BILL REQ. #: S-0868.2
State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 01/22/09. Referred to Committee on Ways & Means.
AN ACT Relating to providing sales and use tax exemptions for senior residents of qualified low-income senior housing facilities; amending RCW 82.08.0293, 82.08.195, 82.12.0293, and 82.12.195; 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 low-income senior
citizens are one of the most vulnerable segments of our population who
often find it difficult to find safe and clean housing that is also
affordable. The federal government has identified this population as
being at risk. The federal government provides income tax credits and
favorable financing to encourage developers and operators to provide
safe and clean housing for our low-income senior citizens. There are
only four such facilities in the state, and it is doubtful that any new
ones will be built in the future. These four facilities offer "service
packages" to their residents, which may include meals, housekeeping,
recreation, laundry, and transportation. Washington's sales and use
tax law provides generally that when multiple goods and services are
offered for one nonitemized price, the entire transaction is subject to
sales or use tax if any of the component goods or services are subject
to sales tax. Consequently, in order to provide tax relief to these
vulnerable tenants, the legislature intends to establish sales and use
tax exemptions for the sale of service packages and to meals sold
outside of a service package when provided by the lessor or operator of
these senior housing facilities to tenants who are at least sixty-two
years old.
Sec. 2 RCW 82.08.0293 and 2004 c 153 s 201 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 shall not apply to sales of
food and food ingredients. "Food and food ingredients" means
substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and
are consumed for their taste or nutritional value. "Food and food
ingredients" does not include:
(a) "Alcoholic beverages," which means beverages that are suitable
for human consumption and contain one-half of one percent or more of
alcohol by volume; and
(b) "Tobacco," which means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
(2) The exemption of "food and food ingredients" provided for in
subsection (1) of this section shall not apply to prepared food, soft
drinks, or dietary supplements.
(a) "Prepared food" means:
(i) Food sold in a heated state or heated by the seller;
(ii) Food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins, or
straws. A plate does not include a container or packaging used to
transport the food; or
(iii) Two or more food ingredients mixed or combined by the seller
for sale as a single item, except:
(A) Food that is only cut, repackaged, or pasteurized by the
seller; or
(B) Raw eggs, fish, meat, poultry, and foods containing these raw
animal foods requiring cooking by the consumer as recommended by the
federal food and drug administration in chapter 3, part 401.11 of The
Food Code, published by the food and drug administration, as amended or
renumbered as of January 1, 2003, so as to prevent foodborne illness.
(b) "Prepared food" does not include the following food or food
ingredients, if the food or food ingredients are sold without eating
utensils provided by the seller:
(i) Food sold by a seller whose proper primary North American
industry classification system (NAICS) classification is manufacturing
in sector 311, except subsector 3118 (bakeries), as provided in the
"North American industry classification system -- United States, 2002";
(ii) Food sold in an unheated state by weight or volume as a single
item; or
(iii) Bakery items. The term "bakery items" includes bread, rolls,
buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes,
tortes, pies, tarts, muffins, bars, cookies, or tortillas.
(c) "Soft drinks" means nonalcoholic beverages that contain natural
or artificial sweeteners. Soft drinks do not include beverages that
contain: Milk or milk products; soy, rice, or similar milk
substitutes; or greater than fifty percent of vegetable or fruit juice
by volume.
(d) "Dietary supplement" means any product, other than tobacco,
intended to supplement the diet that:
(i) Contains one or more of the following dietary ingredients:
(A) A vitamin;
(B) A mineral;
(C) An herb or other botanical;
(D) An amino acid;
(E) A dietary substance for use by humans to supplement the diet by
increasing the total dietary intake; or
(F) A concentrate, metabolite, constituent, extract, or combination
of any ingredient described in this subsection;
(ii) Is intended for ingestion in tablet, capsule, powder, softgel,
gelcap, or liquid form, or if not intended for ingestion in such form,
is not represented as conventional food and is not represented for use
as a sole item of a meal or of the diet; and
(iii) Is required to be labeled as a dietary supplement,
identifiable by the "supplement facts" box found on the label as
required pursuant to 21 C.F.R. Sec. 101.36, as amended or renumbered as
of January 1, 2003.
