HOUSE BILL REPORT
E2SSB 5799
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
As Reported by House Committee On:
Finance
Title: An act relating to business and occupation tax rates for certain fuel distributors.
Brief Description: Reducing business and occupation tax rates for certain fuel distributors.
Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Haugen, Prentice, Swecker, Berkey, Marr, Kilmer, Clements, Sheldon, Schoesler and Shin).
Brief History:
Finance: 4/17/07 [DP].
Brief Summary of Engrossed Second Substitute Bill |
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HOUSE COMMITTEE ON FINANCE
Majority Report: Do pass. Signed by 5 members: Representatives Hunter, Chair; Conway, Ericks, McIntire and Santos.
Minority Report: Do not pass. Signed by 4 members: Representatives Hasegawa, Vice Chair; Orcutt, Ranking Minority Member; Condotta, Assistant Ranking Minority Member and Roach.
Staff: Rick Peterson (786-7150).
Background:
The business and occupation (B&O) tax is levied for the privilege of doing business in
Washington. The tax is levied on the gross receipts of all business activities conducted
within the state. There are no deductions for the costs of doing business. The three principal
rates are 0.484 percent for manufacturing and wholesaling, 0.471 percent for retailing, and
1.5 percent for services.
The rate for persons engaged in selling tangible personal property at wholesale is 0.484
percent. This applies to sales made by motor vehicle fuel and special fuel distributors who
buy from a supplier and then sell fuel to a retailer.
Summary of Bill:
Effective July 1, 2007, until July 1, 2010, the B&O tax rate for motor and special fuel
distributors is reduced from 0.484 percent to 0.2904 percent. The reduced rate does not apply
to motor vehicle fuel distributors that are also licensed as suppliers, importers, exporters, or
blenders.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill contains an emergency clause and takes effect on July 1, 2007.
Staff Summary of Public Testimony:
(Concerns) The loss of the float on the payment of the gas tax will have a huge effect on the
gas distribution business. It will have a trickle down effect on our customers. The log truck
operators are in a dire condition and they need help. Distributors provide 30 to 35 days of
credit to their buyers and will no longer be able to do so if the float is taken away. The bill
should extend the relief to at least seven years in order for the reduced B&O rate to make the
distributors whole.
(In support) None.
(Opposed) None.
Persons Testifying: Charlie Brown, Washington Oil Marketers Association; and Chris Williams, Pettit Oil Company.