[atlas:bill]

AN ACT Relating to providing the necessary revenues for the support of health care for the citizens of Washington state; amending RCW 82.03.130, 82.03.140, 48.14.080, 82.04.4328, 82.04.260, 82.04.4289, 82.08.150, and 66.24.290; adding a new section to chapter 82.04 RCW; adding a new title to the Revised Code of Washington to be codified as Title 82A RCW; creating new sections; repealing RCW 48.14.0201, 82.04.220, 82.04.230, 82.04.240, 82.04.2403, 82.04.250, 82.04.255, 82.04.270, 82.04.280, 82.04.290, 82.04.290, 82.04.293, 82.04.297, 82.04.310, 82.04.312, 82.04.315, 82.04.317, 82.04.320, 82.04.322, 82.04.324, 82.04.327, 82.04.330, 82.04.333, 82.04.335, 82.04.337, 82.04.339, 82.04.3395, 82.04.340, 82.04.350, 82.04.355, 82.04.360, 82.04.363, 82.04.367, 82.04.368, 82.04.370, 82.04.380, 82.04.385, 82.04.390, 82.04.392, 82.04.395, 82.04.397, 82.04.399, 82.04.405, 82.04.408, 82.04.410, 82.04.415, 82.04.418, 82.04.419, 82.04.421, 82.04.423, 82.04.425, 82.04.4271, 82.04.4281, 82.04.4282, 82.04.4283, 82.04.4284, 82.04.4285, 82.04.4286, 82.04.4287, 82.04.4291, 82.04.4292, 82.04.4293, 82.04.4294, 82.04.4295, 82.04.4296, 82.04.4297, 82.04.4298, 82.04.431, 82.04.432, 82.04.4322, 82.04.4324, 82.04.4326, 82.04.4327, 82.04.4329, 82.04.433, 82.04.4331, 82.04.4333, 82.04.434, 82.04.440, 82.04.4451, 82.04.4452, 82.04.4453, 82.04.4454, 82.04.460, 82.04.480, 82.04.500, 82.04.510, 82.04.600, 82.04.900, 82.04.331, 82.04.332, 82.04.3651, 82.04.394, 82.04.416, 82.04.44525, 82.16.010, 82.16.020, 82.16.030, 82.16.040, 82.16.042, 82.16.047, 82.16.048, 82.16.049, 82.16.050, 82.16.053, 82.16.055, 82.16.060, 82.16.080, 82.16.090, and 82.16.046; prescribing penalties; and providing an effective date.

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

PART I

GENERAL PROVISIONS

NEW SECTION. Sec. 101. INTENT. It is the intent of the legislature in adopting this act to provide the necessary revenues for the support of health care for citizens of this state.

PART II

DEFINITIONS

NEW SECTION. Sec. 201. INTRODUCTORY. The definitions in this chapter apply throughout this title unless the context clearly requires otherwise.

NEW SECTION. Sec. 202. ADJUSTED GROSS INCOME. "Adjusted gross income" means adjusted gross income as determined under the internal revenue code.

NEW SECTION. Sec. 203. DEPARTMENT. "Department" means the state department of revenue.

NEW SECTION. Sec. 204. DIRECTOR. "Director" means the director of revenue.

NEW SECTION. Sec. 205. FEDERAL BASE INCOME. "Federal base income" means adjusted gross income.

NEW SECTION. Sec. 206. INDIVIDUAL. "Individual" means a natural person.

NEW SECTION. Sec. 207. INTERNAL REVENUE CODE. "Internal revenue code" means the federal internal revenue code of 1986, as amended, as existing on January 1, 2002.

NEW SECTION. Sec. 208. PERSON. "Person" has the meaning given in RCW 82.04.030.

NEW SECTION. Sec. 209. RESIDENT. "Resident" includes an individual who:

(1) Has resided in this state for the entire tax year;

(2) Is domiciled in this state unless the individual:

(a) Does not maintain a permanent place of abode in this state;

(b) Does not maintain a permanent place of abode elsewhere;

(3) Is not domiciled in this state, but maintains a permanent place of abode in this state and spends in the aggregate more than one hundred eighty-three days of the tax year in this state unless the individual proves that the individual is in the state only for temporary or transitory purposes; or

(4) Claims the state of Washington as the individual's tax home for federal income tax purposes.

NEW SECTION. Sec. 210. TAXABLE INCOME. "Taxable income" means federal base income as modified under sections 401 through 408 of this act.

NEW SECTION. Sec. 211. TAXABLE YEAR. "Taxable year" means the taxpayer's taxable year as defined under the internal revenue code.

NEW SECTION. Sec. 212. TAXPAYER. "Taxpayer" means a person receiving income subject to tax under this title.

NEW SECTION. Sec. 213. DEFINITION OF TERMS GENERALLY. Except as provided in this chapter, any term used in this title has the same meaning as when used in a comparable context in the internal revenue code.

PART III

DETERMINATION OF TAX

NEW SECTION. Sec. 301. TAX IMPOSED‑-RATE. A tax is imposed at the rate of 1.0 percent on all taxable income of each person for each taxable year. The state treasurer, upon receipt of any payments of tax, penalty, interest, or fees collected under this title, shall deposit them to the credit of the health services account created under RCW 43.72.900.

NEW SECTION. Sec. 302. CREDIT FOR INCOME TAXES DUE ANOTHER JURISDICTION. (1) A resident individual is allowed a credit against the tax imposed under this title for the amount of any income tax imposed by another state, foreign country, or political subdivision thereof on income taxed under this title, subject to the following conditions:

(a) The credit is allowed only for taxes imposed by the other jurisdiction on net income from sources within that jurisdiction; and

(b) The amount of the credit may not exceed the smaller of:

(i) The amount of tax paid to the other jurisdiction on net income from sources within the other jurisdiction; or

(ii) The amount of tax due under this title multiplied by a fraction. The numerator of the fraction is the portion of the taxpayer's adjusted gross income subject to tax in the other jurisdiction. The denominator of the fraction is the taxpayer's taxable income. The fraction may not be greater than one.

(2) If, in lieu of a credit similar to the credit allowed under subsection (1) of this section, the laws of the taxpayer's place of residence contain a provision exempting a resident of this state from liability for the payment of income taxes on income earned for personal services performed in that place, then the director may enter into a reciprocal agreement with that place providing a similar tax exemption for its residents on income earned for personal services performed in this state.

NEW SECTION. Sec. 303. DUAL RESIDENCE. If an individual is regarded as a resident both of this state and another jurisdiction for personal income tax purposes, the department shall reduce the tax on that portion of the taxpayer's income that is subjected to tax in both jurisdictions solely by virtue of dual residence, if the other taxing jurisdiction allows a similar reduction. The reduction must equal the lower of the two taxes applicable to the income taxed twice multiplied by a fraction. The numerator of the fraction is the tax imposed by this state on the income taxed twice. The denominator of the fraction is the tax imposed by both jurisdictions on the income taxed twice. The fraction may not be greater than one.

PART IV

TAXABLE INCOME MODIFICATIONS

NEW SECTION. Sec. 401. INTRODUCTORY. In computing taxable income, modifications must be made to the taxpayer's adjusted gross income as required under this chapter and chapter 82A.‑- RCW (sections 501 and 502 of this act), unless the modification has the effect of duplicating an item of income or deduction.

NEW SECTION. Sec. 402. STATE AND LOCAL BONDS. To adjusted gross income, add income that has been excluded under section 103 of the internal revenue code in computing adjusted gross income, except interest on obligations of the state of Washington or political subdivisions of the state of Washington.

