CERTIFICATION OF ENROLLMENT

SENATE BILL 6662

Chapter 338, Laws of 1998

55th Legislature

1998 Regular Session

PROPERTY MANAGERS' COMPENSATION--BUSINESS AND OCCUPATION TAX EXEMPTION

EFFECTIVE DATE: 7/1/98

Passed by the Senate February 16, 1998

YEAS 47 NAYS 0

BRAD OWEN

President of the Senate

Passed by the House March 10, 1998

YEAS 88 NAYS 6

CERTIFICATE

I, Mike O=Connell, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SENATE BILL 6662 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 April 3, 1998

FILED

April 3, 1998 - 3:15 p.m.

GARY LOCKE

Governor of the State of Washington

Secretary of State

State of Washington

_______________________________________________

SENATE BILL 6662

_______________________________________________

Passed Legislature - 1998 Regular Session

State of Washington 55th Legislature 1998 Regular Session

By Senators Strannigan, T. Sheldon and Schow

Read first time 01/27/98. Referred to Committee on Ways & Means.

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; and providing an effective date.

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:

(1) This chapter does 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.

(2) As used in this section, "on-site personnel" means a person who meets all of the following conditions: (a) The person works primarily at the owner's property; (b) the person's duties include leasing property units, maintaining the property, collecting rents, or similar activities; and (c) under a written property management agreement: (i) The person's compensation is the ultimate obligation of the property owner and not the property manager; (ii) the property manager is liable for payment only as agent of the owner; and (iii) the property manager is the agent of the owner with respect to the on-site personnel and that all actions, including, but not limited to, hiring, firing, compensation, and conditions of employment, taken by the property manager with respect to the on-site personnel are subject to the approval of the property owner.

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