(3) Notwithstanding anything in this section to the contrary, the
exemption of "food and food ingredients" provided in this section shall
apply to food and food ingredients that are furnished, prepared, or
served as meals:
(a) Under a state administered nutrition program for the aged as
provided for in the Older Americans Act (P.L. 95-478 Title III) and RCW
74.38.040(6); ((or))
(b) That are provided to senior citizens, ((disabled persons))
individuals with disabilities, or low-income persons by a not-for-profit organization organized under chapter 24.03 or 24.12 RCW; or
(c) That are provided to residents, sixty-two years of age or
older, of a qualified low-income senior housing facility by the lessor
or operator of the facility. The sale of a meal that is billed to both
spouses of a marital community or both domestic partners of a domestic
partnership meets the age requirement in this subsection (3)(c) if at
least one of the spouses or domestic partners is at least sixty-two
years of age. For purposes of this subsection, "qualified low-income
senior housing facility" means a facility:
(i) That meets the definition of a qualified low-income housing
project under Title 26 U.S.C. Sec. 42 of the federal internal revenue
code, as existing on the effective date of this act;
(ii) That has been partially funded under Title 42 U.S.C. Sec. 1485
of the federal internal revenue code; and
(iii) For which the lessor or operator has at any time been
entitled to claim a federal income tax credit under Title 26 U.S.C.
Sec. 42 of the federal internal revenue code.
(4)(a) Subsection (1) of this section notwithstanding, the retail
sale of food and food ingredients is subject to sales tax under RCW
82.08.020 if the food and food ingredients are sold through a vending
machine, and in this case the selling price for purposes of RCW
82.08.020 is fifty-seven percent of the gross receipts.
(b) This subsection (4) does not apply to hot prepared food and
food ingredients, other than food and food ingredients which are heated
after they have been dispensed from the vending machine.
(c) For tax collected under this subsection (4), the requirements
that the tax be collected from the buyer and that the amount of tax be
stated as a separate item are waived.
Sec. 3 RCW 82.08.195 and 2007 c 6 s 1402 are each amended to read
as follows:
(1) Except as provided in subsection (6) of this section, a bundled
transaction is subject to the tax imposed by RCW 82.08.020 if the
retail sale of any of its component products would be subject to the
tax imposed by RCW 82.08.020.
(2) The transactions described in RCW 82.08.190(4) (a) and (b) are
subject to the tax imposed by RCW 82.08.020 if the service that is the
true object of the transaction is subject to the tax imposed by RCW
82.08.020. If the service that is the true object of the transaction
is not subject to the tax imposed by RCW 82.08.020, the transaction is
not subject to the tax imposed by RCW 82.08.020.
(3) The transaction described in RCW 82.08.190(4)(c) is not subject
to the tax imposed by RCW 82.08.020.
(4) The transaction described in RCW 82.08.190(4)(d) is not subject
to the tax imposed by RCW 82.08.020.
(5) In the case of a bundled transaction that includes any of the
following: Telecommunications service, ancillary service, internet
access, or audio or video programming service:
(a) If the price is attributable to products that are taxable and
products that are not taxable, the portion of the price attributable to
the nontaxable products are subject to the tax imposed by RCW 82.08.020
unless the seller can identify by reasonable and verifiable standards
the portion from its books and records that are kept in the regular
course of business for other purposes including, but not limited to,
nontax purposes;
(b) If the price is attributable to products that are subject to
tax at different tax rates, the total price is attributable to the
products subject to the tax at the highest tax rate unless the seller
can identify by reasonable and verifiable standards the portion of the
price attributable to the products subject to the tax imposed by RCW
82.08.020 at the lower rate from its books and records that are kept in
the regular course of business for other purposes including, but not
limited to, nontax purposes.