NEW SECTION. Sec. 403. STATE AND LOCAL INCOME TAXES‑-BUSINESS AND OCCUPATION, PUBLIC UTILITY TAXES‑-NET OPERATING LOSS. To adjusted gross income, add:

(1) Taxes on or measured by net income that have been deducted under the internal revenue code in computing federal base income; and

(2) The amount of taxes paid that are deductible for federal purposes, but for which a business and occupation tax credit or public utility tax credit, or both, is allowed.

NEW SECTION. Sec. 404. PERSONAL DEDUCTION. There is allowed as a deduction from federal base income a personal deduction equal to one hundred thousand dollars.

NEW SECTION. Sec. 405. NET OPERATING LOSS. There is allowed as a deduction from federal base income the amount of net operating loss as allowed in section 172 of the internal revenue code. The calculation of the loss amount may reflect the modifications to federal base income as provided in this title and a net operating loss deduction may include a loss carried forward to the tax year but may not include a loss carried back from a future year.

NEW SECTION. Sec. 406. CARRYOVERS. To adjusted gross income, add amounts that have been deducted in computing adjusted gross income to the extent the amounts have been carried over from taxable years ending before the effective date of this section.

NEW SECTION. Sec. 407. FEDERAL BONDS. From adjusted gross income, deduct, to the extent included in adjusted gross income, income derived from obligations of the United States that this state is prohibited by federal law from subjecting to a net income tax. However, the amount deducted under this section must be reduced by any expense, including amortizable bond premium, incurred in the production of the income to the extent the expense has been deducted in calculating adjusted gross income.

NEW SECTION. Sec. 408. TAX RETURNS FOR FRACTIONAL YEAR. If the first taxable year of a taxpayer with respect to which a tax is imposed by this title ends before December 31, 2002, referred to in this section as a "fractional taxable year," the taxable income for the fractional taxable year must be the taxpayer's taxable income for the entire taxable year, adjusted by one of the following methods, at the taxpayer's election:

(1) The taxable income must be multiplied by a fraction. The numerator of the fraction is the number of days in the fractional taxable year. The denominator of the fraction is the number of days in the entire taxable year; or

(2) The taxable income must be adjusted, in accordance with rules adopted by the department, so as to include only such income and be reduced only by such deductions as can be clearly determined from the permanent records of the taxpayer to be attributable to the fractional taxable year.

PART V

DIVISION OF INCOME, MODIFICATIONS, AND CREDITS

NEW SECTION. Sec. 501. APPORTIONMENT AND ALLOCATION OF INCOME. (1) For resident individuals, all income must be apportioned and allocated to this state.

(2) For nonresident individuals, income derived from sources within this state must be apportioned and allocated to this state. For the purposes of this title:

(a) The adjusted gross income of a nonresident derived from sources within this state is the net amount of income, gain, loss, and deduction of the nonresident's federal adjusted gross income that are derived from or connected with sources in this state including any distributive share of partnership income and deductions, and share of estate or trust income and deductions, including any unrelated business income of an otherwise tax exempt trust or organization;

(b) Items of income, gain, loss, and deductions derived from or connected with sources within this state are those items attributable to the ownership or disposition of any interest in real or tangible personal property in this state, and a business, trade, profession, or occupation carried on within this state. The department shall adopt rules to provide consistency of this section with the excise tax provisions;

(c) Deduction with respect to expenses, capital losses, and net operating losses must be based solely on income, gains, losses, and deductions derived from or connected with sources in this state but must otherwise be determined in the same manner as the corresponding federal deduction except as provided in this title;

(d) Income from intangible personal property, including annuities, dividends, interest, and gains from the disposition of intangible personal property, constitutes income derived from sources within the state of Washington only to the extent the income is from property employed in a business, trade, profession, or occupation carried on within this state. However, distributed and undistributed income of electing S corporations for federal tax purposes derived from or connected with sources within this state is income derived from sources within this state for a nonresident shareholder. A net operating loss of the corporation does constitute a loss or deduction connected with sources within this state for a nonresident shareholder;

(e) Compensation paid by the United States for service in the armed forces of the United States performed in this state by a nonresident does not constitute income derived from sources within this state; and

(f) If a business, trade, profession, or occupation is carried on partly within and partly without this state, the determination of net income derived or connected with sources within this state as provided in this section, must be made by apportionment and allocation of chapter 82.56 RCW.

NEW SECTION. Sec. 502. PARTNERSHIPS, S CORPORATIONS, AND LIMITED LIABILITY COMPANIES. (1) A partnership is not subject to tax under this title. Partners are subject to tax in their separate or individual capacities. The taxable incomes of partners must be computed by including a share of the modifications under sections 402 through 407 of this act and the credits allowed under sections 302 and 303 of this act, if the modification or credit relates to the income of the partnership. A partner's share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the partner's distributive share of partnership income. The denominator of the fraction is the total partnership income. The fraction may not be greater than one.

(2) An S corporation is not subject to tax under this title. Shareholders of S corporations are subject to tax in their separate or individual capacities. The taxable income of a shareholder of S corporations must be computed by including a share of the modifications under sections 402 through 407 of this act and the credits allowed under sections 302 and 303 of this act, if the modification or credit relates to the income of the S corporation. A shareholder's share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the shareholder's pro rata share of S corporation income. The denominator of the fraction is the total S corporation income. The fraction may not be greater than one.

(3) A limited liability company is not subject to tax under this title. Members of a limited liability company are subject to tax in their separate or individual capacities. The taxable incomes of a member of a limited liability company must be computed by including a share of the modifications under sections 402 through 407 of this act and the credits allowed under sections 302 and 303 of this act, if the modification or credit relates to the income of the limited liability company. A member's share of a modification or credit is the amount of modification or credit multiplied by a fraction. The numerator of the fraction is the member's distributive share of limited liability company. The denominator of the fraction is the total limited liability company income. The fraction may not be greater than one.

(4) As used in this section:

(a) "Pro rata share" means pro rata share as determined under section 1366(a) of the internal revenue code;

(b) "S corporation income" includes both distributed and undistributed federal taxable income of the S corporation; and

PART VI

INCOME TAX‑-WITHHOLDING‑-ESTIMATED TAX

NEW SECTION. Sec. 601. EMPLOYER WITHHOLDING‑-REQUIREMENTS. (1) An employer making a payment of wages or salaries earned in this state, regardless of the place where the payment is made, and who is required by the internal revenue code to withhold taxes, shall deduct and withhold a tax as prescribed by rules adopted by the department. The rules must reasonably reflect the annual tax liability of the employee under this title. An employer making the deduction and withholding shall furnish to the employee a record of the amount of tax deducted and withheld from the employee on forms provided by the department.

(2) If the employee is a resident of this state and earns income from personal services entirely performed in another state that imposes an income tax on the income, and the employer withholds income taxes under the laws of the state in which the income is earned, the employer is not required to withhold tax imposed by this title on the income if the laws of the state in which the income is earned allow a similar exemption for its residents who earn income in this state.

NEW SECTION. Sec. 602. LIABILITY OF EMPLOYER FOR TAX WITHHELD. A person required to deduct and withhold the tax imposed by this title is liable for the payment of the amount deducted and withheld to the department, and is not liable to any other person for the amount of tax deducted and withheld under this title. The amount of tax so deducted and withheld must be held to be a special fund in trust for this state.

