CERTIFICATION OF ENROLLMENT

                        SENATE BILL 6449

                        55th Legislature

                      1998 Regular Session

Passed by the Senate February 13, 1998   YEAS 48   NAYS 0 President of the Senate Passed by the House March 10, 1998   YEAS 94   NAYS 0

CERTIFICATE I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is  SENATE BILL 6449 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

          _______________________________________________

                         SENATE BILL 6449

          _______________________________________________

             Passed Legislature - 1998 Regular Session

State of Washington      55th Legislature     1998 Regular Session

By Senators West, Anderson, Kohl, T. Sheldon, Jacobsen, Goings and Winsley; by request of Governor Locke

Read first time 01/19/98.  Referred to Committee on Ways & Means.

Specifying a business and occupation tax rate for income in the nature of royalties for the use of intangible rights.

    AN ACT Relating to the business and occupation taxation of income in the nature of royalties for the use of intangible rights; amending RCW 82.04.290; adding a new section to chapter 82.04 RCW; and providing an effective date.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 82.04 RCW to read as follows:

    Upon every person engaging within this state in the business of receiving income from royalties or charges in the nature of royalties for the granting of intangible rights, such as copyrights, licenses, patents, or franchise fees, the amount of tax with respect to such business shall be equal to the gross income from royalties or charges in the nature of royalties from the business multiplied by the rate of 0.484 percent.

    "Royalties" means compensation for the use of intangible property, such as copyrights, patents, licenses, franchises, trademarks, trade names, and similar items.  It does not include compensation for any natural resource.

    Sec. 2.  RCW 82.04.290 and 1997 c 7 s 2 are each amended to read as follows:

    (1) 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.

    (2) 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, section 1 of this act, and subsection (1) 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 1.5 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.

NEW SECTION. Sec. 3.  This act takes effect July 1, 1998.

                            --- END ---