BILL REQ. #: H-1370.1
State of Washington | 62nd Legislature | 2011 Regular Session |
Read first time 02/10/11. Referred to Committee on Ways & Means.
AN ACT Relating to tax incentives for certain segments of the aerospace industry; amending RCW 82.04.260, 82.04.4461, 82.04.4463, and 82.08.975; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 82.04.260 and 2011 c 2 s 203 (Initiative Measure No.
1107) are each amended to read as follows:
(1) Upon every person engaging within this state in the business of
manufacturing:
(a) Wheat into flour, barley into pearl barley, soybeans into
soybean oil, canola into canola oil, canola meal, or canola by-products, or sunflower seeds into sunflower oil; as to such persons the
amount of tax with respect to such business is equal to the value of
the flour, pearl barley, oil, canola meal, or canola by-product
manufactured, multiplied by the rate of 0.138 percent;
(b) Beginning July 1, 2012, seafood products that remain in a raw,
raw frozen, or raw salted state at the completion of the manufacturing
by that person; or selling manufactured seafood products that remain in
a raw, raw frozen, or raw salted state at the completion of the
manufacturing, to purchasers who transport in the ordinary course of
business the goods out of this state; as to such persons the amount of
tax with respect to such business is equal to the value of the products
manufactured or the gross proceeds derived from such sales, multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(c) Beginning July 1, 2012, dairy products that as of September 20,
2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135,
including by-products from the manufacturing of the dairy products such
as whey and casein; or selling the same to purchasers who transport in
the ordinary course of business the goods out of state; as to such
persons the tax imposed is equal to the value of the products
manufactured or the gross proceeds derived from such sales multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(d) Beginning July 1, 2012, fruits or vegetables by canning,
preserving, freezing, processing, or dehydrating fresh fruits or
vegetables, or selling at wholesale fruits or vegetables manufactured
by the seller by canning, preserving, freezing, processing, or
dehydrating fresh fruits or vegetables and sold to purchasers who
transport in the ordinary course of business the goods out of this
state; as to such persons the amount of tax with respect to such
business is equal to the value of the products manufactured or the
gross proceeds derived from such sales multiplied by the rate of 0.138
percent. Sellers must keep and preserve records for the period
required by RCW 82.32.070 establishing that the goods were transported
by the purchaser in the ordinary course of business out of this state;
(e) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel
feedstock, as those terms are defined in RCW 82.29A.135; as to such
persons the amount of tax with respect to the business is equal to the
value of alcohol fuel, biodiesel fuel, or biodiesel feedstock
manufactured, multiplied by the rate of 0.138 percent; and
(f) Wood biomass fuel as defined in RCW 82.29A.135; as to such
persons the amount of tax with respect to the business is equal to the
value of wood biomass fuel manufactured, multiplied by the rate of
0.138 percent.
(2) Upon every person engaging within this state in the business of
splitting or processing dried peas; as to such persons the amount of
tax with respect to such business is equal to the value of the peas
split or processed, multiplied by the rate of 0.138 percent.
(3) Upon every nonprofit corporation and nonprofit association
engaging within this state in research and development, as to such
corporations and associations, the amount of tax with respect to such
activities is equal to the gross income derived from such activities
multiplied by the rate of 0.484 percent.
(4) Upon every person engaging within this state in the business of
slaughtering, breaking and/or processing perishable meat products
and/or selling the same at wholesale only and not at retail; as to such
persons the tax imposed is equal to the gross proceeds derived from
such sales multiplied by the rate of 0.138 percent.
(5) Upon every person engaging within this state in the business of
acting as a travel agent or tour operator; as to such persons the
amount of the tax with respect to such activities is equal to the gross
income derived from such activities multiplied by the rate of 0.275
percent.
(6) Upon every person engaging within this state in business as an
international steamship agent, international customs house broker,
international freight forwarder, vessel and/or cargo charter broker in
foreign commerce, and/or international air cargo agent; as to such
persons the amount of the tax with respect to only international
activities is equal to the gross income derived from such activities
multiplied by the rate of 0.275 percent.
