BILL REQ. #:  Z-0282.2 

Read first time 01/13/2005.   Referred to Committee on Finance.

     AN ACT Relating to imposing a tax on the privilege of handling carbonated beverages for sale; adding a new chapter to Title 82 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   (1) Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (a) "Carbonated beverage," otherwise known as "soda pop," means any packaged nonalcoholic liquid intended for human consumption that contains carbon dioxide and syrup, whether carbonation is obtained by natural or artificial means. "Packaged" includes cans, bottles, or other similar containers.
     (b) "Handling" or "handle" means having control of the carbonated beverage within this state and includes both actual and constructive handling of the beverage. "Actual handling" occurs when the person with control has physical possession over the beverage. "Constructive handling" occurs when the person with control does not have physical possession over the beverage. "Control" means the power to sell carbonated beverage or to authorize the sale by another.
     (c) "Previously taxed carbonated beverage" means a carbonated beverage in respect to which a tax has been paid under this chapter.
     (d) "Retailer" means a person who makes sales at retail.
     (e) "Syrup" means the concentrated mixture in either liquid or powdered form that contains sugar or a sugar substitute and that is an ingredient used to make carbonated beverages.
     (f) "Wholesaler" means a person making sales at wholesale.
     (2) The definitions in chapters 82.04, 82.08, and 82.12 RCW apply to this chapter.

NEW SECTION.  Sec. 2   (1) A tax is imposed on the privilege of handling for sale a carbonated beverage in this state. The rate of the tax shall be equal to forty-two one-hundredths cents per ounce. Fractional amounts shall be taxed proportionately.
     (2) Chapter 82.32 RCW applies to the tax imposed in this chapter. The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the tax imposed in this chapter.
     (3)(a) It is the intent of the legislature that the tax be imposed on the privilege of handling for sale carbonated beverages in this state, to impose such tax on the first handling of the carbonated beverage in this state, and to impose the tax only once. It is the legislature's expectation that in most instances the imposition of tax will be at the wholesale level.
     (b) If tax under this chapter has not been paid with respect to a carbonated beverage, the department may collect the tax from any other person who handles the carbonated beverage. If tax is paid by any person other than the person subject to tax under this chapter, the amount of tax paid constitutes a debt owed by the person subject to tax to the person who paid the tax.
     (c) If the person who first handles for sale a carbonated beverage is not subject to tax by the state, the tax is imposed on the first person handling for sale the carbonated beverage who is subject to tax by the state.
     (d) In no instance may the tax be imposed upon a person who buys as a consumer.
     (4)(a) Every person who sells carbonated beverages to persons other than the ultimate consumer shall provide with each sale an itemized invoice showing the seller's name and address, the purchaser's name and address, the date of sale, and shall separately state the amount of tax paid on any carbonated beverages. The seller shall preserve legible copies of all such invoices for five years from the date of sale.
     (b) Every retailer shall procure itemized invoices of all carbonated beverages purchased. The invoices shall show the name and address of the seller, the date of purchase, and shall separately state the amount of tax paid on any carbonated beverages. The retailer shall preserve a legible copy of all such invoices for five years from the date of purchase.
     (c) Invoices shall be available for inspection by the department at the wholesaler's or retailer's place of business.
     (d) Notwithstanding (a) and (b) of this subsection, if a person subject to tax makes both retail and wholesale sales of carbonated beverages, the department may provide special instructions regarding invoices for such person and its customers.
     (5) Moneys collected under this chapter shall be deposited into the health services account in accordance with RCW 43.72.900.

NEW SECTION.  Sec. 3   The following are exempt from the tax imposed in this chapter:
     (1) Any successive handling of a previously taxed carbonated beverage;
     (2) The handling of any carbonated beverage that is shipped or transported to a point outside the state for sale outside the state; and
     (3) Any handling of a carbonated beverage where the first handling in this state occurred before the effective date of this section.

NEW SECTION.  Sec. 4   (1) Credit shall be allowed against taxes imposed in this chapter for any carbonated beverage tax paid to another state with respect to the same carbonated beverage. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the handling of that carbonated beverage.
     (2) For the purpose of this section:
     (a) "Carbonated beverage tax" means a tax:
     (i) That is imposed on the privilege of handling for sale carbonated beverages and that is not generally imposed on other activities or privileges; and
     (ii) That is measured by the volume of the carbonated beverage.
     (b) "State" means (i) a state of the United States other than Washington, or any political subdivision of such other state; (ii) the District of Columbia; (iii) any foreign country or political subdivision thereof; and (iv) any federally recognized Indian tribe.

NEW SECTION.  Sec. 5   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect June 1, 2005.

NEW SECTION.  Sec. 6   Sections 1 through 5 of this act constitute a new chapter in Title 82 RCW.