NEW SECTION. Sec. 603. WITHHOLDING BY GOVERNMENTAL ENTITY. If the employer is the United States, a foreign country, or this state or any political subdivision thereof, or an agency or instrumentality of any combination of the United States, a foreign country, or this state or any political subdivision thereof, then the return of the amount deducted and withheld upon wages or salaries may be made by an officer of the employer having control of the payment of the wages and salaries or appropriately designated for that purpose.

NEW SECTION. Sec. 604. CREDIT FOR TAX WITHHELD‑-HOW CLAIMED. The amount deducted and withheld as tax under sections 601 through 603 of this act during any taxable year is allowed as a credit against the tax imposed for the taxable year by this title. If the tax liability of an individual for taxes, interest, penalties, or other amounts due the state of Washington is less than the total amount of the credit that the individual is entitled under this section, the individual is entitled to a refund in the amount of the excess of the credit over the tax otherwise due. If an individual entitled to claim a credit under this section is not otherwise required by this title to file a return, a refund may be obtained in the amount of the credit by filing a return, with applicable sections completed, to claim the refund. A credit or refund is not allowed under this section unless the credit or refund is claimed on a return filed for the taxable year for which the amount was deducted and withheld.

NEW SECTION. Sec. 605. WITHHOLDING‑-FAILURE TO PAY OR COLLECT‑-PENALTIES. (1) The tax required to be collected under this chapter by the employer is deemed to be held in trust by the employer until paid to the department.

(2) If an employer, or responsible person within the meaning of section 6672 of the internal revenue code, fails to collect the tax imposed under this chapter or, having collected the tax, fails to pay it to the department, the employer or responsible person is nevertheless personally liable to the state for the amount of the tax. The interest and penalty provisions of chapter 82.32 RCW apply to this section.

NEW SECTION. Sec. 606. ESTIMATED TAX IMPOSED‑-DUE DATE OF ESTIMATED TAXES‑-AMOUNT OF ESTIMATED TAX‑-UNDERPAYMENT PENALTY. (1)

An individual subject to taxation under this title who is required by the internal revenue code to make payment of estimated taxes shall pay to the department on forms prescribed by the department the estimated taxes due under this title.

(2) The provisions of the internal revenue code relating to the determination of reporting periods and due dates of payments of estimated tax apply to the estimated tax payments due under this section.

(3) The amount of the estimated tax is the annualized tax divided by the number of months in the reporting period. An estimated tax is not due if the annualized tax is less than five hundred dollars. RCW 82.32.050 and 82.32.090 apply to underpayments of estimated tax, but do not apply to underpayments, as defined by the internal revenue code, if the tax remitted to the department is either ninety percent of the tax shown on the return or one hundred percent of the tax shown on the previous year's tax return.

(4) For the purposes of this section, "annualized tax" is the taxpayer's projected tax liability for the tax year as computed under section 6654 of the internal revenue code and the regulations thereunder.

PART VII

CRIMES

NEW SECTION. Sec. 701. CRIMES. (1) A person who knowingly attempts to evade or defeat the tax imposed under this title or payment of the tax is guilty of a class C felony as provided in chapter 9A.20 RCW.

(2) A person required to collect tax imposed under this title who knowingly fails to collect, truthfully account for, or pay over the tax is guilty of a class C felony as provided in chapter 9A.20 RCW.

(3) A person who knowingly fails to pay tax, pay estimated tax, make returns, keep records, or supply information, as required under this title, is guilty of a gross misdemeanor as provided in chapter 9A.20 RCW.

PART VIII

ADMINISTRATIVE PROVISIONS

NEW SECTION. Sec. 801. METHOD OF ACCOUNTING. (1) A taxpayer's method of accounting for purposes of the tax imposed under this title must be the same as the taxpayer's method of accounting for federal income tax purposes. If a method of accounting has not been regularly used by a taxpayer for federal income tax purposes, tax due under this title must be computed by a method of accounting that in the opinion of the department fairly reflects income.

(2) If a person's method of accounting is changed for federal income tax purposes, it must be similarly changed for purposes of this title.

NEW SECTION. Sec. 802. PERSONS REQUIRED TO FILE RETURNS. (1) A taxpayer shall file with the department, on forms prescribed by the department, an income tax return for each tax year. A person required to file a return under this title shall, without assessment, notice, or demand, pay tax due under this title, to the department on or before the date fixed for filing the return.

(2) The department may adopt rules that require that certain taxpayers file, on forms prescribed by the department, informational returns for any period. A person required by rule to file an informational return shall, without assessment, notice, or demand, pay any tax due under this title, to the department on or before the date fixed for filing of the informational return.

(3) In the event an adjustment to a taxpayer's federal return is made by the taxpayer or the federal internal revenue service, the taxpayer shall, within ninety days of the final determination of the adjustment by the federal internal revenue service or within thirty days of the filing of a federal return adjusted by the taxpayer, file a corrected return reflecting the adjustments as finally determined or returned. The taxpayer shall pay additional tax resulting from the finally determined internal revenue service adjustment or a taxpayer adjustment without notice and assessment. Notwithstanding any provision of this title or any other title to the contrary, the period of limitations for the correction of an additional tax, interest, and penalty due as a result of an adjustment by a taxpayer or a finally determined internal revenue service adjustment begins at the later of thirty days following the final determination of the adjustment or the date of the filing of the corrected return.

NEW SECTION. Sec. 803. DUE DATE FOR FILING A RETURN‑-EXTENSIONS‑-INTEREST AND PENALTIES. The due date of a return required to be filed with the department is the due date of the federal income tax return or informational return for federal income tax purposes. The department may grant extensions of times by which a return required to be filed by this title may be submitted. The department may also grant extensions of time to pay tax with regard to taxes imposed by this title. Interest at the rate specified in RCW 82.32.050 accrues during an extension period and the interest and penalty provisions of chapter 82.32 RCW apply to late payments and deficiencies. Notwithstanding the limitation of RCW 82.32.090, for a late filing of an informational return, there must be imposed a penalty the amount of which shall be established in rules adopted by the department. The penalty may not exceed fifty dollars per month for a maximum of ten months. RCW 82.32.105 applies to this section.

NEW SECTION. Sec. 804. JOINT RETURN. (1) If the federal income tax liabilities of both spouses are determined on a joint federal return for the taxable year, the spouses shall file a joint return under this title unless one spouse is a resident and the other is a nonresident.

(2) If neither spouse is required to file a federal income tax return for the taxable year, the spouses may file a joint return under this title under the same conditions under which a joint return may be filed for purposes of the federal income tax.

(3) If the federal income tax liability of either spouse is determined on a separate federal return for the taxable year, the spouses shall file separate returns under this title.

(4) If one spouse is a resident and the other is a nonresident, the spouses shall file separate returns under this title, unless they elect to determine their tax liabilities under this title on a joint return as if they were both residents and:

(a) Their federal tax liability for the taxable year was determined on a joint federal return; or

(b) Neither spouse has filed a federal income tax return for the taxable year and they would be permitted to file a joint federal return for the taxable year.

(5) If a joint return is filed under this section, the liability of the husband and wife is joint and several, unless the spouse is relieved of liability under section 6013 of the internal revenue code.

NEW SECTION. Sec. 805. RECORDS‑-RETURNS. (1) Every taxpayer, and every person, required to deduct and withhold the tax imposed under this title shall keep records, render statements, make returns, file reports, and perform other acts, as the department requires by rule. A return must be made under penalty of perjury and on forms prescribed by the department. The department may require that other statements and reports be made under penalty of perjury and on forms prescribed by the department. The department may require a taxpayer, and a person, required to deduct and withhold the tax imposed under this title to furnish to the department a correct copy of any return or document that the taxpayer or person has filed with the internal revenue service or received from the internal revenue service.

