| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Finance Committee | |
HB 2146
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 for the transfer of sales and use taxes on toll projects to reduce the amount of the project.
Sponsors: Representatives Seaquist, Rolfes, Lantz, Appleton, Simpson and Kelley.
Brief Summary of Bill |
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Hearing Date:
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,
including state construction projects. 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.
A new suspension bridge, more than 80 percent complete, is being built parallel to, and south of,
the Narrows Bridge built in 1950. The new bridge on State Route 16 is scheduled to open this
summer. In summer 2008, when the new and existing bridges open in their final form, the 1950
span will take drivers westbound on two general purpose lanes and one carpool lane. The new
bridge will carry eastbound traffic on two general purpose lanes, one carpool lane and a fourth
drop lane.
The Tacoma Narrows Bridge toll project currently has a sales and use tax deferral. The taxes are
deferred for five years after tolling is commenced which is currently estimated to begin in 2007.
In 2012, the tax would become due and is payable in 10 annual installments.
Summary of Bill:
State sales and use taxes imposed on the Tacoma Narrows Bridge project for which a deferral has
been granted do not need to be repaid. Local sales and use taxes remain deferred until 2012.
States sales and use taxes collected on road and bridge projects where 80 percent or more of the
cost is paid or recovered through tolls are transferred to the tolling account of the project to
reduce the cost of the project.
Appropriation: None.
Fiscal Note: Requested on March 3, 2007.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.