CERTIFICATION OF ENROLLMENT

 

              ENGROSSED SUBSTITUTE HOUSE BILL 2138

 

 

                    Chapter 25, Laws of 2001

 

 

                        57th Legislature

            2001 Second Special Legislative Session

 

 

DAIRY PRODUCTS, POULTRY FARMING--TAX EXEMPTION

 

 

 

                    EFFECTIVE DATE:  9/20/01

Passed by the House June 4, 2001

  Yeas 88   Nays 0

 

 

              FRANK CHOPP

Speaker of the House of Representatives

     

 

 

             CLYDE BALLARD

Speaker of the House of Representatives

 

 

 

Passed by the Senate June 14, 2001

  Yeas 45   Nays 2

             CERTIFICATE

 

We, Timothy A. Martin and Cynthia Zehnder, Co-Chief Clerks of the House of Representatives of the State of Washington, do hereby certify that the attached is ENGROSSED SUBSTITUTE HOUSE BILL 2138  as passed by the House of Representatives and the Senate on the dates hereon set forth.

 

 

 

          TIMOTHY A. MARTIN

                          Chief Clerk

 

 

           CYNTHIA ZEHNDER

                          Chief Clerk

               BRAD OWEN

President of the Senate

 

 

 

Approved July 13, 2001 Place Style On Codes above, and Style Off Codes below.                

                                FILED                

 

            July 13, 2001 - 3:16 p.m.

 

              GARY LOCKE

Governor of the State of Washington

                 Secretary of State

                 State of Washington


          _______________________________________________

 

               ENGROSSED SUBSTITUTE HOUSE BILL 2138

          _______________________________________________

 

           Passed Legislature - 2001 2nd Special Session

 

State of Washington      57th Legislature     2001 Regular Session

 

By House Committee on Finance (originally sponsored by Representatives G. Chandler, Linville, Mulliken, Clements, Ericksen, Hatfield, Sump, Doumit, Morell, Grant, Pearson, Schoesler, Barlean, Buck, B. Chandler, Edwards and Jackley)

 

Read first time 03/08/2001.  Referred to Committee on .

Promoting rural economic development.  


    AN ACT Relating to rural economic development; reenacting and amending RCW 82.04.260; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; and creating new sections.

 

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

 

             PART I:  Dairy Products B&O Tax Exemption

 

    NEW SECTION.  Sec. 1.  The purpose of sections 2 and 3 of this act is to provide a tax rate for persons who manufacture dairy products that is commensurate to the rate imposed on certain other processors of agricultural commodities.  This tax rate applies to persons who manufacture dairy products from raw materials such as fluid milk, dehydrated milk, or byproducts of milk such as cream, buttermilk, whey, butter, or casein.  It is not the intent of the legislature to provide this tax rate to persons who use dairy products as an ingredient or component of their manufactured product, such as milk-based soups or pizza.  It is the intent that persons who manufacture products such as milk, cheese, yogurt, ice cream, whey, or whey products be subject to this rate.

 

    Sec. 2.  RCW 82.04.260 and 1998 c 312 s 5 and 1998 c 311 s 2 are each reenacted and 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; ((and))

    (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 the effective date of this section 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.

 

      PART II:  Retail Sales Tax Exemption - Poultry Farming

 

    NEW SECTION.  Sec. 3.  A new section is added to chapter 82.08 RCW to read as follows:

    (1) The tax levied by RCW 82.08.020 does not apply to sales to farmers of propane or natural gas used to heat structures used to house chickens.  The propane or natural gas must be used exclusively to heat the structures.  The structures must be used exclusively to house chickens that are sold as agricultural products.

    (2) The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department.  The seller must retain a copy of the certificate for the seller's files.

    (3) The definitions in this subsection apply to this section and section 4 of this act.

    (a) "Structures" means barns, sheds, and other similar buildings in which chickens are housed.

    (b) "Farmer" has the same meaning as provided in RCW 82.04.213.

    (c) "Agricultural product" has the same meaning as provided in RCW 82.04.213.

 

    NEW SECTION.  Sec. 4.  A new section is added to chapter 82.12 RCW to read as follows:

    (1) The provisions of this chapter do not apply with respect to the use by a farmer of propane or natural gas to heat structures used to house chickens.  The propane or natural gas must be used exclusively to heat the structures used to house chickens.  The structures must be used exclusively to house chickens that are sold as agricultural products.

    (2) The exemption certificate, recordkeeping requirements, and definitions of section 3 of this act apply to this section.

 

    NEW SECTION.  Sec. 5.  A new section is added to chapter 82.08 RCW to read as follows:

    (1) The tax levied by RCW 82.08.020 does not apply to sales to a farmer of bedding materials used to accumulate and facilitate the removal of chicken manure.  The farmer must be raising chickens that are sold as agricultural products.

    (2) The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department.  The seller must retain a copy of the certificate for the seller's files.

    (3) The definitions in this subsection apply to this section and section 6 of this act.

    (a) "Bedding materials" means wood shavings, straw, sawdust, shredded paper, and other similar materials.

    (b) "Farmer" has the same meaning as provided in RCW 82.04.213.

    (c) "Agricultural product" has the same meaning as provided in RCW 82.04.213.

 

    NEW SECTION.  Sec. 6.  A new section is added to chapter 82.12 RCW to read as follows:

    (1) The provisions of this chapter do not apply with respect to the use by a farmer of bedding materials used to accumulate and facilitate the removal of chicken manure.  The farmer must be raising chickens that are sold as agricultural products.

    (2) The exemption certificate, recordkeeping requirements, and definitions of section 5 of this act apply to this section.

 

    NEW SECTION.  Sec. 7.  Part headings used in this act are not any part of the law.


    Passed the House June 4, 2001.

    Passed the Senate June 14, 2001.

Approved by the Governor July 13, 2001.

    Filed in Office of Secretary of State July 13, 2001.