CERTIFICATION OF ENROLLMENT

SUBSTITUTE SENATE BILL 5359

Chapter 302, Laws of 1997

55th Legislature

1997 Regular Session

MATERIALS USED BY SMALL COMPANIES FOR AIRCRAFT PART, EQUIPMENT, AND MODIFICATION DESIGN AND DEVELOPMENT--SALES AND USE TAXATION CLARIFICATION

EFFECTIVE DATE: 7/1/97

Passed by the Senate April 21, 1997

YEAS 43 NAYS 1

BRAD OWEN

President of the Senate

Passed by the House April 15, 1997

YEAS 97 NAYS 0

CERTIFICATE

I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SUBSTITUTE SENATE BILL 5359 as passed by the Senate and the House of Representatives on the dates hereon set forth.

CLYDE BALLARD

Speaker of the

House of Representatives

MIKE O'CONNELL

Secretary

Approved May 9, 1997

FILED

May 9, 1997 - 1:49 p.m.

GARY LOCKE

Governor of the State of Washington

Secretary of State

State of Washington

_______________________________________________

SUBSTITUTE SENATE BILL 5359

_______________________________________________

AS AMENDED BY THE HOUSE

Passed Legislature - 1997 Regular Session

State of Washington 55th Legislature 1997 Regular Session

By Senate Committee on Ways & Means (originally sponsored by Senators Swecker, Fraser, West and Winsley)

Read first time 02/20/97.

AN ACT Relating to clarifying the exemption from sales and use taxation of the materials used by small companies in the design and development of aircraft parts, auxiliary equipment, and aircraft modification; amending RCW 82.08.02566 and 82.12.02566; providing an effective date; and declaring an emergency.

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

Sec. 1. RCW 82.08.02566 and 1996 c 247 s 4 are each amended to read as follows:

(1) The tax levied by RCW 82.08.020 shall not apply to sales of ((materials used in designing and developing aircraft parts, auxiliary equipment, and aircraft modification whether from enterprise funds or on a contract or fee basis for a taxpayer with gross sales of less than twenty million dollars per year. This exemption may not exceed one hundred thousand dollars for a taxpayer in a year)) tangible personal property incorporated into a prototype for aircraft parts, auxiliary equipment, or modifications; or to sales of tangible personal property that at one time is incorporated into the prototype but is later destroyed in the testing or development of the prototype.

(2) This exemption does not apply to sales to any person whose total taxable amount during the immediately preceding calendar year exceeds twenty million dollars. For purposes of this section, "total taxable amount" means gross income of the business and value of products manufactured, less any amounts for which a credit is allowed under RCW 82.04.440.

(3) State and local taxes for which an exemption is received under this section and RCW 82.12.02566 shall not exceed one hundred thousand dollars for any person during any calendar year.

Sec. 2. RCW 82.12.02566 and 1996 c 247 s 5 are each amended to read as follows:

(1) The provisions of this chapter shall not apply with respect to the use of ((materials used in designing and developing aircraft parts, auxiliary equipment, and aircraft modification whether from enterprise funds or on a contract or fee basis for a taxpayer with gross sales of less than twenty million dollars per year. This exemption may not exceed one hundred thousand dollars for a taxpayer in a year)) tangible personal property incorporated into a prototype for aircraft parts, auxiliary equipment, or modifications; or in respect to the use of tangible personal property that at one time is incorporated into the prototype but is later destroyed in the testing or development of the prototype.

(2) This exemption does not apply in respect to the use of tangible personal property by any person whose total taxable amount during the immediately preceding calendar year exceeds twenty million dollars. For purposes of this section, "total taxable amount" means gross income of the business and value of products manufactured, less any amounts for which a credit is allowed under RCW 82.04.440.

(3) State and local taxes for which an exemption is received under this section and RCW 82.08.02566 shall not exceed one hundred thousand dollars for any person during any calendar year.

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 July 1, 1997.