SENATE BILL REPORT

HB 2567

As Reported by Senate Committee On:

Ways & Means, March 8, 2010

Title: An act relating to the excise taxation of publicly owned facilities accredited by the association of zoos and aquariums.

Brief Description: Concerning the excise taxation of publicly owned facilities accredited by the association of zoos and aquariums.

Sponsors: Representatives Carlyle, Dickerson, Simpson, Anderson, White, Nelson, Sullivan, Kenney, Maxwell, Liias, Pettigrew and Santos.

Brief History: Passed House: 2/15/10, 97-1.

Committee Activity: Ways & Means: 3/08/10 [DPA, DNP, w/oRec].

Majority Report: Do pass as amended.

Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Tom, Vice Chair, Operating Budget; Zarelli, Ranking Minority Member; Brandland, Fairley, Hewitt, Hobbs, Keiser, Kohl-Welles, McDermott, Murray, Oemig, Pridemore, Regala and Rockefeller.

Minority Report: Do not pass.

Signed by Senator Honeyford.

Minority Report: That it be referred without recommendation.

Signed by Senators Parlette and Schoesler.

Staff: Dianne Criswell (786-7433)

Background: The business and occupation (B&O) tax is levied for the privilege of doing business in Washington. The tax is levied on the gross receipts of all business activities conducted within the state. There are no deductions for the costs of doing business. The sales tax is paid on each retail sale of most articles of tangible personal property, certain services, and extended warranties. The use tax is imposed on the use of articles of tangible personal property, certain services, and extended warranties when the sale or acquisition has not been subject to the sales tax. The use tax commonly applies to purchases made from out-of-state firms. Artistic or cultural organizations are nonprofit organizations that are organized and operated exclusively for the purpose of providing artistic or cultural exhibitions, presentations, performances, or education programs. These organizations may deduct income derived from government grants, tuition for educational programs, items manufactured for artistic or cultural purposes by the organization, and business activities (such as admissions fees). In addition, these organizations are also exempt from paying sales and use taxes on objects of art, items with cultural value, objects used to create art, and items used to display art or to present cultural performances.

Summary of Bill (Recommended Amendments): This bill provides a B&O tax deduction for nonprofit organizations or metropolitan park districts for business activities conducted by organizations or districts with respect to publicly-owned zoological facilities (which must be accredited by the Association of Zoos and Aquariums). Facilities owned by a nonprofit organization and used for providing sanctuary and care for endangered or threatened species and wildlife educational opportunities for the public are also allowed this B&O deduction.

EFFECT OF CHANGES MADE BY WAYS & MEANS COMMITTEE (Recommended Amendments): Facilities owned by a nonprofit organization and used for providing sanctuary and care for endangered or threatened species and wildlife educational opportunities for the public are also allowed this B&O deduction.

Appropriation: None.

Fiscal Note: Available.

Committee/Commission/Task Force Created: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Companion SB 6272: PRO: The zoos and aquariums in Washington serve an important educational role for our citizens, especially children. Woodland Park Zoo and the Seattle Aquarium run training programs for teachers. Also, these institutions provide passes and transportation for children. We are an important part of the scientific and cultural community in Washington. We are similar to other organizations which receive tax preferences. This proposal would provide some parity. While the impact of this bill is small, it would be a great benefit to these institutions. There would be enough savings to fund a position or to provide free passes for educational programs. This would be a good use of public resources.

Persons Testifying: PRO: Senator Kohl-Welles, prime sponsor; Deborah Jensen, Woodland Park Zoo; Bob Davidson, Seattle Aquarium Society.