(6) The tax imposed by RCW 82.08.020 does not apply in respect to
a bundled transaction consisting entirely of the sale of services or of
services and prepared food, if the sale is to a resident, sixty-two
years of age or older, of a qualified low-income senior housing
facility by the lessor or operator of the facility. A single bundled
transaction involving both spouses of a marital community or both
domestic partners of a domestic partnership meets the age requirement
in this subsection if at least one of the spouses or domestic partners
is at least sixty-two years of age. For purposes of this subsection,
"qualified low-income senior housing facility" has the same meaning as
in RCW 82.08.0293.
Sec. 4 RCW 82.12.0293 and 2003 c 168 s 303 are each amended to
read as follows:
(1) The provisions of this chapter shall not apply in respect to
the use of food and food ingredients for human consumption. "Food and
food ingredients" has the same meaning as in RCW 82.08.0293.
(2) The exemption of "food and food ingredients" provided for in
subsection (1) of this section shall not apply to prepared food, soft
drinks, or dietary supplements. "Prepared food," "soft drinks," and
"dietary supplements" have the same meanings as in RCW 82.08.0293.
(3) Notwithstanding anything in this section to the contrary, the
exemption of "food and food ingredients" provided in this section shall
apply to food and food ingredients which are furnished, prepared, or
served as meals:
(a) Under a state administered nutrition program for the aged as
provided for in the older americans act (P.L. 95-478 Title III) and RCW
74.38.040(6); ((or))
(b) Which are provided to senior citizens, ((disabled persons))
individuals with disabilities, or low-income persons by a not-for-profit organization organized under chapter 24.03 or 24.12 RCW; or
(c) That are provided to residents, sixty-two years of age or
older, of a qualified low-income senior housing facility by the lessor
or operator of the facility. The sale of a meal that is billed to both
spouses of a marital community or both domestic partners of a domestic
partnership meets the age requirement in this subsection (3)(c) if at
least one of the spouses or domestic partners is at least sixty-two
years of age. For purposes of this subsection, "qualified low-income
senior housing facility" has the same meaning as in RCW 82.08.0293.
Sec. 5 RCW 82.12.195 and 2007 c 6 s 1403 are each amended to read
as follows:
(1) Except as provided in subsection (5) of this section, the use
of each product acquired in a bundled transaction is subject to the tax
imposed by RCW 82.12.020 if the use of any of its component products is
subject to the tax imposed by RCW 82.12.020.
(2) The use of each product acquired in a transaction described in
RCW 82.08.190(4) (a) or (b) is subject to the tax imposed by RCW
82.12.020 if the service that is the true object of the transaction is
subject to the tax imposed by RCW 82.12.020. If the service that is
the true object of the transaction is not subject to the tax imposed by
RCW 82.12.020, the use of each product acquired in the transaction is
not subject to the tax imposed by RCW 82.12.020.
(3) The use of each product acquired in a transaction described in
RCW 82.08.190(4)(c) is not subject to the tax imposed by RCW 82.12.020.
(4) The use of each product in a transaction described in RCW
82.08.190(4)(d) is not subject to the tax imposed by RCW 82.12.020.
(5) The tax imposed by RCW 82.12.020 does not apply in respect to
the use of each product acquired in a bundled transaction consisting
entirely of the sale of services or of services and prepared food, if
the products are provided to a resident, sixty-two years of age or
older, of a qualified low-income senior housing facility by the lessor
or operator of the facility. A single bundled transaction involving
both spouses of a marital community or both domestic partners of a
domestic partnership meets the age requirement in this subsection if at
least one of the spouses or domestic partners is at least sixty-two
years of age. For purposes of this subsection, "qualified low-income
senior housing facility" has the same meaning as in RCW 82.08.0293.
(6) The definitions in RCW 82.08.190 apply to this section.
NEW SECTION. Sec. 6 This act takes effect August 1, 2009.