BILL REQ. #:  S-3993.1 

Read first time 01/20/10.   Referred to Committee on Ways & Means.

     AN ACT Relating to creating and paying for business and occupation tax exemptions for new businesses; amending RCW 43.350.070; adding a new section to chapter 82.04 RCW; providing an effective date; and providing an expiration 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) This chapter does not apply to:
     (a) A new business during the first twelve months of operation of the business; or
     (b) A new business during the first twenty-four months of operation of the business if the new business has less than twenty-five employment positions at the time it begins to engage in the normal course of business. During the next twelve months of operation of the business, the business is exempt from fifty percent of taxes due under this chapter.
     (2) As used in this section:
     (a)(i) "New business" means a business that obtained or was required to obtain a registration certificate under RCW 82.32.030 for the first time during the calendar year for which exemption is first claimed under this section.
     (ii) "New business" does not include:
     (A) A business that has been restructured, reorganized, or transferred, unless the majority of the activities to be conducted after the restructuring, reorganization, or transfer are significantly different from the activities previously conducted;
     (B) A new branch location or other facility except by an existing out-of-state entity first doing business in this state;
     (C) A business that is substantially similar to a business currently operated, or operated within the past five years, by the same principals.
     (b) "Employment position" means a full-time, permanent employee of the new business.
     (3)(a) A new business must file an application, in a form and manner required by the department, to qualify for the exemption under this section.
     (b) An application under this section must be filed within one year of the time the business was required to obtain a registration certificate under RCW 82.32.030.
     (c) The time periods in subsection (1) of this section begin when the application is approved.

Sec. 2   RCW 43.350.070 and 2005 c 424 s 8 are each amended to read as follows:
     (1) The life sciences discovery fund is created in the custody of the state treasurer. Only the board or the board's designee may authorize expenditures from the fund. Expenditures from the fund may be made only for purposes of this chapter. Administrative expenses of the authority, including staff support, may be paid only from the fund. Revenues to the fund consist of transfers made by the legislature from strategic contribution payments deposited in the tobacco settlement account under RCW 43.79.480, moneys received pursuant to contribution agreements entered into pursuant to RCW 43.350.030, moneys received from gifts, grants, and bequests, and interest earned on the fund.
     (2) For fiscal years 2011 through 2014, strategic contribution payments deposited in the tobacco settlement account in an amount equal to the amount necessary to offset the cost of the tax exemption in section 1 of this act must be transferred to the state general fund. The amount transferred to the state general fund under this subsection must only be used for the purposes of offsetting the cost of the tax exemption in section 1 of this act.

NEW SECTION.  Sec. 3   This act takes effect July 1, 2010.

NEW SECTION.  Sec. 4   This act expires July 1, 2014.