H‑0279.2   _____________________________________________

HOUSE BILL 2031

           _____________________________________________

State of Washington      57th Legislature     2001 Regular Session

By Representatives Cairnes, Crouse, Poulsen, Morris, Reardon, Delvin and Barlean

Read first time 02/13/2001.  Referred to Committee on Technology, Telecommunications & Energy.

_1      AN ACT Relating to limiting the taxation of pay phone services;

_2  amending RCW 35.21.710, 35.21.712, 35A.82.050, and 35A.82.055; and

_3  providing an effective date.

_4  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

_5      Sec. 1.  RCW 35.21.710 and 1983 2nd ex.s. c 3 s 33 are each amended

_6  to read as follows:

_7      Any city which imposes a license fee or tax upon business

_8  activities consisting of the making of retail sales of tangible

_9  personal property which are measured by gross receipts or gross

10  income from such sales, shall impose such tax at a single uniform

11  rate upon all such business activities.  The taxing authority

12  granted to cities for taxes upon business activities measured by

13  gross receipts or gross income from sales shall not exceed a rate

14  of .0020; except that any city with an adopted ordinance at a

15  higher rate, as of January 1, 1982 shall be limited to a maximum

16  increase of ten percent of the January 1982 rate, not to exceed an

17  annual incremental increase of two percent of current rate:

18  PROVIDED, That any adopted ordinance which classifies according to

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_1  different types of business or services shall be subject to both

_2  the ten percent and the two percent annual incremental increase

_3  limitation on each tax rate:  PROVIDED FURTHER, That all surtaxes on

_4  business and occupation classifications in effect as of January 1,

_5  1982, shall expire no later than December 31, 1982, or by

_6  expiration date established by local ordinance.  Cities which impose

_7  a license fee or tax upon business activities consisting of the

_8  making of retail sales of tangible personal property which are

_9  measured by gross receipts or gross income from such sales shall

10  be required to submit an annual report to the state auditor

11  identifying the rate established and the revenues received from

12  each fee or tax.  This section shall not apply to any business

13  activities subject to the tax imposed by chapter 82.16 RCW.  For

14  purposes of this section, the providing to consumers of

15  competitive telephone service, as defined in RCW 82.04.065, or the

16  providing of pay phone service, shall be ((deemed to be the))

17  subject to tax at the same rate as business activities consisting

18  of the making of retail sales of tangible personal property.  As

19  used in this section, "pay phone service" means making telephone

20  service available to the public on a fee-per-call basis,

21  independent of any other commercial transaction, for the purpose

22  of making telephone calls, whether the telephone is coin-operated

23  or is activated by calling collect or using a calling card.

24      Sec. 2.  RCW 35.21.712 and 1983 2nd ex.s. c 3 s 35 are each amended

25  to read as follows:

26      Any city which imposes a license fee or tax upon the business

27  activity of engaging in the telephone business, as defined in RCW

28  82.04.065, which is measured by gross receipts or gross income

29  from the business shall impose the tax at a uniform rate on all

30  persons engaged in the telephone business in the city.

31      This section does not apply to the providing of competitive

32  telephone service as defined in RCW 82.04.065 or to the providing

33  of pay phone service as defined in RCW 35.21.710.

34     Sec. 3.  RCW 35A.82.050 and 1983 2nd ex.s. c 3 s 34 are each

35  amended to read as follows:

36      Any code city which imposes a license fee or tax upon business

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_1  activities consisting of the making of retail sales of tangible

_2  personal property which are measured by gross receipts or gross

_3  income from such sales, shall impose such tax at a single uniform

_4  rate upon all such business activities.  This section shall not

_5  apply to any business activities subject to the tax imposed by

_6  chapter 82.16 RCW.  For purposes of this section, the providing to

_7  consumers of competitive telephone service, as defined in RCW

_8  82.04.065, or the providing of pay phone service as defined in RCW

_9  35.21.710, shall be ((deemed to be the)) subject to tax at the

10  same rate as business activities consisting of the making of

11  retail sales of tangible personal property.

12      Sec. 4.  RCW 35A.82.055 and 1983 2nd ex.s. c 3 s 36 are each

13  amended to read as follows:

14      Any code city which imposes a license fee or tax upon the

15  business activity of engaging in the telephone business, as

16  defined in RCW 82.04.065, which is measured by gross receipts or

17  gross income from the business shall impose the tax at a uniform

18  rate on all persons engaged in the telephone business in the code

19  city.

20      This section does not apply to the providing of competitive

21  telephone service as defined in RCW 82.04.065 or to the providing

22  of pay phone service as defined in RCW 35.21.710.

23      NEW SECTION. Sec. 5.  This act takes effect August 1, 2001.

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