BILL REQ. #:  H-4611.1 

READ FIRST TIME 03/06/12.   

     AN ACT Relating to tax expenditure reform to provide transparency and accountability in fiscal matters; amending RCW 82.04.4282, 43.136.045, 82.04.050, 82.04.062, 82.08.010, 82.66.020, 82.04.110, 82.04.120, 82.04.257, 82.04.260, 82.04.280, 82.04.280, 82.04.290, 82.62.020, 82.73.020, 82.04.540, 43.06.400, 43.88.030, 82.32.585, 82.08.820, and 82.12.820; reenacting and amending RCW 82.12.010 and 82.04.250; adding a new section to chapter 43.88 RCW; adding a new section to chapter 82.32 RCW; adding a new section to chapter 43.135 RCW; creating new sections; repealing RCW 82.04.330, 82.04.340, 82.04.370, 82.04.405, 82.04.410, 82.04.4285, 82.04.4287, 82.04.4289, 82.04.4292, 82.04.4293, 82.04.432, 82.04.4332, 82.08.0253, 82.08.0257, 82.08.0259, 82.08.0264, 82.08.0265, 82.08.0266, 82.08.02665, 82.08.0267, 82.08.0268, 82.08.0273, 82.08.0275, 82.12.0257, 82.12.0258, 82.12.0261, 82.12.0262, 82.12.0263, 82.12.0265, 82.12.0266, 82.12.0269, 82.12.0272, 82.04.4282, 82.04.4281, 82.08.0256, 82.12.0345, 82.08.0203, 82.08.02525, 82.08.02535, 82.08.02569, 82.08.02573, 82.08.0271, 82.08.0278, 82.08.0287, 82.08.02875, 82.08.0291, 82.08.031, 82.08.830, 82.08.834, 82.08.870, 82.12.02525, 82.12.02569, 82.12.930, 82.12.0274, 82.12.0279, 82.12.0282, 82.12.02917, 82.12.031, 82.12.834, 82.12.845, 82.12.02595, 82.12.0264, 82.12.0284, 82.08.995, 82.08.999, 82.12.999, 82.08.025651, 82.12.025651, 82.12.995, 82.08.02081, 82.08.02087, 82.08.02565, 82.08.02566, 82.08.02568, 82.08.0267, 82.08.0272, 82.08.0274, 82.08.02745, 82.08.0288, 82.08.0294, 82.08.0296, 82.08.0298, 82.08.0311, 82.08.0315, 82.08.036, 82.08.806, 82.08.807, 82.08.810, 82.08.820, 82.08.855, 82.08.865, 82.08.880, 82.08.890, 82.08.900, 82.08.910, 82.08.920, 82.08.990, 82.12.02081, 82.12.02087, 82.12.02565, 82.12.02566, 82.12.02568, 82.12.0267, 82.12.0268, 82.12.02685, 82.12.0273, 82.12.0283, 82.12.0294, 82.12.0296, 82.12.0298, 82.12.0311, 82.12.0315, 82.12.038, 82.12.806, 82.12.807, 82.12.810, 82.12.820, 82.12.855, 82.12.865, 82.12.880, 82.12.890, 82.12.900, 82.12.910, 82.12.920, 82.12.800, 82.12.801, 82.12.802, 82.12.860, 82.66.040, 82.08.850, 82.12.850, 82.12.02085, 82.08.0282, 82.08.0269, 82.08.0279, 82.08.700, 82.12.700, 82.12.955, 82.08.02537, 82.08.0289, 82.08.832, 82.12.0347, 82.12.832, 82.08.0205, 82.08.02082, 82.08.9995, 82.12.9995, 82.12.0205, 82.12.02082, 82.08.0258, 82.08.02795, 82.08.02805, 82.08.02806, 82.08.02807, 82.08.0283, 82.08.02915, 82.08.0299, 82.08.803, 82.08.804, 82.08.808, 82.08.925, 82.08.935, 82.08.940, 82.08.945, 82.08.997, 82.08.998, 82.12.0259, 82.12.02745, 82.12.02747, 82.12.02748, 82.12.02749, 82.12.0277, 82.12.02915, 82.12.803, 82.12.804, 82.12.808, 82.12.925, 82.12.935, 82.12.940, 82.12.945, 82.12.998, 82.04.339, 82.04.3395, 82.04.363, 82.04.3651, 82.04.367, 82.04.368, 82.04.380, 82.04.385, 82.04.395, 82.04.397, 82.04.399, 82.04.408, 82.04.415, 82.04.418, 82.04.419, 82.04.4201, 82.04.4251, 82.04.4291, 82.04.4322, 82.04.4324, 82.04.4326, 82.04.4327, 82.04.434, 82.04.600, 82.04.615, 82.04.335, 82.04.338, 82.04.4271, 82.04.640, 82.04.4275, 82.04.655, 82.04.4274, 82.04.2907, 82.04.298, 82.04.315, 82.04.317, 82.04.331, 82.04.332, 82.04.333, 82.04.334, 82.04.337, 82.04.392, 82.04.416, 82.04.421, 82.04.422, 82.04.425, 82.04.4261, 82.04.4262, 82.04.4267, 82.04.4294, 82.04.4295, 82.04.4296, 82.04.433, 82.04.4333, 82.04.4339, 82.04.4451, 82.04.447, 82.04.4482, 82.04.4486, 82.04.601, 82.62.030, 82.04.2403, 82.04.424, 82.04.4272, 82.04.43391, 82.04.645, 82.04.650, 82.04.263, 82.04.750, 82.04.627, 82.04.2905, 82.04.272, 82.04.2906, 82.04.2908, 82.04.324, 82.04.326, 82.04.327, 82.04.355, 82.04.4263, 82.04.4264, 82.04.4265, 82.04.4297, 82.04.4311, 82.04.4337, 82.04.620, 82.04.635, and 82.32.534; providing effective dates; providing a contingent effective date; providing a contingent expiration date; and providing for submission of this act to a vote of the people.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that to fund vital community services and to fulfill its role as a financial steward of state tax dollars, the legislature must allow all nonconstitutionally required tax expenditures to periodically expire. The state must also take proactive measures to continue tax preferences that prove beneficial to the state according to objective, rigorous, financially based standards that ensure job creation and economic growth. Requiring all tax preferences to have a periodic expiration date allows those tax preferences that are failing to create jobs or to grow the economy or are otherwise failing to garner widespread support for their continuance, to expire while preserving those that are providing real, demonstrable value for taxpayers and the state. The legislature seeks to be philosophically consistent by requiring all tax preferences, regardless of the size or length of previous existence, to face an expiration date.