(7) Upon every person engaging within this state in the business of
stevedoring and associated activities pertinent to the movement of
goods and commodities in waterborne interstate or foreign commerce; as
to such persons the amount of tax with respect to such business is
equal to the gross proceeds derived from such activities multiplied by
the rate of 0.275 percent. Persons subject to taxation under this
subsection are exempt from payment of taxes imposed by chapter 82.16
RCW for that portion of their business subject to taxation under this
subsection. Stevedoring and associated activities pertinent to the
conduct of goods and commodities in waterborne interstate or foreign
commerce are defined as all activities of a labor, service or
transportation nature whereby cargo may be loaded or unloaded to or
from vessels or barges, passing over, onto or under a wharf, pier, or
similar structure; cargo may be moved to a warehouse or similar holding
or storage yard or area to await further movement in import or export
or may move to a consolidation freight station and be stuffed,
unstuffed, containerized, separated or otherwise segregated or
aggregated for delivery or loaded on any mode of transportation for
delivery to its consignee. Specific activities included in this
definition are: Wharfage, handling, loading, unloading, moving of
cargo to a convenient place of delivery to the consignee or a
convenient place for further movement to export mode; documentation
services in connection with the receipt, delivery, checking, care,
custody and control of cargo required in the transfer of cargo;
imported automobile handling prior to delivery to consignee; terminal
stevedoring and incidental vessel services, including but not limited
to plugging and unplugging refrigerator service to containers,
trailers, and other refrigerated cargo receptacles, and securing ship
hatch covers.
(8) Upon every person engaging within this state in the business of
disposing of low-level waste, as defined in RCW 43.145.010; as to such
persons the amount of the tax with respect to such business is equal to
the gross income of the business, excluding any fees imposed under
chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
If the gross income of the taxpayer is attributable to activities
both within and without this state, the gross income attributable to
this state must be determined in accordance with the methods of
apportionment required under RCW 82.04.460.
(9) Upon every person engaging within this state as an insurance
producer or title insurance agent licensed under chapter 48.17 RCW or
a surplus line broker licensed under chapter 48.15 RCW; as to such
persons, the amount of the tax with respect to such licensed activities
is equal to the gross income of such business multiplied by the rate of
0.484 percent.
(10) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a
nonprofit corporation or by the state or any of its political
subdivisions, as to such persons, the amount of tax with respect to
such activities is equal to the gross income of the business multiplied
by the rate of 0.75 percent through June 30, 1995, and 1.5 percent
thereafter.
(11)(a) Beginning October 1, 2005, upon every person engaging
within this state in the business of manufacturing commercial
airplanes, or components of such airplanes, or making sales, at retail
or wholesale, of commercial airplanes or components of such airplanes,
manufactured by the seller, as to such persons the amount of tax with
respect to such business is, in the case of manufacturers, equal to the
value of the product manufactured and the gross proceeds of sales of
the product manufactured, or in the case of processors for hire, equal
to the gross income of the business, multiplied by the rate of:
(i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
(ii) 0.2904 percent beginning July 1, 2007.
(b)(i) Beginning July 1, 2008, upon every person who is not
eligible to report under the provisions of (a) of this subsection (11)
and is engaging within this state in the business of manufacturing
tooling specifically designed for use in manufacturing commercial
airplanes or components of such airplanes, or making sales, at retail
or wholesale, of such tooling manufactured by the seller, as to such
persons the amount of tax with respect to such business is, in the case
of manufacturers, equal to the value of the product manufactured and
the gross proceeds of sales of the product manufactured, or in the case
of processors for hire, be equal to the gross income of the business,
multiplied by the rate of 0.2904 percent.
(((c))) (ii) Beginning July 1, 2012, upon every person who is not
eligible to report under the provisions of (a) of this subsection (11)
and is engaging within this state in the business of manufacturing
tooling specifically designed for use in manufacturing unmanned aerial
vehicles or components of unmanned aerial vehicles, or making sales, at
retail or wholesale, of such tooling manufactured by the seller, as to
such persons the amount of tax with respect to such business is, in the
case of manufacturers, equal to the value of the product manufactured
and the gross proceeds of sales of the product manufactured, or in the
case of processors for hire, equal to the gross income of the business,
multiplied by the rate of 0.2904 percent.
