1361 AAS 04/12/01

1361 AAS 04/12/01 004

HB 1361 - S AMD 304

By Senators Brown, Sheldon, T and Rossi

ADOPTED 04/12/01

On page 17, after line 18, insert the following:

"NEW SECTION. Sec. 18. The legislature finds that the application of the business and occupation tax deduction provided in RCW 82.04.4281 for investment income of persons other than those engaging in "banking, loan, security, or other financial businesses" has been the subject of disagreement between taxpayers and the state. Decisions of the supreme court have provided some broad guidelines and principles for interpretation of the deduction provided in RCW 82.04.4281, but these decisions have not provided the certainty and clarity that is desired by taxpayers and the state. Therefore, it is the intent of the legislature to delay change in the manner or extent of taxation of the investment income until definitions or standards can be developed and enacted by the Legislature.

NEW SECTION. Sec. 19. A new section is added to chapter 82.04 RCW to read as follows:

(1) The department of revenue shall not assess nor impose business and occupation tax on investment income of persons engaging in business activities of a character that have not previously been determined by the department to be an "other financial business" under RCW 82.04.4281 through:

(a) A final decision of a court of record. However, this subsection shall not be construed to deny the deduction to any person other than the specific taxpayer covered in the court's decision;

(b) Excise tax advisories published prior to January 1, 2001; or

(c) Rulings or determinations issued by the department of revenue to a specific taxpayer prior to January 1, 2001. However, this subsection shall not be construed to deny the deduction to any person other than the specific taxpayer covered in the ruling or determination.

(2) Nothing in this act shall be construed to prohibit the department of revenue from granting the deduction by means of revocation of previous determinations set forth in subsections (1)(a),(b), or (c) of this section.

(3) This section expires July 1, 2002.

NEW SECTION. Sec. 20. The department of revenue shall report to the fiscal committees of the legislature by November 30, 2001, on the progress made in working with affected businesses on potential amendments to RCW 82.04.4281 which would clarify the application of RCW 82.04.4281 to other financial businesses."

Renumber the sections consecutively and correct any internal references accordingly.

HB 1361 - S AMD 304

By Senators Brown, Sheldon, T and Rossi

ADOPTED 04/12/01

On page 1, on line 5 of the title, after "82.16 RCW;" insert "adding a new section to chapter 82.04 RCW;" and on line 6, strike "creating a new section;" and insert "creating new sections;"