AN ACT Relating to
excise tax treatment of linen and uniform supply services; amending RCW
82.14.020; adding a new section to chapter 82.08 RCW; creating a new section;
providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. The legislature finds
that because of the mixed retailing nature of linen and uniform supply
services, they have been incorrectly sited for tax purposes. As a result, some
companies that perform some activities related to this activity outside the
state of Washington have not been required to collect retail sales taxes upon
linen and uniform supply services provided to Washington customers. The
activity has aspects of both the rental of tangible personal property and
retail services related to tangible personal property. This error in tax
treatment provides an incentive for businesses to locate some of their
functions out of state. In-state businesses cannot compete if their
out-of-state competitors are not required to collect sales tax for services
provided to the same customers.
The purpose of this act
is to clarify the taxable situs and nature of linen and uniform supply
services.
NEW SECTION. Sec.
2. A new section is added
to chapter 82.08 RCW to read as follows:
For purposes of this
chapter, a retail sale of linen and uniform supply services is deemed to occur
at the place of delivery to the customer. "Linen and uniform supply
services" means the activity of providing customers with a supply of clean
linen, towels, uniforms, gowns, protective apparel, clean room apparel, mats,
rugs, and similar items, whether ownership of the item is in the person
operating the linen and uniform supply service or in the customer. The term
includes supply services operating their own cleaning establishments as well as
those contracting with other laundry or dry cleaning businesses.
Sec. 3. RCW 82.14.020 and 1997 c
201 s 1 are each amended to read as follows:
For purposes of this
chapter:
(1) A retail sale
consisting solely of the sale of tangible personal property shall be deemed to
have occurred at the retail outlet at or from which delivery is made to the
consumer;
(2) A retail sale
consisting essentially of the performance of personal business or professional
services shall be deemed to have occurred at the place at which such services
were primarily performed, except that for the performance of a tow truck
service, as defined in RCW 46.55.010, the retail sale shall be deemed to have
occurred at the place of business of the operator of the tow truck service;
(3) A retail sale
consisting of the rental of tangible personal property shall be deemed to have
occurred (a) in the case of a rental involving periodic rental payments, at the
primary place of use by the lessee during the period covered by each payment,
or (b) in all other cases, at the place of first use by the lessee;
(4) A retail sale
within the scope of ((the second paragraph of)) RCW 82.04.050(2),
and a retail sale of taxable personal property to be installed by the seller
shall be deemed to have occurred at the place where the labor and services
involved were primarily performed;
(5) A retail sale
consisting of the providing to a consumer of telephone service, as defined in
RCW 82.04.065, other than a sale of tangible personal property under subsection
(1) of this section or a rental of tangible personal property under subsection
(3) of this section, shall be deemed to have occurred at the situs of the
telephone or other instrument through which the telephone service is rendered;
(6) A retail sale of
linen and uniform supply services is deemed to occur as provided in section 2
of this act.
(7)
"City" means a city or town;
(((7))) (8)
The meaning ascribed to words and phrases in chapters 82.04, 82.08 and 82.12
RCW, as now or hereafter amended, insofar as applicable, shall have full force
and effect with respect to taxes imposed under authority of this chapter;
(((8))) (9)
"Taxable event" shall mean any retail sale, or any use of an article
of tangible personal property, upon which a state tax is imposed pursuant to
chapter 82.08 or 82.12 RCW, as they now exist or may hereafter be amended:
PROVIDED, HOWEVER, That the term shall not include a retail sale taxable
pursuant to RCW 82.08.150, as now or hereafter amended;
(((9))) (10)
"Treasurer or other legal depository" shall mean the treasurer or
legal depository of a county or city.
NEW
SECTION. Sec. 4. 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, 2001.