     (2) The legislature therefore intends to periodically expire all nonconstitutionally required tax preferences that are not already subject to expiration. The legislature also intends to require corporations that continue to benefit from tax preferences to disclose the value of the tax preferences claimed and to disclose data regarding wages and benefits.

NEW SECTION.  Sec. 101   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2017:
     (1) RCW 82.04.330 (Exemptions -- Sales of agricultural products) and 2001 c 118 s 3, 1993 sp.s. c 25 s 305, 1988 c 253 s 2, & 1987 c 23 s 4;
     (2) RCW 82.04.340 (Exemptions -- Boxing, sparring, or wrestling matches) and 2000 c 103 s 6, 1988 c 19 s 4, & 1961 c 15 s 82.04.340;
     (3) RCW 82.04.370 (Exemptions -- Certain fraternal and beneficiary organizations) and 1961 c 293 s 4 & 1961 c 15 s 82.04.370;
     (4) RCW 82.04.405 (Exemptions -- Credit unions) and 1998 c 311 s 4 & 1970 ex.s. c 101 s 3;
     (5) RCW 82.04.410 (Exemptions -- Hatching eggs and poultry) and 1967 ex.s. c 149 s 15 & 1961 c 15 s 82.04.410;
     (6) RCW 82.04.4285 (Deductions -- Motor vehicle fuel and special fuel taxes) and 1998 c 176 s 3 & 1980 c 37 s 6;
     (7) RCW 82.04.4287 (Deductions -- Compensation for receiving, washing, etc., horticultural products for person exempt under RCW 82.04.330 -- Materials and supplies used) and 1980 c 37 s 8;
     (8) RCW 82.04.4289 (Exemption -- Compensation for patient services or attendant sales of drugs dispensed pursuant to prescription by certain nonprofit organizations) and 2003 c 168 s 402, 1998 c 325 s 1, 1993 c 492 s 305, 1981 c 178 s 2, & 1980 c 37 s 10;
     (9) RCW 82.04.4292 (Deductions -- Interest on investments or loans secured by mortgages or deeds of trust) and 2010 1st sp.s. c 23 s 301 & 1980 c 37 s 12;
     (10) RCW 82.04.4293 (Deductions -- Interest on obligations of the state, its political subdivisions, and municipal corporations) and 1980 c 37 s 13;
     (11) RCW 82.04.432 (Deductions -- Municipal sewer service fees or charges) and 1967 ex.s. c 149 s 17;
     (12) RCW 82.04.4332 (Deductions -- Tuition fees of foreign degree-granting institutions) and 1993 c 181 s 10;
     (13) RCW 82.08.0253 (Exemptions -- Sale and distribution of newspapers) and 2009 c 535 s 506 & 1980 c 37 s 21;
     (14) RCW 82.08.0257 (Exemptions -- Auction sales of personal property used in farming) and 2009 c 535 s 511 & 1980 c 37 s 25;
     (15) RCW 82.08.0259 (Exemptions -- Sales of livestock) and 2001 c 118 s 4 & 1980 c 37 s 27;
     (16) RCW 82.08.0264 (Exemptions -- Sales of motor vehicles, trailers, or campers to nonresidents for use outside the state) and 2010 c 161 s 1165, 2007 c 135 s 1, & 1980 c 37 s 31;
     (17) RCW 82.08.0265 (Exemptions -- Sales to nonresidents of tangible personal property which becomes a component of property of the nonresident by installing, repairing, etc. -- Labor and services for installing, repairing, etc.) and 1980 c 37 s 32;
     (18) RCW 82.08.0266 (Exemptions -- Sales of watercraft to nonresidents for use outside the state) and 1999 c 358 s 5 & 1980 c 37 s 33;
     (19) RCW 82.08.02665 (Exemptions--Sales of watercraft, vessels to residents of foreign countries) and 1999 c 358 s 6 & 1993 c 119 s 1;
     (20) RCW 82.08.0267 (Exemptions -- Sales of poultry for producing poultry and poultry products for sale) and 1980 c 37 s 34;
     (21) RCW 82.08.0268 (Exemptions -- Sales of machinery and implements, and related parts and labor, for farming to nonresidents for use outside the state) and 1998 c 167 s 1 & 1980 c 37 s 35;
     (22) RCW 82.08.0273 (Exemptions -- Sales to nonresidents of tangible personal property, digital goods, and digital codes for use outside the state -- Proof of nonresident status -- Penalties) and 2011 c 7 s 1, 2010 c 106 s 215, 2009 c 535 s 512, 2007 c 135 s 2, 2003 c 53 s 399, 1993 c 444 s 1, 1988 c 96 s 1, 1982 1st ex.s. c 5 s 1, & 1980 c 37 s 39;
     (23) RCW 82.08.0275 (Exemptions -- Sales of and labor and service charges for mining, sorting, crushing, etc., of sand, gravel, and rock from county or city quarry for public road purposes) and 1980 c 37 s 41;
     (24) RCW 82.12.0257 (Exemptions -- Use of personal property of the operating property of a public utility by state or political subdivision) and 2010 c 106 s 220, 2009 c 535 s 611, & 1980 c 37 s 57;
     (25) RCW 82.12.0258 (Exemptions -- Use of personal property previously used in farming and purchased from farmer at auction) and 2009 c 535 s 612 & 1980 c 37 s 58;
     (26) RCW 82.12.0261 (Exemptions -- Use of livestock) and 2001 c 118 s 5 & 1980 c 37 s 60;
     (27) RCW 82.12.0262 (Exemptions -- Use of poultry for producing poultry and poultry products for sale) and 1980 c 37 s 61;
     (28) RCW 82.12.0263 (Exemptions -- Use of fuel by extractor or manufacturer thereof) and 1980 c 37 s 62;
