BILL REQ. #:  H-3749.1 

Prefiled 1/5/2006. Read first time 01/09/2006.   Referred to Committee on Finance.

     AN ACT Relating to excise tax relief for farm machinery and equipment; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 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 82.08 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 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 farm 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 definitions and recordkeeping requirements in section 1 of this act apply to this section.

NEW SECTION.  Sec. 3   This act takes effect July 1, 2006.