| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Finance Committee | |
HB 2352
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: Exempting persons engaged in farming and certain farming services from business and occupation taxation.
Sponsors: Representatives Grant, Linville, Simpson and Bailey.
Brief Summary of Bill |
|
|
|
Hearing Date:
Staff: Rick Peterson (786-7150).
Background:
The business and occupation (B&O) tax is assessed on the gross proceeds of a business and the
tax rate depends on which category the business activity is placed. The business and occupation
(B&O) tax does not apply to agricultural products sold at wholesale by farmers. Currently,
custom farming activities fall under the catch-all "service and other activities" category and are
subject to a 1.5 percent tax rate. Motor transportation services are subject to the public utility tax
and are assessed a 1.926 percent rate.
Summary of Bill:
Custom farming services, such as custom plowing, cultivation, planting and harvesting
performed for farmers is exempt from the B&O tax. Custom fertilizing and custom spraying are
exempt from the B&O tax only if performed by a person who is related to the farmer.
Farm management services, contract labor services, and services for farm animals, if performed
by a person related to the farmer or the custom farm operator, is exempt from B&O tax.
Persons hauling agricultural products or farm machinery are exempt from the public utility tax if
the service is provided to a farmer or a person performing custom farming service, but only if the
hauling is done by a related person.
Appropriation: None.
Fiscal Note: Requested on March 9, 2007.
Effective Date: The bill contains an emergency clause and takes effect on July 1, 2007.