CERTIFICATION OF ENROLLMENT

SUBSTITUTE HOUSE BILL 1261

Chapter 238, Laws of 1997

55th Legislature

1997 Regular Session

BUSINESS AND OCCUPATION TAX SMALL BUSINESS CREDIT--STANDARDIZED TABLE

EFFECTIVE DATE: 7/27/97

Passed by the House April 19, 1997

Yeas 89 Nays 0

CLYDE BALLARD

Speaker of the

House of Representatives

Passed by the Senate April 10, 1997

Yeas 47 Nays 0

CERTIFICATE

I, Timothy A. Martin, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 1261 as passed by the House of Representatives and the Senate on the dates hereon set forth.

BRAD OWEN

President of the Senate

TIMOTHY A. MARTIN

Chief Clerk

Approved May 1, 1997

FILED

May 1, 1997 - 11:12 a.m.

GARY LOCKE

Governor of the State of Washington

Secretary of State

State of Washington

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SUBSTITUTE HOUSE BILL 1261

_______________________________________________

Passed Legislature - 1997 Regular Session

AS AMENDED BY THE SENATE

State of Washington 55th Legislature 1997 Regular Session

By House Committee on Finance (originally sponsored by Representatives Mulliken, Pennington, Boldt and Wensman; by request of Department of Revenue)

Read first time 02/27/97.

AN ACT Relating to the business and occupation tax small business credit; amending RCW 82.04.4451; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature finds that many businesses have difficulty applying the small business credit under RCW 82.04.4451. Further, the legislature appreciates the valuable time and resources small businesses expend on calculating the amount of credit based upon a statutory formula. For the purpose of tax simplification, it is the intent of this act to direct the department of revenue to create a schedule, in standard increments, to replace required calculations for the small business credit. Each taxpayer can make reference to the taxpayer's tax range on the schedule and find the amount of the taxpayer's small business credit. Further, no taxpayer will owe a greater amount of tax nor will any taxpayer be responsible for a greater amount of taxes otherwise due.

Sec. 2. RCW 82.04.4451 and 1994 sp.s. c 2 s 1 are each amended to read as follows:

(1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. The maximum credit for a taxpayer for a reporting period is thirty-five dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.

(2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.

(3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.

(4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table shall be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection shall be used by all taxpayers in taking the credit provided in this section.