BILL REQ. #:  S-0274.2 

Read first time 01/13/2003.   Referred to Committee on Ways & Means.

     AN ACT Relating to increasing the business and occupation tax credit for small business; amending RCW 82.04.4451; and providing an effective date.

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

Sec. 1   RCW 82.04.4451 and 1997 c 238 s 2 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. The maximum credit for a taxpayer for a reporting period is ((thirty-five)) seventy dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.
     (2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.
     (3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.
     (4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table shall be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection shall be used by all taxpayers in taking the credit provided in this section.
     (5) Beginning in calendar year 2004, the department shall increase the monthly dollar amount under subsection (1) of this section in use for that calendar year by the consumer price index. If any increase under this subsection is not a multiple of one dollar, the increase shall be rounded to the next lowest multiple of one dollar. The monthly amount determined under this subsection shall be used for reporting periods in the next calendar year.
     (6) As used in this section, "consumer price index" means the consumer price index compiled by the bureau of labor statistics, United States department of labor for the state of Washington. If the bureau of labor statistics develops more than one consumer price index for areas within the state, the index covering the greatest number of people, covering areas exclusively within the boundaries of the state, and including all items shall be used.

NEW SECTION.  Sec. 2   This act takes effect January 1, 2004.