(2) All books and records and other papers and documents required to be kept under this title are subject to inspection by the department at all times during business hours of the day.

NEW SECTION. Sec. 806. ESTIMATION AGREEMENTS. The department may reasonably estimate the items of business or nonbusiness income of a taxpayer having an office within the state and one or more other states or foreign countries that may be apportioned or allocated to the state and may enter into an estimation agreement with a taxpayer for the determination of the taxpayer's liability for the tax imposed by this title.

NEW SECTION. Sec. 807. PROVISIONS OF INTERNAL REVENUE CODE CONTROL. (1) To the extent possible without being inconsistent with this title, all of the internal revenue code that relates to the following subjects apply to the taxes imposed under this title:

(a) Time and manner of payment of tax imposed under this title, including tax withheld under sections 601 through 603 of this act;

(b) Liability of transferees; and

(c) Time and manner of making returns, extensions of time for filing returns, verification of returns, and the time when a return is deemed filed.

(2) The department, by rule, may provide modifications and exceptions to subsection (1) of this section if reasonably necessary to facilitate the prompt, efficient, and equitable collection of tax under this title.

NEW SECTION. Sec. 808. REFUNDS OF OVERPAYMENTS‑-OTHER ADMINISTRATIVE PROVISIONS. (1) The department shall refund all taxes improperly paid or collected.

(2) RCW 82.32.020, 82.32.050, 82.32.060, 82.32.070, 82.32.090, 82.32.100, 82.32.105, 82.32.110, 82.32.120, 82.32.130, 82.32.140, 82.32.150, 82.32.160, 82.32.170, 82.32.180, 82.32.190, 82.32.200, 82.32.210, 82.32.220, 82.32.230, 82.32.235, 82.32.237, 82.32.240, 82.32.245, 82.32.265, 82.32.300, 82.32.310, 82.32.320, 82.32.330, 82.32.340, 82.32.350, and 82.32.360 apply to the administrative of taxes imposed under this title.

NEW SECTION. Sec. 809. RULES. The department may adopt rules under chapter 34.05 RCW for the administration and enforcement of this title. The rules, to the extent possible without being inconsistent with this title, must follow the internal revenue code, and the regulations and rulings of the United States treasury department with respect to the federal income tax. The department may adopt as a part of these rules portions of the internal revenue code and treasury department regulations and rulings, in whole or in part.

PART IX

APPEALS

Sec. 901. RCW 82.03.130 and 1998 c 54 s 1 are each amended to read as follows:

(1) The board shall have jurisdiction to decide the following types of appeals:

(a) Appeals taken pursuant to RCW 82.03.190.

(b) Appeals from a county board of equalization pursuant to RCW 84.08.130.

(c) Appeals by an assessor or landowner from an order of the director of revenue made pursuant to RCW 84.08.010 and 84.08.060, if filed with the board of tax appeals within thirty days after the mailing of the order, the right to such an appeal being hereby established.

(d) Appeals by an assessor or owner of an intercounty public utility or private car company from determinations by the director of revenue of equalized assessed valuation of property and the apportionment thereof to a county made pursuant to chapter 84.12 and 84.16 RCW, if filed with the board of tax appeals within thirty days after mailing of the determination, the right to such appeal being hereby established.

(e) Appeals by an assessor, landowner, or owner of an intercounty public utility or private car company from a determination of any county indicated ratio for such county compiled by the department of revenue pursuant to RCW 84.48.075: PROVIDED, That

(i) Said appeal be filed after review of the ratio under RCW 84.48.075(3) and not later than fifteen days after the mailing of the certification; and

(ii) The hearing before the board shall be expeditiously held in accordance with rules prescribed by the board and shall take precedence over all matters of the same character.

(f) Appeals from the decisions of sale price of second class shorelands on navigable lakes by the department of natural resources pursuant to RCW 79.94.210.

(g) Appeals from urban redevelopment property tax apportionment district proposals established by governmental ordinances pursuant to RCW 39.88.060.

(h) Appeals from interest rates as determined by the department of revenue for use in valuing farmland under current use assessment pursuant to RCW 84.34.065.

(i) Appeals from revisions to stumpage value tables used to determine value by the department of revenue pursuant to RCW 84.33.091.

(j) Appeals from denial of tax exemption application by the department of revenue pursuant to RCW 84.36.850.

(k) Appeals pursuant to RCW 84.40.038(3).

(l) Appeals relating to income tax deficiencies and refunds including penalties and interest under Title 82A RCW (sections 101 through 809 of this act).

(2) Except as otherwise specifically provided by law hereafter, the provisions of RCW 1.12.070 shall apply to all notices of appeal filed with the board of tax appeals.

Sec. 902. RCW 82.03.140 and 2000 c 103 s 1 are each amended to read as follows:

In all appeals over which the board has jurisdiction under RCW 82.03.130, a party taking an appeal may elect either a formal or an informal hearing, such election to be made according to rules of practice and procedure to be promulgated by the board: PROVIDED, That nothing shall prevent the assessor or taxpayer, as a party to an appeal pursuant to RCW 84.08.130, within twenty days from the date of the receipt of the notice of appeal, from filing with the clerk of the board notice of intention that the hearing be a formal one: PROVIDED, HOWEVER, That nothing herein shall be construed to modify the provisions of RCW 82.03.190: AND PROVIDED FURTHER, That upon an appeal under RCW 82.03.130(1)(e), the director of revenue may, within ten days from the date of its receipt of the notice of appeal, file with the clerk of the board notice of its ((~~intention that the hearing be held pursuant to chapter 34.05 RCW~~)) election of a formal hearing. In the event that appeals are taken from the same decision, order, or determination, as the case may be, by different parties and only one of such parties elects a formal hearing, a formal hearing shall be granted.

PART X

BUSINESS AND OCCUPATION TAX

Sec. 1001. RCW 48.14.080 and 1998 c 312 s 1 are each amended to read as follows:

As to insurers, other than title insurers and taxpayers under RCW 48.14.0201, the taxes imposed by this title shall be in lieu of all other taxes, except taxes on real and tangible personal property, excise taxes on the sale, purchase, or use of such property((~~, and the tax imposed in RCW 82.04.260(12)~~)).

Sec. 1002. RCW 82.04.4328 and 1985 c 471 s 7 are each amended to read as follows:

(1) For the purposes of RCW ((~~82.04.4322, 82.04.4324, 82.04.4326, 82.04.4327,~~)) 82.08.031((,)) and 82.12.031, the term "artistic or cultural organization" means an organization which is organized and operated exclusively for the purpose of providing artistic or cultural exhibitions, presentations, or performances or cultural or art education programs, as defined in subsection (2) of this section, for viewing or attendance by the general public. The organization must be a not-for-profit corporation under chapter 24.03 RCW and managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or by a corporation sole under chapter 24.12 RCW. In addition, to qualify for deduction or exemption from taxation under RCW ((~~82.04.4322, 82.04.4324, 82.04.4326, 82.04.4327,~~)) 82.08.031((,)) and 82.12.031, the corporation shall satisfy the following conditions:

(a) No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;

(b) Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the state;

(c) Assets of the corporation must be irrevocably dedicated to the activities for which the exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation which also would be entitled to the exemption;

(d) The corporation must be duly licensed or certified when licensing or certification is required by law or regulation;

(e) The amounts received that qualify for exemption must be used for the activities for which the exemption is granted;

(f) Services must be available regardless of race, color, national origin, or ancestry; and

(g) The director of revenue shall have access to its books in order to determine whether the corporation is exempt from taxes.

