BILL REQ. #:  H-3347.3 

Prefiled 1/3/2006. Read first time 01/09/2006.   Referred to Committee on Finance.

     AN ACT Relating to excise tax relief for farm machinery and equipment; amending RCW 82.14.020, 82.14.020, and 82.14.070; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; providing a contingent effective date; and providing a contingent expiration date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to the sale of:
     (a) Used farm machinery and equipment to a farmer; or
     (b) Replacement parts for, or services rendered in respect to, farm machinery and equipment used by a farmer.
     (2) A person claiming an exemption under this section must keep records necessary for the department to verify eligibility under this section. An exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the certificate for the seller's files.
     (3) The exemption authorized in this section only applies to the tax levied in RCW 82.08.020 and does not apply to any sales and use tax authorized in chapter 82.14 RCW.
     (4) The definitions in this subsection apply to this section.
     (a) "Farmer" and "agricultural products" have the meanings provided in RCW 82.04.213.
     (b) "Farm machinery and equipment" means machinery and equipment designed for the purpose of growing, raising, or producing agricultural products.
     (c) "Services" means labor for repairs, maintenance, or the replacement of parts, for machinery and equipment.
     (d) "Used farm machinery and equipment" means farm machinery and equipment that:
     (i) Has been previously sold at retail and has been subjected to tax under this chapter;
     (ii) Has been previously used and has been subjected to tax under chapter 82.12 RCW;
     (iii) Has previously sold at retail in any other state of the United States, any political subdivision thereof, the District of Columbia, or any foreign country or political subdivision thereof.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use by a farmer of:
     (a) Used farm machinery and equipment; or
     (b) Replacement parts for, or services rendered in respect to, farm machinery and equipment.
     (2) The exemption authorized in this section only applies to taxes levied under the provisions of this chapter and does not apply to any sales and use tax authorized in chapter 82.14 RCW.
     (3) The definitions and recordkeeping requirements in section 1 of this act apply to this section.

Sec. 3   RCW 82.14.020 and 2005 c 514 s 111 are each amended to read as follows:
     For purposes of this chapter:
     (1) A retail sale consisting solely of the sale of tangible personal property shall be deemed to have occurred at the retail outlet at or from which delivery is made to the consumer;
     (2) A retail sale consisting essentially of the performance of personal, business, or professional services shall be deemed to have occurred at the place at which such services were primarily performed, except that for the performance of a tow truck service, as defined in RCW 46.55.010, the retail sale shall be deemed to have occurred at the place of business of the operator of the tow truck service;
     (3) A retail sale consisting of the rental of tangible personal property shall be deemed to have occurred (a) in the case of a rental involving periodic rental payments, at the place of primary use by the lessee during the period covered by each payment, or (b) in all other cases, at the place of first use by the lessee;
     (4) A retail sale within the scope of RCW 82.04.050(2), and a retail sale of taxable personal property to be installed by the seller shall be deemed to have occurred at the place where the labor and services involved were primarily performed;
     (5)(a) A retail sale consisting of the providing to a consumer of telephone service, as defined in RCW 82.04.065, other than a sale of tangible personal property under subsection (1) of this section or a rental of tangible personal property under subsection (3) of this section or a sale of mobile telecommunications services, shall be deemed to have occurred at the situs of the telephone or other instrument through which the telephone service is rendered;
     (b) A retail sale consisting of the providing of telecommunications services shall be sourced in accordance with RCW 82.32.520;
     (6) A retail sale of linen and uniform supply services is deemed to occur as provided in RCW 82.08.0202;
     (7) A retail sale consisting of an extended warranty shall be deemed to have occurred at the business location of the seller if the extended warranty is received by the purchaser at that location. If an extended warranty is not received by the purchaser at the business location of the seller, a retail sale of an extended warranty shall be deemed to have occurred at the location where receipt by the buyer occurs;
     (8) "City" means a city or town;
     (9) "Persons who are taxable by the state," or similar language, means those persons required to collect and remit state sales or use tax to the department, or would be required to do the same if not for a state sales or use tax exemption exempting the sale or use from state sales or use taxes.
     (10) The meaning ascribed to words and phrases in chapters 82.04, 82.08 and 82.12 RCW, ((as now or hereafter amended,)) insofar as applicable, ((shall)) have full force and effect with respect to taxes imposed under authority of this chapter;
     (((10))) (11) "Taxable event" ((shall)) means any retail sale, or any use, upon which a state tax is imposed pursuant to chapter 82.08 or 82.12 RCW, ((as they now exist or may hereafter be amended: PROVIDED, HOWEVER, That)) or any retail sale, or any use, upon which a state tax in chapter 82.08 or 82.12 RCW is not applicable due to a state sales or use tax exemption, if the provisions describing the sales or use tax exemption explicitly exempt only the state portion of the sales or use tax. The term shall not include a retail sale taxable pursuant to RCW 82.08.150((, as now or hereafter amended));
     (((11))) (12) "Treasurer or other legal depository" shall mean the treasurer or legal depository of a county or city.