(c) Beginning July 1, 2012, upon every person engaging within this
state in the business of manufacturing unmanned aerial vehicles or
components of unmanned aerial vehicles, or making sales, at retail or
wholesale, of unmanned aerial vehicles or components of unmanned aerial
vehicles manufactured by the seller, as to such persons the amount of
tax with respect to such business is, in the case of manufacturers,
equal to the value of the product manufactured and the gross proceeds
of sales of the product manufactured, or in the case of processors for
hire, equal to the gross income of the business, multiplied by the rate
of 0.2904 percent.
(d) For the purposes of this subsection (11), the following
definitions apply:
(i) "Commercial airplane" ((and "component" have)) has the same
meaning((s)) as provided in RCW 82.32.550.
(((d))) (ii) "Component" has the same meaning as provided in RCW
82.32.550 when used with respect to commercial airplanes.
(iii) "Components of unmanned aerial vehicles" means any tangible
personal property that is attached to and becomes an integral part of
the unmanned aerial vehicle. The term includes such items as engines,
engine and body parts, batteries, paint, and tires.
(iv) "Unmanned aerial vehicle" means a reusable, uncrewed vehicle
capable of controlled, sustained, level flight and powered by a jet or
reciprocating engine.
(e) In addition to all other requirements under this title, a
person reporting under the tax rate provided in this subsection (11)
must file a complete annual report with the department under RCW
82.32.534.
(((e))) (f) This subsection (11) does not apply on and after July
1, 2024.
(12)(a) Until July 1, 2024, upon every person engaging within this
state in the business of extracting timber or extracting for hire
timber; as to such persons the amount of tax with respect to the
business is, in the case of extractors, equal to the value of products,
including by-products, extracted, or in the case of extractors for
hire, equal to the gross income of the business, multiplied by the rate
of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904
percent from July 1, 2007, through June 30, 2024.
(b) Until July 1, 2024, upon every person engaging within this
state in the business of manufacturing or processing for hire: (i)
Timber into timber products or wood products; or (ii) timber products
into other timber products or wood products; as to such persons the
amount of the tax with respect to the business is, in the case of
manufacturers, equal to the value of products, including by-products,
manufactured, or in the case of processors for hire, equal to the gross
income of the business, multiplied by the rate of 0.4235 percent from
July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1,
2007, through June 30, 2024.
(c) Until July 1, 2024, upon every person engaging within this
state in the business of selling at wholesale: (i) Timber extracted by
that person; (ii) timber products manufactured by that person from
timber or other timber products; or (iii) wood products manufactured by
that person from timber or timber products; as to such persons the
amount of the tax with respect to the business is equal to the gross
proceeds of sales of the timber, timber products, or wood products
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(d) Until July 1, 2024, upon every person engaging within this
state in the business of selling standing timber; as to such persons
the amount of the tax with respect to the business is equal to the
gross income of the business multiplied by the rate of 0.2904 percent.
For purposes of this subsection (12)(d), "selling standing timber"
means the sale of timber apart from the land, where the buyer is
required to sever the timber within thirty months from the date of the
original contract, regardless of the method of payment for the timber
and whether title to the timber transfers before, upon, or after
severance.
(e) For purposes of this subsection, the following definitions
apply:
(i) "Biocomposite surface products" means surface material products
containing, by weight or volume, more than fifty percent recycled paper
and that also use nonpetroleum-based phenolic resin as a bonding agent.
(ii) "Paper and paper products" means products made of interwoven
cellulosic fibers held together largely by hydrogen bonding. "Paper
and paper products" includes newsprint; office, printing, fine, and
pressure-sensitive papers; paper napkins, towels, and toilet tissue;
kraft bag, construction, and other kraft industrial papers; paperboard,
liquid packaging containers, containerboard, corrugated, and solid-
fiber containers including linerboard and corrugated medium; and
related types of cellulosic products containing primarily, by weight or
volume, cellulosic materials. "Paper and paper products" does not
include books, newspapers, magazines, periodicals, and other printed
publications, advertising materials, calendars, and similar types of
printed materials.