(2) The term "artistic or cultural exhibitions, presentations, or performances or cultural or art education programs" includes and is limited to:

(a) An exhibition or presentation of works of art or objects of cultural or historical significance, such as those commonly displayed in art or history museums;

(b) A musical or dramatic performance or series of performances; or

(c) An educational seminar or program, or series of such programs, offered by the organization to the general public on an artistic, cultural, or historical subject.

Sec. 1003. RCW 82.04.260 and 2001 2nd sp.s. c 25 s 2 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of manufacturing:

(a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola byproducts, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, oil, canola meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;

(b) Seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of 0.138 percent;

(c) By canning, preserving, freezing, processing, or dehydrating fresh fruits and vegetables, or selling at wholesale fresh fruits and vegetables canned, preserved, frozen, processed, or dehydrated by the seller and sold to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business shall be equal to the value of the products canned, preserved, frozen, processed, or dehydrated multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record; and

(d) Dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including byproducts from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed shall be equal to the value of the products manufactured multiplied by the rate of 0.138 percent. As proof of sale to a person who transports in the ordinary course of business goods out of this state, the seller shall annually provide a statement in a form prescribed by the department and retain the statement as a business record.

(2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.

(3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.

(4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.

(5) Upon every person engaging within this state in the business of making sales, at retail or wholesale, of nuclear fuel assemblies manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the assemblies multiplied by the rate of 0.275 percent.

(6) Upon every person engaging within this state in the business of manufacturing nuclear fuel assemblies, as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured multiplied by the rate of 0.275 percent.

(7) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(8) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.

(9) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. ((~~Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection.~~)) Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

(10) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.

((If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.))

(11) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of 0.484 percent.

(((12) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities shall be equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter. The moneys collected under this subsection shall be deposited in the health services account created under RCW 43.72.900.))

Sec. 1004. RCW 82.04.4289 and 1998 c 325 s 1 are each amended to read as follows:

This chapter does not apply to amounts derived as compensation for services rendered to patients or from sales of prescription drugs as defined in RCW 82.08.0281 furnished as an integral part of services rendered to patients by a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation, a kidney dialysis facility operated as a nonprofit corporation, whether or not operated in connection with a hospital, a nonprofit hospice agency licensed under chapter 70.127 RCW, and nursing homes and homes for unwed mothers operated as religious or charitable organizations, but only if no part of the net earnings received by such an institution inures directly or indirectly, to any person other than the institution entitled to deduction ((~~hereunder~~)) under this section. The deduction is not allowed unless the hospital building is entitled to exemption from taxation under the property tax laws of this state.

NEW SECTION. Sec. 1005. A new section is added to chapter 82.04 RCW to read as follows:

This chapter does not apply to amounts derived as compensation for services rendered or to be rendered to patients or from sales of prescription drugs as defined in RCW 82.08.0281 furnished as an integral part of services rendered to patients by a hospital, as defined in chapter 70.41 RCW, devoted to the care of human beings with respect to the prevention or treatment of disease, sickness, or suffering, when such hospital is operated by the United States or any of its instrumentalities, or by the state, or any of its political subdivisions.

PART XI

TAX ON SPIRITS

Sec. 1101. RCW 82.08.150 and 1998 c 126 s 16 are each amended to read as follows:

(1) There is levied and shall be collected a tax upon each retail sale of spirits, or strong beer in the original package at the rate of fifteen percent of the selling price. The tax imposed in this subsection shall apply to all such sales including sales by the Washington state liquor stores and agencies, but excluding sales to spirits, beer, and wine restaurant licensees.

(2) There is levied and shall be collected a tax upon each sale of spirits, or strong beer in the original package at the rate of ten percent of the selling price on sales by Washington state liquor stores and agencies to spirits, beer, and wine restaurant licensees.

(3) There is levied and shall be collected an additional tax upon each retail sale of spirits in the original package at the rate of one dollar and seventy-two cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees.

(4) An additional tax is imposed equal to fourteen percent multiplied by the taxes payable under subsections (1), (2), and (3) of this section.

(5) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of seven cents per liter. The additional tax imposed in this subsection shall apply to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(6)(((a) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and seven-tenths percent of the selling price through June 30, 1995, two and six-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and three and four-tenths of the selling price thereafter. This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, but excluding sales to spirits, beer, and wine restaurant licensees.

(b) An additional tax is imposed upon retail sale of spirits in the original package at the rate of one and one-tenth percent of the selling price through June 30, 1995, one and seven-tenths percent of the selling price for the period July 1, 1995, through June 30, 1997, and two and three-tenths of the selling price thereafter. This additional tax applies to all such sales to spirits, beer, and wine restaurant licensees.

(c) An additional tax is imposed upon each retail sale of spirits in the original package at the rate of twenty cents per liter through June 30, 1995, thirty cents per liter for the period July 1, 1995, through June 30, 1997, and forty-one cents per liter thereafter. This additional tax applies to all such sales including sales by Washington state liquor stores and agencies, and including sales to spirits, beer, and wine restaurant licensees.

(d) All revenues collected during any month from additional taxes under this subsection shall be deposited in the health services account created under RCW 43.72.900 by the twenty-fifth day of the following month.

~~(7)~~)) The tax imposed in RCW 82.08.020 shall not apply to sales of spirits or strong beer in the original package.

((~~(8)~~)) (7) The taxes imposed in this section shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the tax payable in respect to each taxable sale under this section. The taxes required by this section to be collected by the seller shall be stated separately from the selling price and for purposes of determining the tax due from the buyer to the seller, it shall be conclusively presumed that the selling price quoted in any price list does not include the taxes imposed by this section.

((~~(9)~~)) (8) As used in this section, the terms, "spirits," "strong beer," and "package" shall have the meaning ascribed to them in chapter 66.04 RCW.

PART XII

TAX ON BEER

Sec. 1201. RCW 66.24.290 and 1999 c 281 s 14 are each amended to read as follows:

(1) Any microbrewer or domestic brewery or beer distributor licensed under this title may sell and deliver beer to holders of authorized licenses direct, but to no other person, other than the board; and every such brewery or beer distributor shall report all sales to the board monthly, pursuant to the regulations, and shall pay to the board as an added tax for the privilege of manufacturing and selling the beer within the state a tax of one dollar and thirty cents per barrel of thirty-one gallons on sales to licensees within the state and on sales to licensees within the state of bottled and canned beer shall pay a tax computed in gallons at the rate of one dollar and thirty cents per barrel of thirty-one gallons. Any brewery or beer distributor whose applicable tax payment is not postmarked by the twentieth day following the month of sale will be assessed a penalty at the rate of two percent per month or fraction thereof. Beer shall be sold by breweries and distributors in sealed barrels or packages. The moneys collected under this subsection shall be distributed as follows: (a) Three-tenths of a percent shall be distributed to border areas under RCW 66.08.195; and (b) of the remaining moneys: (i) Twenty percent shall be distributed to counties in the same manner as under RCW 66.08.200; and (ii) eighty percent shall be distributed to incorporated cities and towns in the same manner as under RCW 66.08.210.

