| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Finance Committee | |
HB 1404
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.
Brief Description: Providing a sales tax exemption for certain trail grooming services.
Sponsors: Representatives Wallace, Hinkle, Condotta, O'Brien, Fromhold, Ahern, McCune and Warnick.
Brief Summary of Bill |
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Hearing Date: 2/2/07
Staff: Jeff Mitchell (786-7139).
Background:
Retail sales and use taxes are imposed by the state, most cities, and all counties. Retail sales
taxes are imposed on retail sales of most articles of tangible personal property and some services.
Use taxes apply to the value of most tangible personal property and some services when used in
this state, if retail sales taxes were not collected when the property or services were acquired by
the user. Use tax rates are the same as retail sales tax rates. The state tax rate is 6.5 percent.
Local tax rates vary from 0.5 percent to 2.4 percent, depending on the location. The average
local tax rate is 2.0, for an average combined state and local tax rate of 8.5 percent.
Included in the retail sales tax base are charges made for clearing land and moving earth, except
where land is leveled for the purpose of farming. This includes snow compacting, snow
redistribution, and snow removal, on state-owned or privately-owned trails.
The Parks and Recreation Commission (Commission) has managed a winter recreation program
since 1975 called Sno-Park. The Commission provides cleared parking areas in close proximity
to groomed and backcountry trails on public and private lands. The Commission contracts with
vendors to provide the trail grooming services, in which the vendor maintains and arranges the
snow cover on the trails to facilitate the type of designated winter recreation for the trail.
A 2004 audit by the Department of Revenue found that the Commission should pay sales taxes
on its purchased trail grooming services.
Summary of Bill:
Trail grooming services provided to the state of Washington and nonprofit corporations are
exempted from sales tax.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.