(iii) "Recycled paper" means paper and paper products having fifty
percent or more of their fiber content that comes from postconsumer
waste. For purposes of this subsection (12)(e)(iii), "postconsumer
waste" means a finished material that would normally be disposed of as
solid waste, having completed its life cycle as a consumer item.
(iv) "Timber" means forest trees, standing or down, on privately or
publicly owned land. "Timber" does not include Christmas trees that
are cultivated by agricultural methods or short-rotation hardwoods as
defined in RCW 84.33.035.
(v) "Timber products" means:
(A) Logs, wood chips, sawdust, wood waste, and similar products
obtained wholly from the processing of timber, short-rotation hardwoods
as defined in RCW 84.33.035, or both;
(B) Pulp, including market pulp and pulp derived from recovered
paper or paper products; and
(C) Recycled paper, but only when used in the manufacture of
biocomposite surface products.
(vi) "Wood products" means paper and paper products; dimensional
lumber; engineered wood products such as particleboard, oriented strand
board, medium density fiberboard, and plywood; wood doors; wood
windows; and biocomposite surface products.
(f) Except for small harvesters as defined in RCW 84.33.035, a
person reporting under the tax rate provided in this subsection (12)
must file a complete annual survey with the department under RCW
82.32.585.
(13) Upon every person engaging within this state in inspecting,
testing, labeling, and storing canned salmon owned by another person,
as to such persons, the amount of tax with respect to such activities
is equal to the gross income derived from such activities multiplied by
the rate of 0.484 percent.
(14)(a) Upon every person engaging within this state in the
business of printing a newspaper, publishing a newspaper, or both, the
amount of tax on such business is equal to the gross income of the
business multiplied by the rate of 0.2904 percent.
(b) A person reporting under the tax rate provided in this
subsection (14) must file a complete annual report with the department
under RCW 82.32.534.
Sec. 2 RCW 82.04.4461 and 2010 c 114 s 115 are each amended to
read as follows:
(1)(((a)(i))) In computing the tax imposed under this chapter, a
credit is allowed for each person for qualified aerospace product
development. ((For a person who is a manufacturer or processor for
hire of commercial airplanes or components of such airplanes,)) The
credit is equal to the amount of qualified aerospace product
development expenditures of a person, multiplied by the rate of 1.5
percent.
(2)(a)(i) Credit may be earned for expenditures occurring after
December 1, 2003, and related to the development of commercial
airplanes or components of such airplanes by manufacturers or
processors for hire. ((For all other persons,))
(ii) Credit may be earned ((only)) for expenditures occurring after
June 30, 2008, related to the development of any or all of the
following aerospace products:
(A) Commercial airplanes or components of such airplanes by persons
not eligible for the credit under (a)(i) of this subsection (2);
(B) Tooling specifically designed for use in manufacturing
commercial airplanes or their components; and
(C) Machinery and equipment that is designed for use, by federal
aviation regulation part 145 certificated repair stations, primarily
for the maintenance, repair, overhaul, or refurbishing of commercial
airplanes or their components.
(iii) Credit may be earned for expenditures occurring after July 1,
2011, related to the development of any or all of the following
aerospace products:
(A) Unmanned aerial vehicles or components of unmanned aerial
vehicles;
(B) Tooling specifically designed for use in manufacturing unmanned
aerial vehicles or components of unmanned aerial vehicles; and
(C) Machinery and equipment that is designed for use, by federal
aviation regulation part 145 certificated repair stations, primarily
for the maintenance, repair, overhaul, or refurbishing of unmanned
aerial vehicles or components of unmanned aerial vehicles.
(((ii))) (b) For purposes of this subsection, the following
definitions apply:
(i) "Commercial airplane" ((and "component" have)) has the same
meaning((s)) as provided in RCW 82.32.550.
(((b))) (ii) "Component" has the same meaning as provided in RCW
82.32.550 when used with respect to commercial airplanes.
