BILL REQ. #:  H-1027.2 

Read first time 01/26/2007.   Referred to Committee on Finance.

     AN ACT Relating to an allowance for retailers for sales and use tax collection costs; adding a new section to chapter 82.32 RCW; creating a new section; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that sellers provide a valuable service to the state of Washington and its local governments by collecting and remitting sales and use taxes and that in performing these services sellers incur significant costs as outlined in the recently completed joint cost of collection study, which shows the incremental costs incurred by sellers due to the state's imposition of the duty to collect sales and use tax. The failure to reimburse sellers for this service amounts to a hidden tax in the form of a government mandated cost of doing business on sellers that is not similarly born by nonretail businesses. The legislature declares its intent to correct the inequity caused by the mandate on sellers to collect sales and use taxes by providing for reimbursement to sellers who collect, timely report, and remit those taxes. The money to pay this allowance shall come entirely from state funds. Further, the legislature finds that there is a significant connection between the training provided by sellers to people entering the job market and the training provided by a vocational-technical or junior college education so that part of the funds provided for in this act should be dedicated to providing student access to those educational institutions.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.32 RCW to read as follows:
     (1) A seller, who collects and remits state and local sales and use taxes, is entitled to reimbursement of the expenses the seller incurred in collecting and remitting these taxes in the form of a credit, as provided in this section.
     (2) The credit is equal to ninety percent of the amount calculated in subsection (4) of this section. The credit is taken on the combined excise tax return for the same reporting period in which the taxable sales occur.
     (3) An amount equal to ten percent of the amount calculated in subsection (4) of this section shall be transferred by the state treasurer, as directed by the department, to the workforce training and education coordinating board. The board shall use the money for the Washington award for vocational excellence program under chapter 28C.04 RCW.
     (4) For the purposes of determining the tax credit under subsection (2) of this section and the contribution to the Washington award for vocational excellence program under subsection (3) of this section, the amount of the credit shall be calculated as follows: One and one-half percent is multiplied by the state sales tax under RCW 82.08.020(1) and general local sales taxes, due on a return for a reporting period in which a taxpayer claims a credit under this section.
     (5) The credit provided for in this section is taken only from the state's portion of the taxes due on the return and does not reduce the amount due to any city, county, or other municipality.

NEW SECTION.  Sec. 3   This act takes effect October 1, 2007.