BILL REQ. #:  S-4576.1 

Read first time 01/23/08.   Referred to Committee on Ways & Means.

     AN ACT Relating to creating a business and occupation tax credit for enhancing educational opportunities for children with disabilities; reenacting and amending RCW 82.32.590 and 82.32.600; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.32 RCW; and providing an effective date.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for contributions made by a person to:
     (a) A public school for the purpose of enhancing educational opportunities for eligible children; or
     (b) A scholarship funding organization.
     (2) The amount of credit claimed for a reporting period may not exceed the lesser of:
     (a) Fifty thousand dollars; or
     (b) Seventy-five percent of the tax otherwise due under this chapter for that reporting period.
     (3) The purpose of the tax credit authorized under this section is to enhance educational opportunities for eligible children.
     (4) As used in this section:
     (a) "Eligible children" means children with disabilities as defined in RCW 28A.155.020.
     (b) "Public school" has the same meaning as provided in RCW 28A.150.010.
     (c) "Scholarship funding organization" means a charitable organization in this state that:
     (i) Is exempt from federal income tax pursuant to 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code of 1986, as amended;
     (ii) Allocates at least ninety percent of its annual revenue to a scholarship program for tuition assistance grants to eligible children; and
     (iii) Complies with the disclosure requirements established by the department under section 2 of this act.
     (5) The credit under this section may be claimed against taxes due for the calendar year in which the contribution is made and may not be carried over to another year. The person must make the contribution before claiming a credit authorized under this section. The amount of credit claimed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period. No refunds may be granted for credits under this section.
     (6) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information to evaluate whether the stated goals of legislation were achieved. A person taking a credit under this section shall make an annual survey to the department as provided in section 2 of this act.
     (7) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section.
     (8) If at any time the department finds that a person is not eligible for the tax credit under this section, the amount of taxes for which a credit has been claimed shall be immediately due. The department shall assess interest, but not penalties, on the tax credit for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent taxes under chapter 82.32 RCW, shall be assessed retroactively to the date the tax credit was taken, and shall accrue until the taxes for which a credit has been used are repaid.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.32 RCW to read as follows:
     (1) Each person claiming a tax preference that requires a survey under this section must report information to the department by filing a complete annual survey. The survey is due by March 31st of the year following any calendar year in which the tax preference is taken. The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey must include the amount of the tax preference taken.
     (2) The department may request additional information necessary to measure the results of, or determine eligibility for, the tax preference, to be submitted at the same time as the survey.
     (3) All information collected under this section, except the amount of the tax preference taken, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax preference taken is not subject to the confidentiality provisions of RCW 82.32.330. If the amount of the tax preference taken as reported on the survey is different than the amount actually taken or otherwise allowed by the department based on the taxpayer's excise tax returns or other information known to the department, the amount actually taken or allowed may be disclosed.
     (4) If a person fails to submit an annual survey under this section by the due date of the report or any extension under RCW 82.32.590, the department must declare the amount of the tax preference taken for the previous calendar year to be immediately due and payable. The department must assess interest, but not penalties, on the amounts due under this section. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the credit was claimed, and must accrue until the taxes for which the credit was claimed are repaid. This information is not subject to the confidentiality provisions of RCW 82.32.330.
     (5) The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers must be included in any category. The department must report these statistics to the legislature each year by September 1st.
     (6) For the purposes of this section, "tax preference" has the same meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a survey under this section.

Sec. 3   RCW 82.32.590 and 2006 c 354 s 17, 2006 c 300 s 10, 2006 c 177 s 8, 2006 c 112 s 7, and 2006 c 84 s 7 are each reenacted and amended to read as follows:
     (1) If the department finds that the failure of a taxpayer to file an annual survey or annual report under RCW 82.04.4452, 82.32.5351, 82.32.650, 82.32.635, 82.32.640, 82.32.630, 82.32.610, section 2 of this act, or 82.74.040 by the due date was the result of circumstances beyond the control of the taxpayer, the department shall extend the time for filing the survey or report. Such extension shall be for a period of thirty days from the date the department issues its written notification to the taxpayer that it qualifies for an extension under this section. The department may grant additional extensions as it deems proper.
     (2) In making a determination whether the failure of a taxpayer to file an annual survey or annual report by the due date was the result of circumstances beyond the control of the taxpayer, the department shall be guided by rules adopted by the department for the waiver or cancellation of penalties when the underpayment or untimely payment of any tax was due to circumstances beyond the control of the taxpayer.

Sec. 4   RCW 82.32.600 and 2007 c 54 s 23 and 2007 c 54 s 22 are each reenacted and amended to read as follows:
     (1) Persons required to file annual surveys or annual reports under RCW 82.04.4452 or 82.32.5351, 82.32.610, 82.32.630, 82.32.635, 82.32.640, section 2 of this act, or 82.74.040 must electronically file with the department all surveys, reports, returns, and any other forms or information the department requires in an electronic format as provided or approved by the department. As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.
     (2) Any survey, report, return, or any other form or information required to be filed in an electronic format under subsection (1) of this section is not filed until received by the department in an electronic format.
     (3) The department may waive the electronic filing requirement in subsection (1) of this section for good cause shown.

NEW SECTION.  Sec. 5   This act takes effect July 1, 2008.