(iii) "Unmanned aerial vehicle" and "components of unmanned aerial
vehicles" have the same meanings as in RCW 82.04.260.
(3) Before July 1, 2005, any credits earned under this section must
be accrued and carried forward and may not be used until July 1, 2005.
These carryover credits may be used at any time thereafter, and may be
carried over until used. Refunds may not be granted in the place of a
credit.
(((2) The credit is equal to the amount of qualified aerospace
product development expenditures of a person, multiplied by the rate of
1.5 percent.)) (4) Except as provided in subsection ((
(3)(1)(b))) (3) of this
section the credit must be claimed against taxes due for the same
calendar year in which the qualified aerospace product development
expenditures are incurred. Credit earned on or after July 1, 2005, may
not be carried over. The credit for each calendar year may not exceed
the amount of tax otherwise due under this chapter for the calendar
year. Refunds may not be granted in the place of a credit.
(((4))) (5) Any person claiming the credit must file a form
prescribed by the department that must include the amount of the credit
claimed, an estimate of the anticipated aerospace product development
expenditures during the calendar year for which the credit is claimed,
an estimate of the taxable amount during the calendar year for which
the credit is claimed, and such additional information as the
department may prescribe.
(((5))) (6) The definitions in this subsection apply throughout
this section.
(a) "Aerospace product" has the meaning given in RCW 82.08.975.
(b) "Aerospace product development" means research, design, and
engineering activities performed in relation to the development of an
aerospace product or of a product line, model, or model derivative of
an aerospace product, including prototype development, testing, and
certification. The term includes the discovery of technological
information, the translating of technological information into new or
improved products, processes, techniques, formulas, or inventions, and
the adaptation of existing products and models into new products or new
models, or derivatives of products or models. The term does not
include manufacturing activities or other production-oriented
activities, however the term does include tool design and engineering
design for the manufacturing process. The term does not include
surveys and studies, social science and humanities research, market
research or testing, quality control, sale promotion and service,
computer software developed for internal use, and research in areas
such as improved style, taste, and seasonal design.
(c) "Qualified aerospace product development" means aerospace
product development performed within this state.
(d) "Qualified aerospace product development expenditures" means
operating expenses, including wages, compensation of a proprietor or a
partner in a partnership as determined by the department, benefits,
supplies, and computer expenses, directly incurred in qualified
aerospace product development by a person claiming the credit provided
in this section. The term does not include amounts paid to a person or
to the state and any of its departments and institutions, other than a
public educational or research institution to conduct qualified
aerospace product development. The term does not include capital costs
and overhead, such as expenses for land, structures, or depreciable
property.
(e) "Taxable amount" means the taxable amount subject to the tax
imposed in this chapter required to be reported on the person's tax
returns during the year in which the credit is claimed, less any
taxable amount for which a credit is allowed under RCW 82.04.440.
(((6))) (7) In addition to all other requirements under this title,
a person claiming the credit under this section must file a complete
annual report with the department under RCW 82.32.534.
(((7))) (8) Credit may not be claimed for expenditures for which a
credit is claimed under RCW 82.04.4452.
(((8))) (9) This section expires July 1, 2024.
Sec. 3 RCW 82.04.4463 and 2010 1st sp.s. c 23 s 515 are each
amended to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for property taxes and leasehold excise taxes paid during the
calendar year.