(2) An additional tax is imposed on all beer subject to tax under subsection (1) of this section. The additional tax is equal to two dollars per barrel of thirty-one gallons. All revenues collected during any month from this additional tax shall be deposited in the violence reduction and drug enforcement account under RCW 69.50.520 by the twenty-fifth day of the following month.

(3)(((a) An additional tax is imposed on all beer subject to tax under subsection (1) of this section. The additional tax is equal to ninety-six cents per barrel of thirty-one gallons through June 30, 1995, two dollars and thirty-nine cents per barrel of thirty-one gallons for the period July 1, 1995, through June 30, 1997, and four dollars and seventy-eight cents per barrel of thirty-one gallons thereafter.

(b) The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

~~(c) All revenues collected from the additional tax imposed under this subsection (3) shall be deposited in the health services account under RCW 43.72.900.~~

~~(4)~~)) An additional tax is imposed on all beer that is subject to tax under subsection (1) of this section that is in the first sixty thousand barrels of beer by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of ((~~the~~)) this exemption ((~~under subsection (3)(b) of this section~~)). The additional tax is equal to one dollar and forty-eight and two-tenths cents per barrel of thirty-one gallons. By the twenty-fifth day of the following month, three percent of the revenues collected from this additional tax shall be distributed to border areas under RCW 66.08.195 and the remaining moneys shall be transferred to the state general fund.

((~~(5)~~)) (4) The board may make refunds for all taxes paid on beer exported from the state for use outside the state.

((~~(6)~~)) (5) The board may require filing with the board of a bond to be approved by it, in such amount as the board may fix, securing the payment of the tax. If any licensee fails to pay the tax when due, the board may forthwith suspend or cancel his or her license until all taxes are paid.

((~~(7)~~)) (6) The tax imposed under this section shall not apply to "strong beer" as defined in this title.

PART XIII

BUSINESS AND OCCUPATION AND PUBLIC UTILITY TAXES REPEALED

NEW SECTION. Sec. 1301. The following acts or parts of acts are each repealed:

(1) RCW 48.14.0201 (Premiums and prepayments tax--Health care services--State preemption) and 1998 c 323 s 1, 1997 c 154 s 1, 1993 sp.s. c 25 s 601, & 1993 c 492 s 301;

(2) RCW 82.04.220 (Business and occupation tax imposed) and 1961 c 15 s 82.04.220;

(3) RCW 82.04.230 (Tax upon extractors) and 1993 sp.s. c 25 s 101, 1971 ex.s. c 281 s 2, 1969 ex.s. c 262 s 33, 1967 ex.s. c 149 s 7, & 1961 c 15 s 82.04.230;

(4) RCW 82.04.240 (Tax on manufacturers) and 1998 c 312 s 3, 1993 sp.s. c 25 s 102, 1981 c 172 s 1, 1979 ex.s. c 196 s 1, 1971 ex.s. c 281 s 3, 1969 ex.s. c 262 s 34, 1967 ex.s. c 149 s 8, 1965 ex.s. c 173 s 5, & 1961 c 15 s 82.04.240;

(5) RCW 82.04.2403 (Manufacturer tax not applicable to cleaning fish) and 1994 c 167 s 1;

(6) RCW 82.04.250 (Tax on retailers) and 1998 c 343 s 5, 1998 c 312 s 4, 1993 sp.s. c 25 s 103, 1981 c 172 s 2, 1971 ex.s. c 281 s 4, 1971 ex.s. c 186 s 2, 1969 ex.s. c 262 s 35, 1967 ex.s. c 149 s 9, & 1961 c 15 s 82.04.250;

(7) RCW 82.04.255 (Tax on real estate brokers) and 1997 c 7 s 1, 1996 c 1 s 1, 1993 sp.s. c 25 s 202, 1985 c 32 s 2, 1983 2nd ex.s. c 3 s 1, 1983 c 9 s 1, & 1970 ex.s. c 65 s 3;

(8) RCW 82.04.270 (Tax on wholesalers) and 2001 1st sp.s. c 9 s 3 & 1999 c 358 s 2;

(9) RCW 82.04.280 (Tax on printers, publishers, highway contractors, extracting or processing for hire, cold storage warehouse or storage warehouse operation, insurance general agents, radio and television broadcasting, government contractors--Cold storage warehouse defined--Storage warehouse defined--Periodical or magazine defined) and 1998 c 343 s 3, 1994 c 112 s 1, 1993 sp.s. c 25 s 303, 1993 sp.s. c 25 s 106, 1986 c 226 s 2, 1983 c 132 s 1, 1975 1st ex.s. c 90 s 3, 1971 ex.s. c 299 s 5, 1971 ex.s. c 281 s 7, & 1970 ex.s. c 8 s 2;

(10) RCW 82.04.290 (Tax on international investment management services or other business or service activities.) and 2001 1st sp.s. c 9 s 5;

(11) RCW 82.04.290 (Tax on international investment management services or other business or service activities.) and 2001 1st sp.s. c 9 s 6;

(12) RCW 82.04.293 (International investment management services--Definitions) and 1997 c 7 s 3 & 1995 c 229 s 1;

(13) RCW 82.04.297 (Internet services--Definitions) and 2000 c 103 s 5 & 1997 c 304 s 4;

(14) RCW 82.04.310 (Exemptions--Public utilities--Electrical energy) and 2000 c 245 s 2, 1989 c 302 s 202, & 1961 c 15 s 82.04.310;

(15) RCW 82.04.312 (Exemptions--Water services supplied by small water-sewer districts, irrigation districts, or systems--Rate averaging by department of health.) and 1998 c 316 s 1 & 1997 c 407 s 2;

(16) RCW 82.04.315 (Exemptions--International banking facilities) and 1982 c 95 s 7;

(17) RCW 82.04.317 (Exemptions--Motor vehicle sales by manufacturers at wholesale auctions to dealers) and 1997 c 4 s 1;

(18) RCW 82.04.320 (Exemptions--Insurance business) and 1961 c 15 s 82.04.320;

(19) RCW 82.04.322 (Exemptions--Health maintenance organization, health care service contractor, certified health plan) and 1993 c 492 s 303;

(20) RCW 82.04.324 (Exemptions--Blood, bone, or tissue bank--Exceptions) and 1995 2nd sp.s. c 9 s 3;

(21) RCW 82.04.327 (Exemptions--Adult family homes) and 1987 1st ex.s. c 4 s 1;

(22) RCW 82.04.330 (Exemptions--Sales of agricultural products) and 2001 c 118 s 3, 1993 sp.s. c 25 s 305, 1988 c 253 s 2, & 1987 c 23 s 4;

(23) RCW 82.04.333 (Exemptions--Small harvesters) and 1990 c 141 s 1;

(24) RCW 82.04.335 (Exemptions--Agricultural fairs) and 1965 ex.s. c 145 s 1;

(25) RCW 82.04.337 (Exemptions--Amounts received by hop growers or dealers for processed hops shipped outside the state) and 1987 c 495 s 1;

(26) RCW 82.04.339 (Exemptions--Day care provided by churches) and 1992 c 81 s 1;

(27) RCW 82.04.3395 (Exemptions--Child care resource and referral services by nonprofit organizations) and 1995 2nd sp.s. c 11 s 3;

(28) RCW 82.04.340 (Exemptions--Boxing, sparring, or wrestling matches) and 2000 c 103 s 6, 1988 c 19 s 4, & 1961 c 15 s 82.04.340;

(29) RCW 82.04.350 (Exemptions--Racing) and 1961 c 15 s 82.04.350;

