CERTIFICATION OF ENROLLMENT

                        SENATE BILL 5688

                        55th Legislature

                      1997 Regular Session

Passed by the Senate April 8, 1997   YEAS 47   NAYS 0 President of the Senate Passed by the House April 17, 1997   YEAS 67   NAYS 31

CERTIFICATE I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is  SENATE BILL 5688 as passed by the Senate and the House of Representatives on the dates hereon set forth.

Speaker of the       House of Representatives

Secretary

Approved Place Style On Codes above, and Style Off Codes below.

FILED

Governor of the State of Washington

Secretary of State                   State of Washington

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                         SENATE BILL 5688

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             Passed Legislature - 1997 Regular Session

State of Washington      55th Legislature     1997 Regular Session

By Senators Strannigan and Johnson

Read first time 02/07/97.  Referred to Committee on Ways & Means.

Paying the business and occupation tax by property management companies for on-site employees.

    AN ACT Relating to business and occupation tax reimbursements and advances received by property management companies for the payment of wages to on-site employees; adding a new section to chapter 82.04 RCW; 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. The legislature finds that property owners often hire property management companies to manage their real property.  Frequently, the property management companies also manage the personnel who perform the necessary services at the property location.  In these cases, the property owners may pay the on-site personnel through the property management company.  The property management company is merely acting as a conduit for the property owner's payment to the personnel at the property site.

    This act is not intended to modify the taxation of amounts received by a property management company for purposes other than payment to on-site personnel.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.04 RCW to read as follows:

    This chapter shall not apply to amounts received by a property management company from the owner of a property for gross wages and benefits paid directly to or on behalf of on-site personnel from property management trust accounts that are required to be maintained under RCW 18.85.310.

    As used in this section, "on-site personnel" means a person who meets all of the following conditions:  (1) The person works primarily at the owner's property; (2) the person's duties include leasing property units, maintaining the property, collecting rents, or similar activities; and (3) pursuant to a written property management agreement, the person's compensation is the obligation of the property owner and not the property manager.

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 takes effect April 1, 1997.

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