     (29) RCW 82.12.0265 (Exemptions -- Use by bailee of tangible personal property consumed in research, development, etc., activities) and 1980 c 37 s 64;
     (30) RCW 82.12.0266 (Exemptions -- Use by residents of motor vehicles and trailers acquired and used while members of the armed services and stationed outside the state) and 1980 c 37 s 65;
     (31) RCW 82.12.0269 (Exemptions -- Use of sand, gravel, or rock to extent of labor and service charges for mining, sorting, crushing, etc., thereof from county or city quarry for public road purposes) and 1980 c 37 s 68;
     (32) RCW 82.12.0272 (Exemptions -- Use of personal property in single trade shows) and 2009 c 535 s 616 & 1980 c 37 s 70;
     (33) RCW 82.04.4282 (Deductions -- Fees, dues, charges) and 2012 c ... s 102 (section 102 of this act), 2009 c 535 s 410, 1994 c 124 s 3, 1989 c 392 s 1, & 1980 c 37 s 3;
     (34) RCW 82.04.4281 (Deductions -- Investments, dividends, interest on loans) and 2007 c 54 s 9, 2002 c 150 s 2, & 1980 c 37 s 2. Formerly RCW 82.04.430(1);
     (35) RCW 82.08.0256 (Exemptions -- Sale of the operating property of a public utility to the state or a political subdivision) and 2010 c 106 s 213, 2009 c 535 s 509, & 1980 c 37 s 24; and
     (36) RCW 82.12.0345 (Exemptions -- Use of newspapers) and 2009 c 535 s 618 & 1994 c 124 s 11.

Sec. 102   RCW 82.04.4282 and 2009 c 535 s 410 are each amended to read as follows:
     (1) In computing tax there may be deducted from the measure of tax amounts derived from bona fide (((1))) (a) initiation fees, (((2))) (b) dues, (((3))) (c) contributions, (((4))) (d) donations, (((5))) (e) tuition fees, (((6))) (f) charges made by a nonprofit trade or professional organization for attending or occupying space at a trade show, convention, or educational seminar sponsored by the nonprofit trade or professional organization, which trade show, convention, or educational seminar is not open to the general public, (((7))) (g) charges made for operation of privately operated kindergartens, and (((8))) (h) endowment funds.
     (2) This section may not be construed to exempt any person, association, or society from tax liability upon selling tangible personal property, digital goods, digital codes, or digital automated services, or upon providing facilities or other services for which a special charge is made to members or others.
     (3) If dues are in exchange for any significant amount of goods or services rendered by the recipient thereof to members without any additional charge to the member, or if the dues are graduated upon the amount of goods or services rendered, the value of such goods or services ((shall)) are not ((be)) considered as a deduction under this section.
     (4) The deductions under this section applicable to subsections (1)(a) through (d) and (f) through (h) of this section do not apply on or after July 1, 2019.
     (5) The deduction under this section applicable to subsection (1)(e) of this section applies until July 1, 2017.

Sec. 103   RCW 43.136.045 and 2011 c 335 s 2 are each amended to read as follows:
     (1) The citizen commission for performance measurement of tax preferences must develop a schedule to accomplish an orderly review of tax preferences at least once every ten years. In determining the schedule, the commission must consider the order the tax preferences were enacted into law, in addition to other factors including but not limited to grouping preferences for review by type of industry, economic sector, or policy area. The commission may elect to include, anywhere in the schedule, a tax preference that has a statutory expiration date. The commission must omit from the schedule tax preferences that are required by constitutional law((, sales and use tax exemptions for machinery and equipment for manufacturing, research and development, or testing, the small business credit for the business and occupation tax,)) sales and use tax exemptions for food and prescription drugs, property tax relief for retired persons, and property tax valuations based on current use, and may omit any tax preference that the commission determines is a critical part of the structure of the tax system. As an alternative to the process under RCW 43.136.055, the commission may recommend to the joint legislative audit and review committee an expedited review process for any tax preference.
     (2) The commission must revise the schedule as needed each year, taking into account newly enacted or terminated tax preferences. The commission must deliver the schedule to the joint legislative audit and review committee by September 1st of each year.
     (3) The commission must provide a process for effective citizen input during its deliberations.

