BILL REQ. #: H-3529.4
State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 01/20/12. Referred to Committee on Ways & Means.
AN ACT Relating to creating a sales tax holiday for back-to-school clothing and supplies; amending RCW 82.12.040; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that Washington
families pay thousands of dollars in sales and use tax on their
purchases of clothing and school supplies in August before the school
year begins. The legislature further finds that a recent study has
shown that temporarily exempting some of these purchases from sales and
use tax would give Washington families a needed tax break and increase
sales, which in turn would generate new jobs and more state and local
tax revenue. Therefore, it is the legislature's intent to create a
"back-to-school" sales tax holiday.
NEW SECTION. Sec. 2 A new section is added to chapter 82.08 RCW
to read as follows:
(1) Subject to the conditions and limitations provided in this
section, the tax levied by RCW 82.08.020 does not apply to the sale of
the following tangible personal property: (a) Clothing items; and (b)
school supply items.
(2)(a) A clothing item is exempt under this section if the sales
price of the item is less than one hundred dollars.
(b) A school supply item is exempt under this section if the sales
price of the item is less than ten dollars.
(3) The exemption authorized in this section only applies to
purchases made on the third adjacent Friday, Saturday, and Sunday of
August of each year.
(4) Rules adopted by the department for the administration of this
section must be substantially consistent with the streamlined sales and
use tax agreement, as that term is used in chapter 82.58 RCW.
(5) The definitions in this subsection apply throughout this
section.
(a) "Clothing item" means human wearing apparel suitable for
general use.
(i) "Clothing item" includes, but is not limited to, the following:
Shop aprons; athletic supporters; baby receiving blankets; bathing
suits and caps; belts and suspenders; boots; coats and jackets;
diapers, children and adult, including disposable diapers; ear muffs;
footlets; formal wear; gloves and mittens for general use; hats and
caps; hosiery; insoles for shoes; lab coats; neckties; overshoes;
pantyhose; rainwear; sandals; scarves; shoes and shoe laces; slippers;
sneakers; socks and stockings; steel toed shoes; underwear; uniforms;
and athletic and nonathletic apparel.
(ii) "Clothing item" does not include: Belt buckles sold
separately; patches and emblems sold separately; sewing equipment and
supplies including, but not limited to, knitting needles, patterns,
pins, scissors, sewing machines, sewing needles, tape measures, and
thimbles; and sewing materials that become part of "clothing"
including, but not limited to, buttons, fabric, lace, thread, yarn, and
zippers.
(b) "School supply item" means binders; book bags; calculators;
cellophane tape; blackboard chalk; compasses; composition books;
crayons; erasers; folders, expandable, pocket, plastic, and manila;
glue, paste, and paste sticks; highlighters; index cards; index card
boxes; legal pads; lunch boxes; markers; notebooks; paper; loose leaf
ruled notebook paper, copy paper, graph paper, tracing paper, manila
paper, colored paper, poster board, and construction paper; pencil
boxes and other school supply boxes; pencil sharpeners; pencils; pens;
protractors; rulers; scissors; writing tablets; and backpacks, fanny
packs, and diaper bags.
NEW SECTION. Sec. 3 A new section is added to chapter 82.12 RCW
to read as follows:
(1) The provisions of this chapter do not apply to the use of the
following tangible personal property: (a) Clothing items not used
primarily for conducting business; and (b) school supply items not used
primarily for conducting business.
(2) The definitions, conditions, and limitations in section 2 of
this act apply to this section.
(3) For the purposes of this section, "business" has the meaning
provided in RCW 82.04.140 and also includes activities engaged in by a
common school, school district, or educational service district.