Sec. 4   RCW 82.14.020 and 2005 c 514 s 112 are each amended to read as follows:
     For purposes of this chapter:
     (1) A retail sale consisting solely of the sale of tangible personal property shall be deemed to have occurred at the retail outlet at or from which delivery is made to the consumer;
     (2) A retail sale consisting essentially of the performance of personal, business, or professional services shall be deemed to have occurred at the place at which such services were primarily performed, except that for the performance of a tow truck service, as defined in RCW 46.55.010, the retail sale shall be deemed to have occurred at the place of business of the operator of the tow truck service;
     (3) A retail sale consisting of the rental of tangible personal property shall be deemed to have occurred (a) in the case of a rental involving periodic rental payments, at the primary place of use by the lessee during the period covered by each payment, or (b) in all other cases, at the place of first use by the lessee;
     (4) A retail sale within the scope of RCW 82.04.050(2), and a retail sale of taxable personal property to be installed by the seller shall be deemed to have occurred at the place where the labor and services involved were primarily performed;
     (5) A retail sale consisting of the providing of telecommunications services shall be sourced in accordance with RCW 82.32.520;
     (6) A retail sale of linen and uniform supply services is deemed to occur as provided in RCW 82.08.0202;
     (7) A retail sale consisting of an extended warranty shall be deemed to have occurred at the business location of the seller if the extended warranty is received by the purchaser at that location. If an extended warranty is not received by the purchaser at the business location of the seller, a retail sale of an extended warranty shall be deemed to have occurred at the location where receipt by the buyer occurs;
     (8) "City" means a city or town;
     (9) "Persons who are taxable by the state," or similar language, means those persons required to collect and remit state sales or use tax to the department, or would be required to do the same if not for a state sales or use tax exemption exempting the sale or use from state sales or use taxes.
     (10) The meaning ascribed to words and phrases in chapters 82.04, 82.08 and 82.12 RCW, ((as now or hereafter amended,)) insofar as applicable, ((shall)) have full force and effect with respect to taxes imposed under authority of this chapter;
     (((10))) (11) "Taxable event" ((shall)) means any retail sale, or any use, upon which a state tax is imposed pursuant to chapter 82.08 or 82.12 RCW, ((as they now exist or may hereafter be amended: PROVIDED, HOWEVER, That)) or any retail sale, or any use, upon which a state tax in chapter 82.08 or 82.12 RCW is not applicable due to a state sales or use tax exemption, if the provisions describing the sales or use tax exemption explicitly exempt only the state portion of the sales or use tax. The term shall not include a retail sale taxable pursuant to RCW 82.08.150((, as now or hereafter amended));
     (((11))) (12) "Treasurer or other legal depository" shall mean the treasurer or legal depository of a county or city.

Sec. 5   RCW 82.14.070 and 2003 c 168 s 202 are each amended to read as follows:
     It is the intent of this chapter that any local sales and use tax adopted pursuant to this chapter be identical to the state sales and use tax, unless otherwise prohibited by federal law, and with other local sales and use taxes adopted pursuant to this chapter. It is further the intent of this chapter that the local sales and use tax shall be imposed upon an individual taxable event simultaneously with the imposition of the state sales or use tax upon the same taxable event, unless the taxable event is specifically excluded from the state portion of the sales or use tax. The rule making powers of the state department of revenue contained in RCW 82.08.060 and 82.32.300 shall be applicable to this chapter. The department shall, as soon as practicable, and with the assistance of the appropriate associations of county prosecutors and city attorneys, draft a model resolution and ordinance.

NEW SECTION.  Sec. 6   (1) Section 3 of this act expires on the date chapter 67, Laws of 2002 becomes null and void.
     (2) Section 4 of this act takes effect on the date chapter 67, Laws of 2002 becomes null and void.