BILL REQ. #:  S-1440.1 

Read first time 02/09/09.   Referred to Committee on Ways & Means.

     AN ACT Relating to exemption from sales and use tax for tribal administration and programs of any landless Washington state federally recognized Indian tribe; amending RCW 82.14.050 and 82.14.060; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied under RCW 82.08.020 does not apply to any landless Washington state federally recognized Indian tribe in respect to sales for tribal administration or tribal programs. For purposes of this section, "landless" means that the tribe does not have either a reservation or land in the state held in trust by the United States for the benefit of the tribe.
     (2) The exemption under subsection (1) of this section is in the form of a refund.
     (a) A seller must collect the tax imposed under this chapter and any applicable local sales taxes imposed under chapter 82.14 RCW, RCW 81.104.170, or other provision of law on sales subject to the exemption.
     (b) For a refund of exempted taxes paid as required under (a) of this subsection, a buyer must apply to the department according to the form, manner, and frequency prescribed by the department.
     (c) The department must refund directly to the buyer the total amount of state and local sales taxes paid as required under (a) of this subsection from the state portion of taxes collected under this chapter. The department, in its sole discretion, may make refunds under this section on a quarterly or more frequent basis.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to use by any landless Washington state federally recognized Indian tribe for tribal administration or tribal programs. For purposes of this section, "landless" has the same meaning as in section 1 of this act.
     (2)(a) Except as provided in (b) of this subsection, an exemption under this section must be claimed on a return as required in RCW 82.32.045. To claim the exemption, taxpayers must report the amount of exempted use taxes that would otherwise have been due under this chapter, chapter 82.14 RCW, RCW 81.104.170, or other provision of law.
     (b) Taxpayers need not report under (a) of this subsection with respect to sales exempted under section 1 of this act.

Sec. 3   RCW 82.14.050 and 2005 c 336 s 20 are each amended to read as follows:
     (1)(a) The counties, cities, and transportation authorities under RCW 82.14.045, public facilities districts under chapters 36.100 and 35.57 RCW, public transportation benefit areas under RCW 82.14.440, regional transportation investment districts, and transportation benefit districts under chapter 36.73 RCW shall contract, prior to the effective date of a resolution or ordinance imposing a sales and use tax, the administration and collection to the state department of revenue, which shall deduct a percentage amount, as provided by contract, not to exceed two percent of the taxes collected for administration and collection expenses incurred by the department. The remainder of any portion of any tax authorized by this chapter that is collected by the department of revenue shall be deposited by the state department of revenue in the local sales and use tax account hereby created in the state treasury.
     (b) The amount of local use tax liability that is subject to the exemption in and is reported to the department under section 2 of this act must be deposited in the local sales and use tax account from the state portion of taxes collected under chapters 82.08 and 82.12 RCW. For purposes of this subsection (1)(b), "local use tax" means a tax imposed by a local taxing authority under this chapter, RCW 81.104.170, or other provision of law.
     (2) Moneys in the local sales and use tax account may be spent only for distribution to counties, cities, transportation authorities, public facilities districts, public transportation benefit areas, regional transportation investment districts, and transportation benefit districts imposing a sales and use tax.
     (3) All administrative provisions in chapters 82.03, 82.08, 82.12, and 82.32 RCW, as they now exist or may hereafter be amended, shall, insofar as they are applicable to state sales and use taxes, be applicable to taxes imposed pursuant to this chapter. Counties, cities, transportation authorities, public facilities districts, and regional transportation investment districts may not conduct independent sales or use tax audits of sellers registered under the streamlined sales tax agreement.
     (4) Except as provided in RCW 43.08.190, all earnings of investments of balances in the local sales and use tax account shall be credited to the local sales and use tax account and distributed to the counties, cities, transportation authorities, public facilities districts, public transportation benefit areas, regional transportation investment districts, and transportation benefit districts monthly.

Sec. 4   RCW 82.14.060 and 2005 c 336 s 21 are each amended to read as follows:
     (1)(a) Monthly, the state treasurer shall ((make distribution)) distribute from the local sales and use tax account to the counties, cities, transportation authorities, public facilities districts, and transportation benefit districts:
     (i) The amount of tax collected on behalf of each taxing authority, less the deduction provided for in RCW 82.14.050; and
     (ii) The amount, if any, deposited on behalf of each taxing authority as provided in RCW 82.14.050(1)(b).
     (b) The state treasurer shall make the distribution under this section without appropriation.
     (2) In the event that any ordinance or resolution imposes a sales and use tax at a rate in excess of the applicable limits contained herein, such ordinance or resolution shall not be considered void in toto, but only with respect to that portion of the rate which is in excess of the applicable limits contained herein.

NEW SECTION.  Sec. 5   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2009.