NEW SECTION.  Sec. 201   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2019:
     (1) RCW 82.08.0203 (Exemptions -- Trail grooming services) and 2008 c 260 s 1;
     (2) RCW 82.08.02525 (Exemptions -- Sale of copied public records by state and local agencies) and 2011 c 60 s 49, 2009 c 535 s 505, & 1996 c 63 s 1;
     (3) RCW 82.08.02535 (Exemptions -- Sales and distribution of magazines or periodicals by subscription for fund-raising) and 2009 c 535 s 507 & 1995 2nd sp.s. c 8 s 1;
     (4) RCW 82.08.02569 (Exemptions -- Sales of tangible personal property related to a building or structure that is an integral part of a laser interferometer gravitational wave observatory) and 1996 c 113 s 1;
     (5) RCW 82.08.02573 (Exemptions -- Sales by a nonprofit organization for fund-raising activities) and 2010 c 106 s 214 & 1998 c 336 s 3;
     (6) RCW 82.08.0271 (Exemptions -- Sales to municipal corporations, the state, and political subdivisions of tangible personal property, labor and services on watershed protection and flood prevention contracts) and 1980 c 37 s 37;
     (7) RCW 82.08.0278 (Exemptions -- Sales between political subdivisions resulting from annexation or incorporation) and 1980 c 37 s 44;
     (8) RCW 82.08.0287 (Exemptions -- Sales of passenger motor vehicles as ride-sharing vehicles) and 2001 c 320 s 4, 1996 c 244 s 4, 1995 c 274 s 2, 1993 c 488 s 2, & 1980 c 166 s 1;
     (9) RCW 82.08.02875 (Exemptions -- Vehicle parking charges subject to tax at stadium and exhibition center) and 1997 c 220 s 203;
     (10) RCW 82.08.0291 (Exemptions -- Sales of amusement and recreation services or personal services by nonprofit youth organization -- Local government physical fitness classes) and 2000 c 103 s 8, 1994 c 85 s 1, & 1981 c 74 s 2;
     (11) RCW 82.08.031 (Exemptions -- Sales to artistic or cultural organizations of certain objects acquired for exhibition or presentation) and 1981 c 140 s 4;
     (12) RCW 82.08.830 (Exemptions -- Sales at camp or conference center by nonprofit organization) and 1997 c 388 s 2;
     (13) RCW 82.08.834 (Exemptions -- Sales/leasebacks by regional transit authorities) and 2000 2nd sp.s. c 4 s 21;
     (14) RCW 82.08.870 (Exemptions -- Motorcycles for training programs) and 2001 c 285 s 2;
     (15) RCW 82.12.02525 (Exemptions -- Sale of copied public records by state and local agencies) and 2011 c 60 s 50, 2009 c 535 s 609, & 1996 c 63 s 2;
     (16) RCW 82.12.02569 (Exemptions -- Use of tangible personal property related to a building or structure that is an integral part of a laser interferometer gravitational wave observatory) and 1996 c 113 s 2;
     (17) RCW 82.12.930 (Exemptions -- Watershed protection or flood prevention) and 2003 c 5 s 17;
     (18) RCW 82.12.0274 (Exemptions -- Use of tangible personal property by political subdivision resulting from annexation or incorporation) and 1980 c 37 s 72;
     (19) RCW 82.12.0279 (Exemptions -- Use of ferry vessels by the state or local governmental units -- Components thereof) and 2003 c 5 s 9 & 1980 c 37 s 77;
     (20) RCW 82.12.0282 (Exemptions -- Use of vans as ride-sharing vehicles) and 2001 c 320 s 5, 1999 c 358 s 11, 1996 c 88 s 4, 1993 c 488 s 4, & 1980 c 166 s 2;
     (21) RCW 82.12.02917 (Exemptions -- Use of amusement and recreation services by nonprofit youth organization) and 1999 c 358 s 7;
     (22) RCW 82.12.031 (Exemptions -- Use by artistic or cultural organizations of certain objects) and 1981 c 140 s 5;
     (23) RCW 82.12.834 (Exemptions -- Sales/leasebacks by regional transit authorities) and 2001 c 320 s 6 & 2000 2nd sp.s. c 4 s 22;
     (24) RCW 82.12.845 (Use of motorcycles loaned to department of licensing) and 2001 c 121 s 1;
     (25) RCW 82.12.02595 (Exemptions -- Personal property and certain services donated to nonprofit organization or governmental entity) and 2009 c 535 s 615, 2004 c 155 s 1, 2003 c 5 s 11, 1998 c 182 s 1, & 1995 c 201 s 1;
     (26) RCW 82.12.0264 (Exemptions -- Use of dual-controlled motor vehicles by school for driver training) and 1980 c 37 s 63;
     (27) RCW 82.12.0284 (Exemptions -- Use of computers or computer components, accessories, software, digital goods, or digital codes donated to schools or colleges) and 2009 c 535 s 617, 2007 c 54 s 15, 2003 c 168 s 603, & 1983 1st ex.s. c 55 s 7;
     (28) RCW 82.08.995 (Exemptions -- Certain limited purpose public corporations, commissions, and authorities) and 2009 c 535 s 514 & 2007 c 381 s 2;
     (29) RCW 82.08.999 (Exemptions -- Joint municipal utility services authorities) and 2011 c 258 s 12;
     (30) RCW 82.12.999 (Exemptions -- Joint municipal utility services authorities) and 2011 c 258 s 13;
     (31) RCW 82.08.025651 (Exemptions -- Sales of machinery and equipment to public research institutions) and 2011 c 23 s 4;
     (32) RCW 82.12.025651 (Exemptions -- Use of machinery and equipment by public research institutions) and 2011 c 23 s 5; and
     (33) RCW 82.12.995 (Exemptions -- Certain limited purpose public corporations, commissions, and authorities) and 2009 c 535 s 622 & 2007 c 381 s 3.

