6698 AMS BENT WILS 057

SB 6698 - S AMD 649

By Senators Benton and Zarelli

2/12/04 ADOPTED

On page 1, strike everything after the enacting clause and insert the following:

"Sec. 1. RCW 82.08.100 and 1982 1st ex.s. c 35 s 37 are each amended to read as follows:

(1) The department of revenue, by general regulation, shall provide that a taxpayer whose regular books of account are kept on a cash receipts basis may file returns based upon his cash receipts for each reporting period and pay the tax herein provided upon such basis in lieu of reporting and paying the tax on all sales made during such period.

(2) Upon a showing of substantial hardship by the taxpayer, the department shall allow a taxpayer whose regular books of account are kept on an accrual basis to file returns based upon his cash receipts for each reporting period and pay the tax herein provided upon such basis in lieu of reporting and paying the tax on all sales made during such period. "Substantial hardship" means that on the due date of a return the taxpayer's retail sales tax billed but not collected for the tax-reporting period is more than seventy-five percent of the total tax due on the return for the same tax-reporting period. Once a taxpayer whose regular books of account are kept on an accrual basis elects to report on a cash basis because of a substantial hardship, the taxpayer must continue to report on a cash basis for at least twelve months.

(3) A taxpayer filing returns on a cash receipts basis is not required to pay such tax on debts which are deductible as worthless for federal income tax purposes.

Sec. 2. RCW 82.12.070 and 1982 1st ex.s. c 35 s 38 are each amended to read as follows:

(1) The department of revenue, by general regulation, shall provide that a taxpayer whose regular books of account are kept on a cash receipts basis may file returns based upon his cash receipts for each reporting period and pay the tax herein provided upon such basis in lieu of reporting and paying the tax on all sales made during such period.

(2) Upon a showing of substantial hardship by the taxpayer, the department shall allow a taxpayer whose regular books of account are kept on an accrual basis to file returns based upon his cash receipts for each reporting period and pay the tax herein provided upon such basis in lieu of reporting and paying the tax on all sales made during such period. "Substantial hardship" means that on the due date of a return the taxpayer's retail sales tax billed but not collected for the tax-reporting period is more than seventy-five percent of the total tax due on the return for the same tax-reporting period. Once a taxpayer whose regular books of account are kept on an accrual basis elects to report on a cash basis because of a substantial hardship the taxpayer must continue to report on a cash basis for at least twelve months.

(3) A taxpayer filing returns on a cash receipts basis is not required to pay such tax on debts which are deductible as worthless for federal income tax purposes."

SB 6698 - S AMD

By Senator ....

On page 1, on line 1 of the title, after "purposes;", strike the remainder of the title and insert "and amending RCW 82.08.100 and 82.12.070."

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EFFECT: Allows an accrual basis taxpayer to use a cash basis for state excise tax purposes upon a showing of substantial hardship.