Z-0081.2  _______________________________________________

                          HOUSE BILL 1203

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State of Washington      57th Legislature     2001 Regular Session

By Representatives Cairnes and Morris; by request of Department of Revenue

Read first time 01/19/2001.  Referred to Committee on Finance.

Authorizing the department of revenue to modify sales tax exemption documentation and retention requirements for simplification purposes.

    AN ACT Relating to department of revenue authority regarding sales and use tax exemption documentation and retention requirements; adding a new section to chapter 82.32 RCW; and creating new sections.

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

NEW SECTION. Sec. 1.  The legislature finds that current sales and use tax exemption documentation requirements are often confusing and burdensome for retailers, taxpayers, and the state.  Additionally, the legislature notes the national efforts under way to simplify and streamline the sales and use tax, and that those efforts include a new system for retailers to use in processing sales and use tax exemptions.  The legislature further finds that it would be beneficial to the state and its residents to allow for the simplification of sales and use tax exemption requirements.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.32 RCW to read as follows:

    (1) The department is authorized to enter into agreements with sellers who meet the criteria in this section for a project on sales and use tax exemption requirements.  This project will allow the use of electronic data collection in lieu of paper certificates otherwise required by law, including the use of electronic signatures.

    (2) The object of the project is to determine whether using an electronic system and reviewing the data regarding the exempt transactions provides the same level of reliability as the current system while lessening the burden on the seller.

    (3) A business making both sales taxable and exempt under chapter 82.08 or 82.12 RCW, that has electronic data-collecting capabilities, and that wishes to participate in the project may make application to the department in such form and manner as the department may require.  To be eligible for such participation, a seller must demonstrate its capability to take part in the project and to provide data to the department in a form in which the data can be used by the department.  The department is not required to accept all applicants in this project and is not required to provide any reason for not selecting a participant.  A seller selected as a participant may be relieved of other sales and use tax exemption documentation requirements provided by law as covered by the project, and will be relieved of the good faith requirement under RCW 82.08.050 to the extent that it has made available to the department the data required by the project.

    (4)(a) Information received from a seller under this section is not subject to the provisions of RCW 82.32.330(4) (b) and (c).

    (b) The department may disclose information received under this section to a person under investigation or during any court or administrative proceeding against a person under investigation as provided in this subsection (4).  The disclosure must be in connection with the department's official duties relating to an audit, collection activity, or a civil or criminal investigation.  The disclosure may occur only when the person under investigation and the person in possession of data, materials, or documents are parties to the return or tax information to be disclosed.

NEW SECTION. Sec. 3.  The code reviser shall place a cross-reference note to section 2 of this act following RCW 82.08.050 and 82.12.040.

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