NEW SECTION.  Sec. 202   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2021:
     (1) RCW 82.08.02081 (Exemptions -- Audio or video programming) and 2009 c 535 s 502;
     (2) RCW 82.08.02087 (Exemptions -- Digital goods and services--Purchased for business purposes) and 2010 c 111 s 402 & 2009 c 535 s 504;
     (3) RCW 82.08.02565 (Exemptions -- Sales of machinery and equipment for manufacturing, research and development, or a testing operation--Labor and services for installation -- Exemption certificate -- Rules) and 2011 c 23 s 2, 2009 c 535 s 510, 1999 c 211 s 5, 1999 c 211 s 3, & 1998 c 330 s 1;
     (4) RCW 82.08.02566 (Exemptions -- Sales of tangible personal property incorporated in prototype for parts, auxiliary equipment, and aircraft modification -- Limitations on yearly exemption) and 2003 c 168 s 208, 1997 c 302 s 1, & 1996 c 247 s 4;
     (5) RCW 82.08.02568 (Exemptions -- Sales of carbon and similar substances that become an ingredient or component of anodes or cathodes used in producing aluminum for sale) and 1996 c 170 s 1;
     (6) RCW 82.08.0267 (Exemptions -- Sales of poultry for producing poultry and poultry products for sale) and 1980 c 37 s 34;
     (7) RCW 82.08.0272 (Exemptions -- Sales of semen for artificial insemination of livestock) and 1980 c 37 s 38;
     (8) RCW 82.08.0274 (Exemptions -- Sales of form lumber to person engaged in constructing, repairing, etc., structures for consumers) and 1980 c 37 s 40;
     (9) RCW 82.08.02745 (Exemptions -- Charges for labor and services or sales of tangible personal property related to agricultural employee housing -- Exemption certificate -- Rules) and 2007 c 54 s 14, 1997 c 438 s 1, & 1996 c 117 s 1;
     (10) RCW 82.08.0288 (Exemptions -- Lease of certain irrigation equipment) and 1983 1st ex.s. c 55 s 5;
     (11) RCW 82.08.0294 (Exemptions -- Sales of feed for cultivating or raising fish for sale) and 1985 c 148 s 3;
     (12) RCW 82.08.0296 (Exemptions -- Sales of feed consumed by livestock at a public livestock market) and 1986 c 265 s 1;
     (13) RCW 82.08.0298 (Exemptions -- Sales of diesel fuel for use in operating watercraft in commercial deep sea fishing or commercial passenger fishing boat operations outside the state) and 1987 c 494 s 1;
     (14) RCW 82.08.0311 (Exemptions -- Sales of materials and supplies used in packing horticultural products) and 1988 c 68 s 1;
     (15) RCW 82.08.0315 (Exemptions -- Rentals or sales related to motion picture or video productions -- Exceptions -- Certificate) and 1997 c 61 s 1 & 1995 2nd sp.s. c 5 s 1;
     (16) RCW 82.08.036 (Exemptions -- Vehicle battery core deposits or credits -- Replacement vehicle tire fees -- "Core deposits or credits" defined) and 1989 c 431 s 45;
     (17) RCW 82.08.806 (Exemptions -- Sale of computer equipment parts and services to printer or publisher) and 2011 c 174 s 204, 2010 1st sp.s. c 23 s 516, 2009 c 461 s 5, & 2004 c 8 s 2;
     (18) RCW 82.08.807 (Exemptions--Direct mail delivery charges) and 2005 c 514 s 115;
     (19) RCW 82.08.810 (Exemptions -- Air pollution control facilities at a thermal electric generation facility -- Exceptions -- Exemption certificate -- Payments on cessation of operation) and 1997 c 368 s 2;
     (20) RCW 82.08.820 (Exemptions -- Remittance -- Warehouse and grain elevators and distribution centers -- Material-handling and racking equipment -- Construction of warehouse or elevator -- Information sheet--Rules -- Records -- Exceptions) and 2011 c 174 s 206, 2006 c 354 s 12, 2005 c 513 s 11, & 1997 c 450 s 2;
     (21) RCW 82.08.855 (Exemptions -- Replacement parts for qualifying farm machinery and equipment) and 2007 c 332 s 1 & 2006 c 172 s 1;
     (22) RCW 82.08.865 (Exemptions -- Diesel, biodiesel, and aircraft fuel for farm fuel users) and 2010 c 106 s 218, 2007 c 443 s 1, & 2006 c 7 s 1;
     (23) RCW 82.08.880 (Exemptions -- Animal pharmaceuticals) and 2001 2nd sp.s. c 17 s 1;
     (24) RCW 82.08.890 (Exemptions -- Qualifying livestock nutrient management equipment and facilities) and 2010 1st sp.s. c 23 s 601, 2009 c 469 s 601, 2006 c 151 s 2, & 2001 2nd sp.s. c 18 s 2;
     (25) RCW 82.08.900 (Exemptions -- Anaerobic digesters) and 2006 c 151 s 4 & 2001 2nd sp.s. c 18 s 4;
     (26) RCW 82.08.910 (Exemptions -- Propane or natural gas to heat chicken structures) and 2001 2nd sp.s. c 25 s 3;
     (27) RCW 82.08.920 (Exemptions -- Chicken bedding materials) and 2001 2nd sp.s. c 25 s 5;
     (28) RCW 82.08.990 (Exemptions -- Import or export commerce) and 2007 c 477 s 3;
     (29) RCW 82.12.02081 (Exemptions -- Audio or video programming) and 2009 c 535 s 602;
     (30) RCW 82.12.02087 (Exemptions -- Digital goods, codes, and services -- Used for business purposes) and 2010 c 111 s 502 & 2009 c 535 s 607;
     (31) RCW 82.12.02565 (Exemptions -- Machinery and equipment used for manufacturing, research and development, or a testing operation) and 2003 c 5 s 5, 1999 c 211 s 6, 1998 c 330 s 2, 1996 c 247 s 3, & 1995 1st sp.s. c 3 s 3;
     (32) RCW 82.12.02566 (Exemptions -- Use of tangible personal property incorporated in prototype for aircraft parts, auxiliary equipment, and aircraft modification -- Limitations on yearly exemption) and 2003 c 168 s 209, 1997 c 302 s 2, & 1996 c 247 s 5;