(2) The credit is equal to:
(a)(i)(A) Property taxes paid on buildings, and land upon which the
buildings are located, constructed after December 1, 2003, and used
exclusively in manufacturing commercial airplanes or components of such
airplanes; and
(B) Leasehold excise taxes paid with respect to buildings
constructed after January 1, 2006, the land upon which the buildings
are located, or both, if the buildings are used exclusively in
manufacturing commercial airplanes or components of such airplanes; and
(C) Property taxes or leasehold excise taxes paid on, or with
respect to, buildings constructed after June 30, 2008, the land upon
which the buildings are located, or both, and used exclusively for
aerospace product development of aerospace products described in RCW
82.04.4461(2)(a) (i) or (ii), manufacturing tooling specifically
designed for use in manufacturing commercial airplanes or their
components, or in providing aerospace services in respect to commercial
airplanes or their components, by persons not within the scope of
(a)(i)(A) and (B) of this subsection (2) and are taxable under RCW
82.04.290(3), 82.04.260(((10))) (11)(b)(i), or 82.04.250(3); ((or)) and
(D) Property taxes or leasehold excise taxes paid on, or with
respect to, buildings constructed after June 30, 2011, the land upon
which the buildings are located, or both, and used exclusively for
aerospace product development of aerospace products described in RCW
82.04.4461(2)(a)(iii), manufacturing unmanned aerial vehicles or
components of unmanned aerial vehicles, or in providing aerospace
services in respect to unmanned aerial vehicles or components of
unmanned aerial vehicles, by persons not within the scope of (a)(i)(A),
(B), and (C) of this subsection (2) and are taxable under RCW
82.04.290(3), 82.04.260(11) (b)(ii) or (c), or 82.04.250(3);
(ii) Property taxes attributable to an increase in assessed value
due to the renovation or expansion, after:
(A) December 1, 2003, of ((a)) buildings used exclusively in
manufacturing commercial airplanes or components of such airplanes;
((and))
(B) June 30, 2008, of buildings used exclusively for aerospace
product development of aerospace products described in RCW
82.04.4461(2)(a)(ii), manufacturing tooling specifically designed for
use in manufacturing commercial airplanes or their components, or in
providing aerospace services in respect to commercial airplanes or
their components, by persons not within the scope of (a)(ii)(A) of this
subsection (2) and are taxable under RCW 82.04.290(3),
82.04.260(((10))) (11)(b)(i), or 82.04.250(3); and
(C) June 30, 2011, of buildings used exclusively for aerospace
product development of aerospace products described in RCW
82.04.4461(2)(a)(iii), manufacturing unmanned aerial vehicles or
components of unmanned aerial vehicles, or in providing aerospace
services in respect to unmanned aerial vehicles or components of
unmanned aerial vehicles, by persons not within the scope of (a)(ii)(A)
and (B) of this subsection (2) and are taxable under RCW 82.04.290(3),
82.04.260(11) (b)(ii) or (c), or 82.04.250(3); and
(b) An amount equal to:
(i)(A) Property taxes paid, by persons taxable under RCW
82.04.260(((10))) (11)(a), on machinery and equipment exempt under RCW
82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
(B) Property taxes paid, by persons taxable under RCW
82.04.260(((10))) (11)(b)(i), on machinery and equipment exempt under
RCW 82.08.02565 or 82.12.02565 and acquired after June 30, 2008; ((or))
(C) Property taxes paid, by persons taxable under RCW 82.04.250(3)
or 82.04.290(3), on computer hardware, computer peripherals, and
software exempt under RCW 82.08.975 or 82.12.975 ((and)), acquired
after June 30, 2008, and used in providing aerospace services or
aerospace product development related to any or all of the aerospace
products described in RCW 82.04.4461(2)(a) (i) or (ii);
(D) Property taxes paid, by persons taxable under RCW 82.04.260(11)
(b)(ii) or (c), on machinery and equipment exempt under RCW 82.08.02565
or 82.12.02565 and acquired after June 30, 2011; or
(E) Property taxes paid, by persons taxable under RCW 82.04.250(3)
or 82.04.290(3), on computer hardware, computer peripherals, and
software exempt under RCW 82.08.975 or 82.12.975, acquired after June
30, 2011, and used in providing aerospace services or aerospace product
development related to any or all of the aerospace products described
in RCW 82.04.4461(2)(a)(iii).
(ii) For purposes of determining the amount eligible for credit
under (i)(A) ((and)), (B), and (D) of this subsection (2)(b), the
amount of property taxes paid is multiplied by a fraction.
(A) The numerator of the fraction is the total taxable amount
subject to the tax imposed under RCW 82.04.260(((10))) (11) (a) ((or)),
(b), or (c) on the applicable business activities of manufacturing
commercial airplanes, components of such airplanes, unmanned aerial
vehicles, components of unmanned aerial vehicles, or tooling
specifically designed for use in the manufacturing of commercial
airplanes ((or)), components of such airplanes, unmanned aerial
vehicles, components of unmanned aerial vehicles.
