| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Finance Committee | |
HB 3260
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 partial sales and use tax exemptions for certain computer server equipment.
Sponsors: Representatives Grant, Santos, Eddy, Springer, Goodman, Warnick, Hinkle, Armstrong, Orcutt, Kelley, McIntire and Ross; by request of Governor Gregoire.
Brief Summary of Bill |
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Hearing Date: 2/5/08
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. The state tax rate is 6.5 percent. Local tax rates vary from 0.5 percent to 2.4 percent
depending on the location.
Summary of Bill:
An exemption from the state portion of the sales and use tax is provided for replacement server
equipment, and for labor and services rendered in respect to installing such replacement server
equipment in an eligible computer data center for a qualifying business. A qualifying business
claiming the exemption must first pay the sales tax and then may apply for a remittance of 50
percent of the state tax paid. The exemption does not apply to any local sales or use taxes.
The Department of Revenue must remit on a quarterly basis the amount of the exemption to a
qualifying business that submitted applications during the previous quarter.
A data center is a facility comprised of one or more buildings constructed or refurbished
specifically, and used primarily, to house servers. It must have at least 20,000 square feet of
floor space dedicated to housing working servers located in a rural county.
A qualifying business is a business entity that exists for the primary purpose of engaging in
commercial activity for a profit. It means a corporation, other than any public entity or an
association, limited liability company, partnership, or other legal entity.
Replacement server equipment is server equipment that replaces existing server equipment
located at the eligible data center.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect on July 1, 2008.