     (33) RCW 82.12.02568 (Exemptions -- Use of carbon and similar substances that become an ingredient or component of anodes or cathodes used in producing aluminum for sale) and 1996 c 170 s 2;
     (34) RCW 82.12.0267 (Exemptions -- Use of semen in artificial insemination of livestock) and 1980 c 37 s 66;
     (35) RCW 82.12.0268 (Exemptions -- Use of form lumber by persons engaged in constructing, repairing, etc., structures for consumers) and 1980 c 37 s 67;
     (36) RCW 82.12.02685 (Exemptions -- Use of tangible personal property related to agricultural employee housing) and 1997 c 438 s 2 & 1996 c 117 s 2;
     (37) RCW 82.12.0273 (Exemptions -- Use of pollen) and 1980 c 37 s 71;
     (38) RCW 82.12.0283 (Exemptions -- Use of certain irrigation equipment) and 1983 1st ex.s. c 55 s 6;
     (39) RCW 82.12.0294 (Exemptions -- Use of feed for cultivating or raising fish for sale) and 1985 c 148 s 4;
     (40) RCW 82.12.0296 (Exemptions -- Use of feed consumed by livestock at a public livestock market) and 1986 c 265 s 2;
     (41) RCW 82.12.0298 (Exemptions -- Use of diesel fuel in operating watercraft in commercial deep sea fishing or commercial passenger fishing boat operations outside the state) and 1987 c 494 s 2;
     (42) RCW 82.12.0311 (Exemptions -- Use of materials and supplies in packing horticultural products) and 1988 c 68 s 2;
     (43) RCW 82.12.0315 (Exemptions -- Rental or sales related to motion picture or video productions -- Exceptions) and 2009 c 535 s 614, 2003 c 5 s 10, & 1995 2nd sp.s. c 5 s 2;
     (44) RCW 82.12.038 (Exemptions -- Vehicle battery core deposits or credits -- Replacement vehicle tire fees -- "Core deposits or credits" defined) and 1989 c 431 s 46;
     (45) RCW 82.12.806 (Exemptions -- Use of computer equipment parts and services by printer or publisher) and 2004 c 8 s 3;
     (46) RCW 82.12.807 (Exemptions -- Direct mail delivery charges) and 2005 c 514 s 116;
     (47) RCW 82.12.810 (Exemptions -- Air pollution control facilities at a thermal electric generation facility -- Exceptions -- Payments on cessation of operation) and 2003 c 5 s 12 & 1997 c 368 s 3;
     (48) RCW 82.12.820 (Exemptions -- Warehouse and grain elevators and distribution centers) and 2006 c 354 s 13, 2005 c 513 s 12, 2003 c 5 s 13, 2000 c 103 s 9, & 1997 c 450 s 3;
     (49) RCW 82.12.855 (Exemptions -- Replacement parts for qualifying farm machinery and equipment) and 2007 c 332 s 2 & 2006 c 172 s 2;
     (50) RCW 82.12.865 (Exemptions--Diesel, biodiesel, and aircraft fuel for farm fuel users) and 2010 c 106 s 222, 2007 c 443 s 2, & 2006 c 7 s 2;
     (51) RCW 82.12.880 (Exemptions -- Animal pharmaceuticals) and 2001 2nd sp.s. c 17 s 2;
     (52) RCW 82.12.890 (Exemptions -- Livestock nutrient management equipment and facilities) and 2010 1st sp.s. c 23 s 602, 2009 c 469 s 602, 2006 c 151 s 3, 2003 c 5 s 15, & 2001 2nd sp.s. c 18 s 3;
     (53) RCW 82.12.900 (Exemptions -- Anaerobic digesters) and 2006 c 151 s 5, 2003 c 5 s 16, & 2001 2nd sp.s. c 18 s 5;
     (54) RCW 82.12.910 (Exemptions -- Propane or natural gas to heat chicken structures) and 2001 2nd sp.s. c 25 s 4;
     (55) RCW 82.12.920 (Exemptions -- Chicken bedding materials) and 2001 2nd sp.s. c 25 s 6;
     (56) RCW 82.12.800 (Exemptions -- Uses of vessel, vessel's trailer by manufacturer) and 2011 c 171 s 121 & 1997 c 293 s 1;
     (57) RCW 82.12.801 (Exemptions -- Uses of vessel, vessel's trailer by dealer) and 2011 c 171 s 122 & 1997 c 293 s 2;
     (58) RCW 82.12.802 (Vessels held in inventory by dealer or manufacturer -- Tax on personal use -- Documentation -- Rules) and 1997 c 293 s 3;
     (59) RCW 82.12.860 (Exemptions -- Property and services acquired from a federal credit union) and 2009 c 535 s 621 & 2006 c 11 s 1;
     (60) RCW 82.66.040 (Repayment schedule -- Interest, penalties) and 1998 c 339 s 1 & 1995 c 352 s 4;
     (61) RCW 82.08.850 (Exemptions -- Conifer seed) and 2001 c 129 s 2;
     (62) RCW 82.12.850 (Exemptions -- Conifer seed) and 2001 c 129 s 3;
     (63) RCW 82.12.02085 (Exemptions -- Digital goods -- Noncommercial--Internal audience -- Not for sale) and 2009 c 535 s 605;
     (64) RCW 82.08.0282 (Exemptions -- Sales of returnable containers for beverages and foods) and 1980 c 37 s 47;
     (65) RCW 82.08.0269 (Exemptions -- Sales for use in states, territories, and possessions of the United States which are not contiguous to any other state) and 1980 c 37 s 36;
     (66) RCW 82.08.0279 (Exemptions -- Renting or leasing of motor vehicles and trailers to a nonresident for use in the transportation of persons or property across state boundaries) and 1980 c 37 s 45;
     (67) RCW 82.08.700 (Exemptions -- Vessels sold to nonresidents) and 2010 c 106 s 219 & 2007 c 22 s 1;
     (68) RCW 82.12.700 (Exemptions -- Vessels sold to nonresidents) and 2007 c 22 s 2; and
     (69) RCW 82.12.955 (Exemptions -- Use of machinery, equipment, vehicles, and services related to biodiesel or E85 motor fuel) and 2007 c 309 s 5 & 2003 c 63 s 3.

