2294 AMH ORCU H3243.2

HB 2294 - H AMD 596

By Representative Orcutt

SCOPED 06/10/2003

Beginning on page 2, line 3 strike all of sections 2 through 6 and insert the following:

"Sec. 2. RCW 82.04.230 and 1993 sp.s. c 25 s 101 are each amended to read as follows:

Upon every person engaging within this state in business as an extractor; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, extracted for sale or for commercial or industrial use, multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

The measure of the tax is the value of the products, including byproducts, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 3. RCW 82.04.240 and 2003 c 149 (SB 5725) s 3 are each amended to read as follows:

(1) Upon every person engaging within this state in business as a manufacturer, except persons taxable as manufacturers under other provisions of this chapter; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, manufactured, multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

(2) Upon every person engaging within this state in the business of manufacturing semiconductor materials, as to such persons the amount of tax with respect to such business shall, in the case of manufacturers, be equal to the value of the product manufactured, or, in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of 0.275 percent until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007. For the purposes of this subsection "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips. This subsection (2) expires twelve years after July 27, 2003.

(3) The measure of the tax is the value of the products, including byproducts, so manufactured regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 4. RCW 82.04.250 and 1998 c 343 s 5 and 1998 c 312 s 4 are each reenacted and amended to read as follows:

(1) Upon every person except persons taxable under RCW 82.04.260(5), 82.04.272, or subsection (2) of this section engaging within this state in the business of making sales at retail, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent through September 30, 2005; multiplied by the rate of 0.4121 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2826 percent effective July 1, 2007.

(2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

Sec. 5. RCW 82.04.255 and 1997 c 7 s 1 are each amended to read as follows:

Upon every person engaging within the state as a real estate broker; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of 1.5 percent through September 30, 2005; multiplied by the rate of 1.3125 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.9000 percent effective July 1, 2007.

The measure of the tax on real estate commissions earned by the real estate broker shall be the gross commission earned by the particular real estate brokerage office including that portion of the commission paid to salesmen or associate brokers in the same office on a particular transaction: PROVIDED, HOWEVER, That where a real estate commission is divided between an originating brokerage office and a cooperating brokerage office on a particular transaction, each brokerage office shall pay the tax only upon their respective shares of said commission: AND PROVIDED FURTHER, That where the brokerage office has paid the tax as provided herein, salesmen or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

Sec. 6. RCW 82.04.260 and 2003 c 261 (2SHB 1240) s 11 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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007;

(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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007;

(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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007. 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;

(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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007. 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

(e) Alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007. This subsection (1)(e) expires July 1, 2009.

(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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007.

(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 through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

(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 through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007.

(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 until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007.

(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 until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007.

(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 until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007.

(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 until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007.

(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 until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007. 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 through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

(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 through September 30, 2005; multiplied by the rate of 1.3125 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.9000 percent effective July 1, 2007. The moneys collected under this subsection shall be deposited in the health services account created under RCW 43.72.900.

Sec. 7. RCW 82.04.260 and 2003 c 339 (EHB 2146) s 11 are each amended to read as follows:

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

(e) Alcohol fuel or wood biomass fuel, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business shall be equal to the value of alcohol fuel or wood biomass fuel manufactured, multiplied by the rate of 0.138 percent through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007.

Sec. 8. RCW 82.04.263 and 1996 c 112 s 3 are each amended to read as follows:

Upon every person engaging within this state in the business of cleaning up for the United States, or its instrumentalities, radioactive waste and other byproducts of weapons production and nuclear research and development; as to such persons the amount of the tax with respect to such business shall be equal to the value of the gross income of the business multiplied by the rate of 0.471 percent through September 30, 2005; multiplied by the rate of 0.4121 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2826 percent effective July 1, 2007.