(30) RCW 82.04.355 (Exemptions--Ride sharing) and 1999 c 358 s 8 & 1979 c 111 s 17;

(31) RCW 82.04.360 (Exemptions--Employees--Independent contractors‑-Booth renters) and 1991 c 324 s 19, 1991 c 275 s 2, & 1961 c 15 s 82.04.360;

(32) RCW 82.04.363 (Exemptions--Camp or conference center--Items sold or furnished by nonprofit organization) and 1997 c 388 s 1;

(33) RCW 82.04.367 (Exemptions--Nonprofit organizations that are guarantee agencies, issue debt, or provide guarantees for student loans) and 1998 c 324 s 1 & 1987 c 433 s 1;

(34) RCW 82.04.368 (Exemptions--Nonprofit organizations--Credit and debt services) and 1993 c 390 s 1;

(35) RCW 82.04.370 (Exemptions--Certain fraternal and beneficiary organizations) and 1961 c 293 s 4 & 1961 c 15 s 82.04.370;

(36) RCW 82.04.380 (Exemptions--Certain corporations furnishing aid and relief) and 1961 c 15 s 82.04.380;

(37) RCW 82.04.385 (Exemptions--Operation of sheltered workshops) and 1988 c 176 s 915, 1988 c 13 s 1, 1972 ex.s. c 134 s 1, & 1970 ex.s. c 81 s 3;

(38) RCW 82.04.390 (Exemptions--Amounts derived from sale of real estate) and 1961 c 15 s 82.04.390;

(39) RCW 82.04.392 (Exemptions--Mortgage brokers' third-party provider services trust accounts) and 1998 c 311 s 3 & 1997 c 106 s 21;

(40) RCW 82.04.395 (Exemptions--Certain materials printed in school district and educational service district printing facilities) and 1979 ex.s. c 196 s 12;

(41) RCW 82.04.397 (Exemptions--Certain materials printed in county, city, or town printing facilities) and 1979 ex.s. c 196 s 14;

(42) RCW 82.04.399 (Exemptions--Sales of academic transcripts) and 1996 c 272 s 1;

(43) RCW 82.04.405 (Exemptions--Credit unions) and 1998 c 311 s 4 & 1970 ex.s. c 101 s 3;

(44) RCW 82.04.408 (Exemptions--Housing finance commission) and 1983 c 161 s 25;

(45) RCW 82.04.410 (Exemptions--Hatching eggs and poultry) and 1967 ex.s. c 149 s 15 & 1961 c 15 s 82.04.410;

(46) RCW 82.04.415 (Exemptions--Sand, gravel and rock taken from county or city pits or quarries, processing and handling costs) and 1965 ex.s. c 173 s 10;

(47) RCW 82.04.418 (Exemptions--Grants by United States government to municipal corporations or political subdivisions) and 1983 1st ex.s. c 66 s 2;

(48) RCW 82.04.419 (Exemptions--County, city, town, school district, or fire district activity) and 1983 1st ex.s. c 66 s 3;

(49) RCW 82.04.421 (Exemptions--Out-of-state membership sales in discount programs) and 1997 c 408 s 1;

(50) RCW 82.04.423 (Exemptions--Sales by certain out-of-state persons to or through direct seller's representatives) and 1983 1st ex.s. c 66 s 5;

(51) RCW 82.04.425 (Exemptions--Accommodation sales) and 1980 c 37 s 78, 1965 ex.s. c 173 s 9, & 1961 c 15 s 82.04.425;

(52) RCW 82.04.4271 (Deductions--Membership fees and certain service fees by nonprofit youth organization) and 1981 c 74 s 1;

(53) RCW 82.04.4281 (Deductions--Investments--Dividends from subsidiary corporations) and 1980 c 37 s 2;

(54) RCW 82.04.4282 (Deductions--Fees, dues, charges) and 1994 c 124 s 3, 1989 c 392 s 1, & 1980 c 37 s 3;

(55) RCW 82.04.4283 (Deductions--Cash discount taken by purchaser) and 1980 c 37 s 4;

(56) RCW 82.04.4284 (Deductions--Credit losses of accrual basis taxpayers) and 1980 c 37 s 5;

(57) RCW 82.04.4285 (Deductions--Motor vehicle fuel and special fuel taxes) and 1998 c 176 s 3 & 1980 c 37 s 6;

(58) RCW 82.04.4286 (Deductions--Nontaxable business) and 1980 c 37 s 7;

(59) RCW 82.04.4287 (Deductions--Compensation for receiving, washing, etc., horticultural products for person exempt under RCW 82.04.330--Materials and supplies used) and 1980 c 37 s 8;

(60) RCW 82.04.4291 (Deductions--Compensation received by a political subdivision from another political subdivision for services taxable under RCW 82.04.290) and 1980 c 37 s 11;

(61) RCW 82.04.4292 (Deductions--Interest on investments or loans secured by mortgages or deeds of trust) and 1980 c 37 s 12;

(62) RCW 82.04.4293 (Deductions--Interest on obligations of the state, its political subdivisions, and municipal corporations) and 1980 c 37 s 13;

(63) RCW 82.04.4294 (Deductions--Interest on loans to farmers and ranchers, producers or harvesters of aquatic products, or their cooperatives) and 1980 c 37 s 14;

(64) RCW 82.04.4295 (Deductions--Manufacturing activities completed outside the United States) and 1980 c 37 s 15;

(65) RCW 82.04.4296 (Deductions--Reimbursement for accommodation expenditures by funeral homes) and 1980 c 37 s 16;

(66) RCW 82.04.4297 (Deductions--Compensation from public entities for health or social welfare services--Exception) and 2001 2nd sp.s. c 23 s 2, 1988 c 67 s 1, & 1980 c 37 s 17;

(67) RCW 82.04.4298 (Deductions--Repair, maintenance, replacement, etc., of residential structures and commonly held property--Eligible organizations) and 1980 c 37 s 18;

(68) RCW 82.04.431 ("Health or social welfare organization" defined for RCW 82.04.4297--Conditions for exemption--"Health or social welfare services" defined) and 1986 c 261 s 6, 1985 c 431 s 3, 1983 1st ex.s. c 66 s 1, 1980 c 37 s 80, & 1979 ex.s. c 196 s 6;

(69) RCW 82.04.432 (Deductions--Municipal sewer service fees or charges) and 1967 ex.s. c 149 s 17;

(70) RCW 82.04.4322 (Deductions--Artistic or cultural organization‑-Compensation from United States, state, etc., for artistic or cultural exhibitions, performances, or programs) and 1981 c 140 s 1;

(71) RCW 82.04.4324 (Deductions--Artistic or cultural organization‑-Deduction for tax under RCW 82.04.240--Value of articles for use in displaying art objects or presenting artistic or cultural exhibitions, performances, or programs) and 1981 c 140 s 2;

(72) RCW 82.04.4326 (Deductions--Artistic or cultural organizations--Tuition charges for attending artistic or cultural education programs) and 1981 c 140 s 3;

(73) RCW 82.04.4327 (Deductions--Artistic and cultural organizations--Income from business activities) and 1985 c 471 s 6;

(74) RCW 82.04.4329 (Deductions--Health insurance pool members--Deficit assessments) and 1987 c 431 s 24;

(75) RCW 82.04.433 (Deductions--Sales of fuel for consumption outside United States' waters by vessels in foreign commerce--Construction) and 1985 c 471 s 16;

(76) RCW 82.04.4331 (Deductions--Insurance claims for state health care coverage) and 1988 c 107 s 33;