NEW SECTION.  Sec. 203   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2023:
     (1) RCW 82.08.02537 (Exemptions -- Sales of academic transcripts) and 2009 c 535 s 508 & 1996 c 272 s 2;
     (2) RCW 82.08.0289 (Exemptions -- Telephone, telecommunications, and ancillary services) and 2007 c 6 s 1006, 2007 c 6 s 1005, 2002 c 67 s 6, & 1983 2nd ex.s. c 3 s 30;
     (3) RCW 82.08.832 (Exemptions -- Sales of gun safes) and 1998 c 178 s 1;
     (4) RCW 82.12.0347 (Exemptions -- Use of academic transcripts) and 2009 c 535 s 619 & 1996 c 272 s 3;
     (5) RCW 82.12.832 (Exemptions -- Use of gun safes) and 1998 c 178 s 2;
     (6) RCW 82.08.0205 (Exemptions -- Waste vegetable oil) and 2008 c 237 s 2;
     (7) RCW 82.08.02082 (Exemptions -- Digital products or services--Ingredient or component -- Made available for free) and 2010 c 111 s 401 & 2009 c 535 s 503;
     (8) RCW 82.08.9995 (Exemptions -- Restaurant employee meals) and 2011 c 55 s 2;
     (9) RCW 82.12.9995 (Exemptions -- Restaurant employee meals) and 2011 c 55 s 3;
     (10) RCW 82.12.0205 (Exemptions -- Waste vegetable oil) and 2008 c 237 s 3; and
     (11) RCW 82.12.02082 (Exemptions -- Digital products or services--Made available for free to general public) and 2010 c 111 s 501 & 2009 c 535 s 603.

NEW SECTION.  Sec. 204   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2025:
     (1) RCW 82.08.0258 (Exemptions -- Sales to federal corporations providing aid and relief) and 1980 c 37 s 26;
     (2) RCW 82.08.02795 (Exemptions--Sales to free hospitals) and 1993 c 205 s 1;
     (3) RCW 82.08.02805 (Exemptions -- Sales to qualifying blood, tissue, or blood and tissue banks) and 2004 c 82 s 2 & 1995 2nd sp.s. c 9 s 4;
     (4) RCW 82.08.02806 (Exemptions -- Sales of human blood, tissue, organs, bodies, or body parts for medical research and quality control testing) and 1996 c 141 s 1;
     (5) RCW 82.08.02807 (Exemptions -- Sales to organ procurement organization) and 2002 c 113 s 2;
     (6) RCW 82.08.0283 (Exemptions -- Certain medical items) and 2007 c 6 s 1101, 2004 c 153 s 101, 2003 c 168 s 409, 2001 c 75 s 1, 1998 c 168 s 2, 1997 c 224 s 1, 1996 c 162 s 1, 1991 c 250 s 2, 1986 c 255 s 1, 1980 c 86 s 1, & 1980 c 37 s 48;
     (7) RCW 82.08.02915 (Exemptions -- Sales used by health or social welfare organizations for alternative housing for youth in crisis) and 1998 c 183 s 1, 1997 c 386 s 56, & 1995 c 346 s 1;
     (8) RCW 82.08.0299 (Exemptions -- Emergency lodging for homeless persons -- Conditions) and 1988 c 61 s 1;
     (9) RCW 82.08.803 (Exemptions -- Nebulizers) and 2007 c 6 s 1103 & 2004 c 153 s 104;
     (10) RCW 82.08.804 (Exemptions -- Ostomic items) and 2004 c 153 s 106;
     (11) RCW 82.08.808 (Exemptions -- Sales of medical supplies, chemicals, or materials to comprehensive cancer centers) and 2005 c 514 s 402;
     (12) RCW 82.08.925 (Exemptions -- Dietary supplements) and 2003 c 168 s 302;
     (13) RCW 82.08.935 (Exemptions -- Disposable devices used to deliver prescription drugs for human use) and 2003 c 168 s 404;
     (14) RCW 82.08.940 (Exemptions -- Over-the-counter drugs for human use) and 2003 c 168 s 405;
     (15) RCW 82.08.945 (Exemptions -- Kidney dialysis devices) and 2004 c 153 s 110 & 2003 c 168 s 410;
     (16) RCW 82.08.997 (Exemptions -- Temporary medical housing) and 2008 c 137 s 2;
     (17) RCW 82.08.998 (Exemptions -- Weatherization of a residence) and 2008 c 92 s 1;
     (18) RCW 82.12.0259 (Exemptions -- Use of personal property, digital automated services, or certain other services by federal corporations providing aid and relief) and 2009 c 535 s 613, 2003 c 5 s 7, & 1980 c 37 s 59;
     (19) RCW 82.12.02745 (Exemptions--Use by free hospitals of certain items) and 1993 c 205 s 2;
     (20) RCW 82.12.02747 (Exemptions -- Use of medical products by qualifying blood, tissue, or blood and tissue banks) and 2004 c 82 s 3 & 1995 2nd sp.s. c 9 s 5;
     (21) RCW 82.12.02748 (Exemptions -- Use of human blood, tissue, organs, bodies, or body parts for medical research or quality control testing) and 1996 c 141 s 2;
     (22) RCW 82.12.02749 (Exemptions -- Use of medical supplies, chemicals, or materials by organ procurement organization) and 2002 c 113 s 3;
     (23) RCW 82.12.0277 (Exemptions -- Certain medical items) and 2007 c 6 s 1102 & 2004 c 153 s 109;
     (24) RCW 82.12.02915 (Exemptions -- Use of items by health or social welfare organizations for alternative housing for youth in crisis) and 1998 c 183 s 2, 1997 c 386 s 57, & 1995 c 346 s 2;
     (25) RCW 82.12.803 (Exemptions -- Nebulizers) and 2007 c 6 s 1104 & 2004 c 153 s 105;
     (26) RCW 82.12.804 (Exemptions -- Ostomic items) and 2004 c 153 s 107;
     (27) RCW 82.12.808 (Exemptions -- Use of medical supplies, chemicals, or materials by comprehensive cancer centers) and 2005 c 514 s 403;
     (28) RCW 82.12.925 (Exemptions -- Dietary supplements) and 2003 c 168 s 304;
     (29) RCW 82.12.935 (Exemptions -- Disposable devices used to deliver prescription drugs for human use) and 2003 c 168 s 407;
     (30) RCW 82.12.940 (Exemptions -- Over-the-counter drugs for human use) and 2003 c 168 s 408;
     (31) RCW 82.12.945 (Exemptions -- Kidney dialysis devices) and 2004 c 153 s 111 & 2003 c 168 s 411; and
     (32) RCW 82.12.998 (Exemptions -- Weatherization of a residence) and 2008 c 92 s 2.