For the purposes of this chapter, "cleaning up radioactive waste and other byproducts of weapons production and nuclear research and development" means the activities of handling, storing, treating, immobilizing, stabilizing, or disposing of radioactive waste, radioactive tank waste and capsules, nonradioactive hazardous solid and liquid wastes, or spent nuclear fuel; spent nuclear fuel conditioning; removal of contamination in soils and ground water; decontamination and decommissioning of facilities; and activities integral and necessary to the direct performance of cleanup.

Sec. 9. RCW 82.04.270 and 2001 1st sp.s. c 9 s 3 are each amended to read as follows:

Upon every person except persons taxable under RCW 82.04.260(5), 82.04.298, or 82.04.272 engaging within this state in the business of making sales at wholesale; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of such business multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

Sec. 10. RCW 82.04.272 and 1998 c 343 s 1 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of warehousing and reselling prescription drugs; as to such persons, the amount of the tax shall be equal to the gross income of the business multiplied by the rate of 0.138 percent through September 30, 2005; multiplied by the rate of 0.1208 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.0828 percent effective July 1, 2007.

(2) For the purposes of this section:

(a) "Prescription drug" has the same meaning as that term is given in RCW 82.08.0281; and

(b) "Warehousing and reselling prescription drugs" means the buying of prescription drugs from a manufacturer or another wholesaler, and reselling of the drugs to persons selling at retail or to hospitals, clinics, health care providers, or other providers of health care services, by a wholesaler or retailer who is registered with the federal drug enforcement administration and licensed by the state board of pharmacy.

Sec. 11. RCW 82.04.280 and 1998 c 343 s 3 are each amended to read as follows:

Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines; (2) building, repairing or improving any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of RCW 48.05.310; (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.

As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.

As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.

Sec. 12. RCW 82.04.290 and 2001 1st sp.s. c 9 s 6 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of providing international investment management services, as to such persons, the amount of tax with respect to such business shall be equal to the gross income or gross proceeds of sales of the business multiplied by a rate of 0.275 percent until October 1, 2005; multiplied by the rate of 0.2406 percent effective October 1, 2005, until July 1, 2007; and multiplied by the rate of 0.1650 percent effective July 1, 2007.

(2) Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, 82.04.298, 82.04.2905, 82.04.280, 82.04.2907, and 82.04.272, and subsection (1) of this section; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of 1.5 percent through September 30, 2005; multiplied by the rate of 1.3125 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.9000 percent effective July 1, 2007.

This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.

Sec. 13. RCW 82.04.2905 and 1998 c 312 s 7 are each amended to read as follows:

Upon every person engaging within this state in the business of providing child care for periods of less than twenty-four hours; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such sales multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

Sec. 14. RCW 82.04.2907 and 2001 c 320 s 3 are each amended to read as follows:

Upon every person engaging within this state in the business of receiving income from royalties or charges in the nature of royalties for the granting of intangible rights, such as copyrights, licenses, patents, or franchise fees, the amount of tax with respect to such business shall be equal to the gross income from royalties or charges in the nature of royalties from the business multiplied by the rate of 0.484 percent through September 30, 2005; multiplied by the rate of 0.4235 percent effective October 1, 2005, through June 30, 2007; and multiplied by the rate of 0.2904 percent effective July 1, 2007.

"Royalties" means compensation for the use of intangible property, such as copyrights, patents, licenses, franchises, trademarks, trade names, and similar items. It does not include compensation for any natural resource or licensing of canned software to the end user."

Renumber the remaining sections consecutively, correct internal references accordingly, and correct the title.

HB 2294 - H AMD 596

By Representative Orcutt

SCOPED 06/10/2003

On page 20, line 14, after "person" strike all material through "or"

On page 20, line 23, after "of a" strike all material through "or"

On page 20, beginning on line 25, after "a" strike all material through "or" on line 26

HB 2294 - H AMD 596

By Representative Orcutt

SCOPED 06/10/2003

On page 21, beginning on line 33, strike all material through "department." on line 37

EFFECT: Provides B&O rate reductions for all B&O taxpayers, not just the aerospace industry.

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