(B) The denominator of the fraction is the total taxable amount
subject to the tax imposed under all manufacturing classifications in
chapter 82.04 RCW.
(C) For purposes of both the numerator and denominator of the
fraction, the total taxable amount refers to the total taxable amount
required to be reported on the person's returns for the calendar year
before the calendar year in which the credit under this section is
earned. The department may provide for an alternative method for
calculating the numerator in cases where the tax rate provided in RCW
82.04.260(((10))) (11) for manufacturing was not in effect during the
full calendar year before the calendar year in which the credit under
this section is earned.
(D) No credit is available under (b)(i)(A) ((or)), (B), or (D) of
this subsection (2) if either the numerator or the denominator of the
fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
(E) As used in (b)(ii)(C) of this subsection (2), "returns" means
the tax returns for which the tax imposed under this chapter is
reported to the department.
(3) The definitions in this subsection apply throughout this
section, unless the context clearly indicates otherwise.
(a) "Aerospace product development" has the same meaning as
provided in RCW 82.04.4461.
(b) "Aerospace services" has the same meaning given in RCW
82.08.975.
(c) "Commercial airplane" ((and "component" have)) has the same
meaning((s)) as provided in RCW 82.32.550.
(d) "Component" has the same meaning as provided in RCW 82.32.550
when used with respect to commercial airplanes.
(e) "Unmanned aerial vehicles" and "components of unmanned aerial
vehicles" have the same meanings as in RCW 82.04.260.
(4) A credit earned during one calendar year may be carried over to
be credited against taxes incurred in a subsequent calendar year, but
may not be carried over a second year. No refunds may be granted for
credits under this section.
(5) In addition to all other requirements under this title, a
person claiming the credit under this section must file a complete
annual report with the department under RCW 82.32.534.
(6) This section expires July 1, 2024.
Sec. 4 RCW 82.08.975 and 2008 c 81 s 2 are each amended to read
as follows:
(1) The tax levied by RCW 82.08.020 ((shall)) does not apply to
sales of computer hardware, computer peripherals, or software, not
otherwise eligible for exemption under RCW 82.08.02565, used primarily
in the development, design, and engineering of aerospace products or in
providing aerospace services, or to sales of or charges made for labor
and services rendered in respect to installing the computer hardware,
computer peripherals, or software.
(2) The exemption is available only when the buyer provides the
seller with an exemption certificate in a form and manner prescribed by
the department. The seller ((shall)) must retain a copy of the
certificate for the seller's files.
(3) As used in this section, the following definitions apply:
(a) "Aerospace products" means:
(i) Commercial airplanes and their components;
(ii) Unmanned aerial vehicles and components of unmanned aerial
vehicles;
(iii) Machinery and equipment that is designed and used primarily
for the maintenance, repair, overhaul, or refurbishing of commercial
airplanes or their components or unmanned aerial vehicles or components
of unmanned aerial vehicles, by federal aviation regulation part 145
certificated repair stations; and
(((iii))) (iv) Tooling specifically designed for use in
manufacturing commercial airplanes or their components or unmanned
aerial vehicles or components of unmanned aerial vehicles.
(b) "Aerospace services" means the maintenance, repair, overhaul,
or refurbishing of commercial airplanes or their components or unmanned
aerial vehicles or components of unmanned aerial vehicles, but only
when such services are performed by a FAR part 145 certificated repair
station.
(c) "Commercial airplane" ((and "component" have)) has the same
meaning((s)) provided in RCW 82.32.550.
(d) "Component" has the same meaning as provided in RCW 82.32.550
when used with respect to commercial airplanes.
(e) "Peripherals" includes keyboards, monitors, mouse devices, and
other accessories that operate outside of the computer, excluding
cables, conduit, wiring, and other similar property.
(f) "Unmanned aerial vehicles" and "components of unmanned aerial
vehicles" have the same meanings provided in RCW 82.04.260.
(4) This section expires July 1, 2024.
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, 2011.