(77) RCW 82.04.4333 (Credit--Job training services--Approval) and 1996 c 1 s 4;

(78) RCW 82.04.434 (Credit--Public safety standards and testing) and 1991 c 13 s 1;

(79) RCW 82.04.440 (Persons taxable on multiple activities--Credits) and 1998 c 312 s 9, 1994 c 124 s 4, 1987 2nd ex.s. c 3 s 2, 1985 c 190 s 1, 1981 c 172 s 5, 1967 ex.s. c 149 s 16, 1965 ex.s. c 173 s 12, & 1961 c 15 s 82.04.440;

(80) RCW 82.04.4451 (Credit against tax due--Maximum credit--Table) and 1997 c 238 s 2 & 1994 sp.s. c 2 s 1;

(81) RCW 82.04.4452 (Credit--Research and development spending--Assessment report.) and 2000 c 103 s 7, 1997 c 7 s 4, & 1994 sp.s. c 5 s 2;

(82) RCW 82.04.4453 (Credit--Ride-sharing, public transportation, or nonmotorized commuting incentives--Penalty--Report to legislature) and 1999 c 402 s 1, 1996 c 128 s 1, & 1994 c 270 s 2;

(83) RCW 82.04.4454 (Credit--Ride-sharing, public transportation, or nonmotorized commuting incentives--Ceiling) and 1999 c 402 s 3, 1996 c 128 s 2, & 1994 c 270 s 3;

(84) RCW 82.04.460 (Business within and without state--Apportionment) and 1985 c 7 s 154, 1983 2nd ex.s. c 3 s 28, 1975 1st ex.s. c 291 s 9, & 1961 c 15 s 82.04.460;

(85) RCW 82.04.480 (Sales in own name--Sales as agent) and 1975 1st ex.s. c 278 s 44 & 1961 c 15 s 82.04.480;

(86) RCW 82.04.500 (Tax part of operating overhead) and 1961 c 15 s 82.04.500;

(87) RCW 82.04.510 (General administrative provisions invoked) and 1961 c 15 s 82.04.510;

(88) RCW 82.04.600 (Exemptions--Materials printed in county, city, town, school district, educational service district, library or library district) and 1979 ex.s. c 266 s 8;

(89) RCW 82.04.900 (Construction--1961 c 15) and 1961 c 15 s 82.04.900;

(90) RCW 82.04.331 (Exemptions--Wholesale sales to farmers of seed for planting, conditioning seed for planting owned by others) and 1998 c 170 s 2;

(91) RCW 82.04.332 (Exemptions--Buying and selling at wholesale wheat, oats, dry peas, dry beans, lentils, triticale, canola, corn, rye, and barley) and 1998 c 312 s 2;

(92) RCW 82.04.3651 (Exemptions--Amounts received by nonprofit organizations for fund-raising activities) and 1999 c 358 s 3 & 1998 c 336 s 2;

(93) RCW 82.04.394 (Exemptions--Amounts received by property management company for on-site personnel) and 1998 c 338 s 2;

(94) RCW 82.04.416 (Exemptions--Operation of state route No. 16) and 1998 c 179 s 3;

(95) RCW 82.04.44525 (Credit--New employment for international service activities in eligible areas--Designation of census tracts for eligibility--Records--Tax due upon ineligibility--Interest assessment--Information from employment security department) and 1998 c 313 s 2;

(96) RCW 82.16.010 (Definitions) and 1996 c 150 s 1, 1994 c 163 s 4, 1991 c 272 s 14, & 1989 c 302 s 203;

(97) RCW 82.16.020 (Public utility tax imposed--Additional tax imposed--Deposit of moneys) and 1996 c 150 s 2, 1989 c 302 s 204, 1986 c 282 s 14, 1985 c 471 s 10, 1983 2nd ex.s. c 3 s 13, 1982 2nd ex.s. c 5 s 1, 1982 1st ex.s. c 35 s 5, 1971 ex.s. c 299 s 12, 1967 ex.s. c 149 s 24, 1965 ex.s. c 173 s 21, 1961 c 293 s 13, & 1961 c 15 s 82.16.020;

(98) RCW 82.16.030 (Taxable under each schedule if within its purview) and 1989 c 302 s 205, 1982 1st ex.s. c 35 s 6, & 1961 c 15 s 82.16.030;

(99) RCW 82.16.040 (Exemption) and 1996 c 111 s 4 & 1961 c 15 s 82.16.040;

(100) RCW 82.16.042 (Exemptions--Water services supplied by small water-sewer districts, irrigation districts, or systems.) and 1998 c 316 s 2 & 1997 c 407 s 3;

(101) RCW 82.16.047 (Exemptions--Ride sharing) and 1999 c 358 s 12 & 1979 c 111 s 18;

(102) RCW 82.16.048 (Credit--Ride-sharing, public transportation, or nonmotorized commuting incentives--Penalty--Report to legislature) and 1999 c 402 s 2, 1996 c 128 s 3, & 1994 c 270 s 4;

(103) RCW 82.16.049 (Credit--Ride-sharing, public transportation, or nonmotorized commuting incentives--Ceiling) and 1999 c 402 s 4, 1996 c 128 s 4, & 1994 c 270 s 5;

(104) RCW 82.16.050 (Deductions in computing tax) and 2000 c 245 s 1, 1994 c 124 s 12, 1989 c 302 s 103, 1987 c 207 s 1, 1982 2nd ex.s. c 9 s 3, 1977 ex.s. c 368 s 1, 1967 ex.s. c 149 s 25, 1965 ex.s. c 173 s 22, & 1961 c 15 s 82.16.050;

(105) RCW 82.16.053 (Deductions in computing tax--Light and power businesses) and 1996 c 145 s 1 & 1994 c 236 s 1;

(106) RCW 82.16.055 (Deductions relating to energy conservation or production from renewable resources) and 1980 c 149 s 3;

(107) RCW 82.16.060 (May be taxed under other chapters) and 1961 c 15 s 82.16.060;

(108) RCW 82.16.080 (Administration) and 1961 c 15 s 82.16.080;

(109) RCW 82.16.090 (Light or power and gas distribution businesses--Information required on customer billings) and 1988 c 228 s 1; and

(110) RCW 82.16.046 (Exemptions--Operation of state route No. 16) and 1998 c 179 s 5.

PART XIV

CONSTRUCTION‑-CODIFICATION‑-EFFECTIVE DATE

NEW SECTION. Sec. 1401. SAVINGS. This act does not terminate, or in any way modify, any obligation or any liability, civil or criminal, that was already in existence on the effective date of this section.

NEW SECTION. Sec. 1402. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 1403. CODIFICATION. (1) Sections 101 through 809 of this act constitute a new title in the Revised Code of Washington, to be codified as Title 82A RCW.

(2) Section 101 of this act constitutes a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(3) Sections 201 through 213 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(4) Sections 301 through 303 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(5) Sections 401 through 408 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(6) Sections 501 and 502 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(7) Sections 601 through 606 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(8) Section 701 of this act constitutes a new chapter in Title 82A RCW (sections 101 through 809 of this act).

(9) Sections 801 through 809 of this act constitute a new chapter in Title 82A RCW (sections 101 through 809 of this act).

NEW SECTION. Sec. 1404. PART HEADINGS AND CAPTIONS. Part headings and captions used in this act are not any part of the law.

NEW SECTION. Sec. 1405. EFFECTIVE DATE. This act takes effect January 1, 2003.