BILL REQ. #:  S-0692.1 

Read first time 01/19/2005.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to the taxation of social card games; amending RCW 9.46.110; 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   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the state department of revenue.
     (2) "Gross revenue" means any fees collected in regard to social card games and the gross wagers received by a licensee from the operation of house-banked social card games, less the amount paid to players for winning wagers, accrual of prizes for progressive jackpot contests, and repayment of amounts used to seed guaranteed progressive jackpot prizes.
     (3) "House-banked social card game" means a social card game in which the operator of the card room participates in the card game as a house or central bank.
     (4) "Social card game" means social card game as defined in RCW 9.46.0282.

NEW SECTION.  Sec. 2   (1) There is levied a state tax on persons engaging in the operation of social card games for which a license is required under chapter 9.46 RCW. The rate of the tax shall equal ten percent of the gross revenue from the social card games.
     (2) The amount of taxes imposed by a county, city-county, city, or town on social card games under RCW 9.46.110 in excess of ten percent of gross revenue of the social card games shall be credited against the tax imposed under subsection (1) of this section.
     (3) Except as provided in subsection (2) of this section, the tax imposed under this section is in addition to any other taxes that may be imposed by law.
     (4) All receipts from the tax imposed under this section shall be deposited into the state general fund.

NEW SECTION.  Sec. 3   (1) The department shall administer the tax imposed under this chapter.
     (2) Chapter 82.32 RCW applies to the administration, collection, and enforcement of the tax imposed under this chapter.
     (3) The tax due dates, reporting periods, and return requirements applicable to chapter 82.04 RCW apply equally to the tax imposed in this chapter.
     (4) The department may adopt such rules as may be necessary to enforce and administer the provisions of this chapter.

Sec. 4   RCW 9.46.110 and 1999 c 221 s 1 are each amended to read as follows:
     (1) The legislative authority of any county, city-county, city, or town, by local law and ordinance, and in accordance with the provisions of this chapter and rules adopted under this chapter, may provide for the taxing of any gambling activity authorized by this chapter within its jurisdiction, the tax receipts to go to the county, city-county, city, or town so taxing the activity. Any such tax imposed by a county alone shall not apply to any gambling activity within a city or town located in the county but the tax rate established by a county, if any, shall constitute the tax rate throughout the unincorporated areas of such county.
     (2) The operation of punch boards and pull-tabs are subject to the following conditions:
     (a) Chances may only be sold to adults;
     (b) The price of a single chance may not exceed one dollar;
     (c) No punch board or pull-tab license may award as a prize upon a winning number or symbol being drawn the opportunity of taking a chance upon any other punch board or pull-tab;
     (d) All prizes available to be won must be described on an information flare. All merchandise prizes must be on display within the immediate area of the premises in which any such punch board or pull-tab is located. Upon a winning number or symbol being drawn, a merchandise prize must be immediately removed from the display and awarded to the winner. All references to cash or merchandise prizes, with a value over twenty dollars, must be removed immediately from the information flare when won, or such omission shall be deemed a fraud for the purposes of this chapter; and
     (e) When any person wins money or merchandise from any punch board or pull-tab over an amount determined by the commission, every licensee shall keep a public record of the award for at least ninety days containing such information as the commission shall deem necessary.
     (3)(a) Taxation of bingo and raffles shall never be in an amount greater than five percent of the gross receipts from a bingo game or raffle less the amount awarded as cash or merchandise prizes.
     (b) Taxation of amusement games shall only be in an amount sufficient to pay the actual costs of enforcement of the provisions of this chapter by the county, city or town law enforcement agency and in no event shall such taxation exceed two percent of the gross receipts from the amusement game less the amount awarded as prizes.
     (c) No tax shall be imposed under the authority of this chapter on bingo or amusement games when such activities or any combination thereof are conducted by any bona fide charitable or nonprofit organization as defined in this chapter, which organization has no paid operating or management personnel and has gross receipts from bingo or amusement games, or a combination thereof, not exceeding five thousand dollars per year, less the amount awarded as cash or merchandise prizes.
     (d) No tax shall be imposed on the first ten thousand dollars of gross receipts less the amount awarded as cash or merchandise prizes from raffles conducted by any bona fide charitable or nonprofit organization as defined in this chapter.
     (e) Taxation of punch boards and pull-tabs for bona fide charitable or nonprofit organizations is based on gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes, and shall not exceed a rate of ten percent. At the option of the county, city-county, city, or town, the taxation of punch boards and pull-tabs for commercial stimulant operators may be based on gross receipts from the operation of the games, and may not exceed a rate of five percent, or may be based on gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes, and may not exceed a rate of ten percent.
     (f) Taxation of social card games may not exceed ((twenty)) ten percent of the gross revenue from such games, except that for any county, city-county, city, or town that imposed and collected a tax on card games under this section on January 1, 2005, that is greater than ten percent of the gross revenue from such games, taxation of social card games may not exceed the rate in effect on January 1, 2005.
     (4) Taxes imposed under this chapter become a lien upon personal and real property used in the gambling activity in the same manner as provided for under RCW 84.60.010. The lien shall attach on the date the tax becomes due and shall relate back and have priority against real and personal property to the same extent as ad valorem taxes.

NEW SECTION.  Sec. 5   Sections 1 through 3 of this act constitute a new chapter in Title 82 RCW.

NEW SECTION.  Sec. 6   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 July 1, 2005.