 RCW; adding a new section to chapter 82.14 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.32 RCW; creating a new section; and providing an effective date.

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

NEW SECTION. Sec. 1. It is the legislature's intent to provide to the state institutions of higher education a partial exemption from the state share of the retail sales tax related to construction of facilities. The partial exemption is intended to represent the amount of the contract cost that is typically spent on labor and services.

NEW SECTION. Sec. 2. A new section is added to chapter 82.08 RCW to read as follows:

The tax levied by RCW 82.08.020 does not apply to fifty percent of the selling price in the case of sales of or charges made for either tangible personal property consumed or labor and services rendered, or both, in respect to land clearing, earth moving, site preparation, constructing, repairing, decorating, renovating, expanding, or improving of new or existing buildings, structures, or facilities or any other improvement, under, upon, or above real property of or for an institution of higher education, as defined in RCW 28B.10.016.

NEW SECTION. Sec. 3. A new section is added to chapter 82.14 RCW to read as follows:

The exemption in section 2 of this act is for the state portion of the sales tax and does not extend to the tax imposed in this chapter.

Sec. 4. RCW 81.104.170 and 1997 c 450 s 5 are each amended to read as follows:

Cities that operate transit systems, county transportation authorities, metropolitan municipal corporations, public transportation benefit areas, and regional transit authorities may submit an authorizing proposition to the voters and if approved by a majority of persons voting, fix and impose a sales and use tax in accordance with the terms of this chapter, solely for the purpose of providing high capacity transportation service.

The tax authorized pursuant to this section shall be in addition to the tax authorized by RCW 82.14.030 and shall be collected from those persons who are taxable by the state pursuant to chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the taxing district. The maximum rate of such tax shall be approved by the voters and shall not exceed one percent of the selling price (in the case of a sales tax) or value of the article used (in the case of a use tax). The maximum rate of such tax that may be imposed shall not exceed nine‑tenths of one percent in any county that imposes a tax under RCW 82.14.340, or within a regional transit authority if any county within the authority imposes a tax under RCW 82.14.340. The exemptions in RCW 82.08.820 and 82.12.820 are for the state portion of the sales and use tax and do not extend to the tax authorized in this section.

The exemption in section 2 of this act is for the state portion of the sales tax and does not extend to the tax imposed in this chapter.

NEW SECTION. Sec. 5. A new section is added to chapter 82.08 RCW to read as follows:

A person who is engaged in the business of building, constructing, repairing, decorating, or improving a new or existing street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle, or 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 under chapter 35.82 RCW shall pay the lesser of: (1) Sales and use tax imposed as a consumer of tangible personal property of which the person is a consumer as defined in RCW 82.04.190 (4) or (6); or (2) the amount of tax that would be due from the buyer if the transaction were partially exempt under section 2 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.12 RCW to read as follows:

A person who is engaged in the business of building, constructing, repairing, decorating, or improving a new or existing street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle, or 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 under chapter 35.82 RCW shall report tax imposed under this chapter on the basis of section 5 of this act. Use tax is due under this chapter unless the taxpayer pays under section 5(2) of this act.

NEW SECTION. Sec. 7. A new section is added to chapter 82.32 RCW to read as follows:

The department may develop and institute a tax reporting method whereby the taxpayer uses deductions, credits, or other accounting techniques, as directed by the department, to allow the department to administer, and the taxpayer to report, tax as affected by chapter . . ., Laws of 1998 (this act) simply and efficiently. Taxpayers and sellers affected by chapter . . ., Laws of 1998 (this act) shall keep their records in a form and manner as directed by the department so that the department can distinguish between taxable and exempt transactions.

NEW SECTION. Sec. 8. This act takes effect July 1, 1998.