Sec. 4 RCW 82.12.040 and 2011 1st sp.s. c 20 s 103 are each
amended to read as follows:
(1) Every person who maintains in this state a place of business or
a stock of goods, or engages in business activities within this state,
shall obtain from the department a certificate of registration, and
shall, at the time of making sales of tangible personal property,
digital goods, digital codes, digital automated services, extended
warranties, or sales of any service defined as a retail sale in RCW
82.04.050 (2) (a) or (g), (3)(a), or (6)(b), or making transfers of
either possession or title, or both, of tangible personal property for
use in this state, collect from the purchasers or transferees the tax
imposed under this chapter. The tax to be collected under this section
must be in an amount equal to the purchase price multiplied by the rate
in effect for the retail sales tax under RCW 82.08.020. For the
purposes of this chapter, the phrase "maintains in this state a place
of business" ((shall)) includes the solicitation of sales and/or taking
of orders by sales agents or traveling representatives. For the
purposes of this chapter, "engages in business activity within this
state" includes every activity which is sufficient under the
Constitution of the United States for this state to require collection
of tax under this chapter. The department must in rules specify
activities which constitute engaging in business activity within this
state, and must keep the rules current with future court
interpretations of the Constitution of the United States.
(2) Every person who engages in this state in the business of
acting as an independent selling agent for persons who do not hold a
valid certificate of registration, and who receives compensation by
reason of sales of tangible personal property, digital goods, digital
codes, digital automated services, extended warranties, or sales of any
service defined as a retail sale in RCW 82.04.050 (2) (a) or (g),
(3)(a), or (6)(b), of his or her principals for use in this state,
must, at the time such sales are made, collect from the purchasers the
tax imposed on the purchase price under this chapter, and for that
purpose is deemed a retailer as defined in this chapter.
(3) The tax required to be collected by this chapter is deemed to
be held in trust by the retailer until paid to the department, and any
retailer who appropriates or converts the tax collected to the
retailer's own use or to any use other than the payment of the tax
provided herein to the extent that the money required to be collected
is not available for payment on the due date as prescribed is guilty of
a misdemeanor. In case any seller fails to collect the tax herein
imposed or having collected the tax, fails to pay the same to the
department in the manner prescribed, whether such failure is the result
of the seller's own acts or the result of acts or conditions beyond the
seller's control, the seller is nevertheless personally liable to the
state for the amount of such tax, unless the seller has taken from the
buyer a copy of a direct pay permit issued under RCW 82.32.087.
(4) Any retailer who refunds, remits, or rebates to a purchaser, or
transferee, either directly or indirectly, and by whatever means, all
or any part of the tax levied by this chapter is guilty of a
misdemeanor.
(5) Notwithstanding subsections (1) through (4) of this section,
any person making sales is not obligated to collect the tax imposed by
this chapter if:
(a) The person's activities in this state, whether conducted
directly or through another person, are limited to:
(i) The storage, dissemination, or display of advertising;
(ii) The taking of orders; or
(iii) The processing of payments; and
(b) The activities are conducted electronically via a web site on
a server or other computer equipment located in Washington that is not
owned or operated by the person making sales into this state nor owned
or operated by an affiliated person. "Affiliated persons" has the same
meaning as provided in RCW 82.04.424.
(6) Subsection (5) of this section expires when: (a) The United
States congress grants individual states the authority to impose sales
and use tax collection duties on remote sellers; or (b) it is
determined by a court of competent jurisdiction, in a judgment not
subject to review, that a state can impose sales and use tax collection
duties on remote sellers.
(7) Notwithstanding subsections (1) through (4) of this section,
any person making sales is not obligated to collect the tax imposed by
this chapter if the person would have been obligated to collect retail
sales tax on the sale absent a specific exemption provided in chapter
82.08 RCW, and there is no corresponding use tax exemption in this
chapter. Nothing in this subsection (7) may be construed as relieving
purchasers from liability for reporting and remitting the tax due under
this chapter directly to the department.
(8) Notwithstanding subsections (1) through (4) of this section,
any person making sales is not obligated to collect the tax imposed by
this chapter if the state is prohibited under the Constitution or laws
of the United States from requiring the person to collect the tax
imposed by this chapter.
(9) Notwithstanding subsections (1) through (4) of this section, a
seller is not obligated to collect the tax imposed by this chapter if
the product is exempt from retail sales tax under section 2 of this
act, but is not exempt from use tax under section 3 of this act.
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
May 1, 2012.