BILL REQ. #:  H-0977.1 

Read first time 01/30/2003.   Referred to Committee on Technology, Telecommunications & Energy.

     AN ACT Relating to use tax on electricity consumption; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.14 RCW; and providing an effective date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.12 RCW to read as follows:
     (1) There is hereby levied and there shall be collected from every person in this state a use tax for the privilege of consuming electrical energy within this state.
     (2) The tax shall be levied and collected in an amount equal to the value of electrical energy multiplied by the rate in effect under RCW 82.16.020 for the public utility tax on a light and power business as defined in RCW 82.16.010. For the purposes of this section:
     (a) "Value of electrical energy" means the consideration paid, given, or contracted to be paid or given by the purchaser of the electrical energy to the seller of the electrical energy, but does not include any amounts that are paid for distributing and transmitting electrical energy subject to tax under this section if those amounts are subject to tax under chapter 82.16 RCW.
     (b) "Wheeling" means distributing and transmitting electrical energy.
     (3) The tax levied under this section does not apply to the consumption of electrical energy generated for the person's own use. For the purposes of this subsection:
     (a) Electrical energy is considered as generated by a person for that person's own use if the person owns or leases the generating facility, or a portion of the facility, that supplies electrical energy to the person, or has other financial arrangements with the owner of the facility that are comparable to an ownership or lease interest.
     (b) "Person" includes the person, affiliated parties to the person, and the person's tenants.
     (4) The tax levied under this section does not apply to the consumption of electrical energy and capacity if the user is:
     (a) A direct service industrial customer as defined in RCW 82.16.0495; or
     (b) A company that had the ability, as of the effective date of this act, to import into the state, over interstate transmission facilities owned by the company, electrical energy purchased out of state.
     (5) The tax levied in this section does not apply to the consumption of electrical energy purchased from a seller who has paid a tax under RCW 82.16.020 with respect to electrical energy for which exemption is sought under this subsection.
     (6) There shall be a credit against the tax levied in this section in an amount equal to the tax paid by:
     (a) The seller or buyer of the electrical energy subject to a gross receipts tax similar to that imposed under RCW 82.16.020 by any other state or political subdivision of any other state or any foreign country or political subdivision of any foreign country with respect to the electrical energy for which a credit is sought under this subsection; or
     (b) The person consuming the electrical energy upon which a use tax similar to the tax imposed under this section was paid to another state with respect to the electrical energy for which a credit is sought under this subsection.
     (7)(a) A light and power business wheeling electrical energy to a person subject to the tax under this section shall make a quarterly report to the department. The report must contain the kilowatt hours of electrical energy delivered and other information as the department may require.
     (b) The obligation of a light and power business to make a quarterly report under this section does not apply to the light and power business if the seller of the electrical energy subject to the tax under this section is licensed or registered to do business in the state.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.14 RCW to read as follows:
     (1) The governing body of a city or town, while not required by legislative mandate to do so, may, by resolution or ordinance for the purposes authorized by this section, fix and impose on every person a use tax for the privilege of consuming electrical energy within the city.
     (2) The tax shall be levied and collected in an amount equal to the value of electrical energy multiplied by the rate in effect for the tax on electrical energy businesses under RCW 35.21.870 in the city in which the electrical energy is consumed. For the purposes of this section:
     (a) "Value of electrical energy" means the consideration paid, given, or contracted to be paid or given by the purchaser of the electrical energy to the seller of the electrical energy, but does not include any amounts that are paid for distributing and transmitting electrical energy subject to tax under this section if those amounts are subject to tax under chapter 35.21 RCW.
     (b) "Wheeling" means distributing and transmitting electrical energy.
     (3) The tax levied under this section does not apply to the consumption of electrical energy generated for that person's own use. For the purposes of this subsection:
     (a) Electrical energy is considered as generated by a person for that person's own use if the person owns or leases the generating facility, or a portion of the facility that supplies electrical energy to the person, or has other financial arrangements with the owner of the facility that are comparable to an ownership or lease interest.
     (b) "Person" includes the person, affiliated parties to the person, and the person's tenants.
     (4) The tax levied under this section does not apply to the consumption of electrical energy and capacity if the user is:
     (a) A direct service industrial customer as defined in RCW 82.16.0495; or
     (b) A company that had the ability, as of the effective date of this act, to import into the state, over interstate transmission facilities owned by the company, electrical energy purchased out of state.
     (5) The tax levied in this section does not apply to the consumption of electrical energy purchased from a seller who has paid a tax under RCW 35.21.870 with respect to electrical energy for which exemption is sought under this subsection.
     (6) The tax levied in this section does not apply to the consumption of electrical energy purchased from a seller who has paid a tax under RCW 35.21.870 with respect to electrical energy for which exemption is sought under this subsection.
     (7) There shall be a credit against the tax levied in this section in an amount equal to the tax paid by:
     (a) The seller or buyer of the electrical energy subject to a gross receipts tax similar to that authorized under RCW 35.21.870 and imposed by any other state or political subdivision of any other state with respect to the electrical energy for which a credit is sought under this subsection; or
     (b) The person consuming the electrical energy upon which a use tax similar to the tax imposed under this section was paid to another state with respect to the electrical energy for which a credit is sought under this subsection.
     (8) The tax imposed in this section shall be paid by the person consuming the electrical energy. The administration and collection of the tax imposed under this section shall be as provided under RCW 82.14.050.

NEW SECTION.  Sec. 3   This act takes effect August 1, 2003.