S‑0443.1      _____________________________________________






State of Washington      57th Legislature     2001 Regular Session


By Senators Snyder, Rasmussen, T. Sheldon, Gardner, Prentice and McCaslin


Read first time 01/10/2001.  Referred to Committee on Ways & Means.

_1      AN ACT Relating to sales and use taxation of nonprofit

_2  hospitals; adding a new section to chapter 82.08 RCW; and adding a

_3  new section to chapter 82.12 RCW.




_5      NEW SECTION.  Sec. 1.  A new section is added to chapter 82.08

_6  RCW to read as follows:

_7      (1) The tax levied by RCW 82.08.020 does not apply to:

_8      (a) The sale of or charge made for tangible personal property

_9  consumed and/or for labor and services rendered in respect to the

10  construction of new buildings or other structures, or the

11  expansion or renovation of existing buildings or other structures

12  for the purpose of increasing floor space or patient capacity, for

13  use as a nonprofit hospital in a rural county; and

14      (b) Sales of machinery and equipment related to the buildings

15  or other structures exempt under (a) of this subsection.

16      (2) Subsection (1) of this section only applies to labor and

17  services, machinery and equipment, or other tangible personal

18  property that is acquired before the construction is complete.

                               p. 1                       SB 5102


_1      (3) To be exempt under this section, the buildings or

_2  structures and the machinery and equipment must be financed with

_3  money donated to the nonprofit hospital for such construction and

_4  acquisition.  Application for exemption under this section must be

_5  made before initiation of the construction or acquisition of the

_6  machinery or equipment.  The application shall be made to the

_7  department in a form and manner prescribed by the department.  The

_8  application shall contain information regarding the location of

_9  the hospital, the source of the moneys to be used for the

10  construction or acquisition, and any other information required by

11  the department.  The department shall rule on the application within

12  sixty days.  The department shall issue a sales and use tax

13  exemption certificate for state and local sales and use taxes due

14  under this chapter and chapters 82.12 and 82.14 RCW for each

15  approved application.

16      (4) For purposes of this section and section 2 of this act:

17      (a) "Hospital" means a hospital as defined in RCW 70.41.020.

18      (b) "Machinery and equipment" means tangible personal property

19  of a capital nature which has a useful life of one year or more

20  that is of the type that would be depreciated for federal income

21  tax purposes under section 168 of the federal internal revenue

22  code of 1986 (26 U.S.C. Sec. 168), including such items as medical

23  fixtures and devices, furniture, computers, and beds, and tangible

24  personal property that becomes an ingredient or component thereof.

25      (c) "Nonprofit" means an organization exempt from federal

26  income tax under section 501(c)(3) of the federal internal revenue

27  code of 1986 (26 U.S.C. Sec. 501(c)(3)).

28      (d) "Rural county" means a county with a population density of

29  less than one hundred persons per square mile, as determined by

30  the office of financial management and published each year by the

31  department for the period July 1st to June 30th.


32      NEW SECTION.  Sec. 2.  A new section is added to chapter 82.12

33  RCW to read as follows:

34      (1) The provisions of this chapter do not apply with respect to

35  the use by a nonprofit hospital in a rural county of machinery and

36  equipment for which a sales and use tax exemption certificate was

37  issued under section 1 of this act.

SB 5102                        p. 2


_1      (2) The definitions in section 1 of this act apply to this

_2  section.


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                               p. 3                       SB 5102