Sec. 205   RCW 82.04.050 and 2011 c 174 s 202 are each amended to read as follows:
     (1)(a) "Sale at retail" or "retail sale" means every sale of tangible personal property (including articles produced, fabricated, or imprinted) to all persons irrespective of the nature of their business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than a sale to a person who:
     (i) Purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person, but a purchase for the purpose of resale by a regional transit authority under RCW 81.112.300 is not a sale for resale; or
     (ii) Installs, repairs, cleans, alters, imprints, improves, constructs, or decorates real or personal property of or for consumers, if such tangible personal property becomes an ingredient or component of such real or personal property without intervening use by such person; or
     (iii) Purchases for the purpose of consuming the property purchased in producing for sale as a new article of tangible personal property or substance, of which such property becomes an ingredient or component or is a chemical used in processing, when the primary purpose of such chemical is to create a chemical reaction directly through contact with an ingredient of a new article being produced for sale; or
     (iv) Until July 1, 2021, purchases for the purpose of consuming the property purchased in producing ferrosilicon which is subsequently used in producing magnesium for sale, if the primary purpose of such property is to create a chemical reaction directly through contact with an ingredient of ferrosilicon; or
     (v) Purchases for the purpose of providing the property to consumers as part of competitive telephone service, as defined in RCW 82.04.065; or
     (vi) Purchases for the purpose of satisfying the person's obligations under an extended warranty as defined in subsection (7) of this section, if such tangible personal property replaces or becomes an ingredient or component of property covered by the extended warranty without intervening use by such person.
     (b) The term includes every sale of tangible personal property that is used or consumed or to be used or consumed in the performance of any activity defined as a "sale at retail" or "retail sale" even though such property is resold or used as provided in (a)(i) through (vi) of this subsection following such use.
     (c) The term also means every sale of tangible personal property to persons engaged in any business that is taxable under RCW 82.04.280(1) (a), (b), and (g), 82.04.290, and 82.04.2908.
     (2) The term "sale at retail" or "retail sale" includes the sale of or charge made for tangible personal property consumed and/or for labor and services rendered in respect to the following:
     (a) The installing, repairing, cleaning, altering, imprinting, or improving of tangible personal property of or for consumers, including charges made for the mere use of facilities in respect thereto, but excluding, until July 1, 2023, charges made for the use of self-service laundry facilities, and until July 1, 2017, also excluding sales of laundry service to nonprofit health care facilities, and excluding, until July 1, 2021, services rendered in respect to live animals, birds and insects;
     (b) The constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for consumers, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, and also includes the sale of services or charges made for the clearing of land and the moving of earth excepting the mere leveling of land used in commercial farming or agriculture;
     (c) The constructing, repairing, or improving of any structure upon, above, or under any real property owned by an owner who conveys the property by title, possession, or any other means to the person performing such construction, repair, or improvement for the purpose of performing such construction, repair, or improvement and the property is then reconveyed by title, possession, or any other means to the original owner;
     (d) The cleaning, fumigating, razing, or moving of existing buildings or structures, but until July 1, 2017, does not include the charge made for janitorial services; and for purposes of this section the term "janitorial services" means those cleaning and caretaking services ordinarily performed by commercial janitor service businesses including, but not limited to, wall and window washing, floor cleaning and waxing, and the cleaning in place of rugs, drapes and upholstery. The term "janitorial services" does not include painting, papering, repairing, furnace or septic tank cleaning, snow removal or sandblasting;
     (e) Automobile towing and similar automotive transportation services, but not in respect to those required to report and pay taxes under chapter 82.16 RCW;
     (f) The furnishing of lodging and all other services by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property, and it is presumed that the occupancy of real property for a continuous period of one month or more constitutes a rental or lease of real property and not a mere license to use or enjoy the same. For the purposes of this subsection, it is presumed that the sale of and charge made for the furnishing of lodging for a continuous period of one month or more to a person is a rental or lease of real property and not a mere license to enjoy the same;
     (g) The installing, repairing, altering, or improving of digital goods for consumers;
     (h) Persons taxable under (a), (b), (c), (d), (e), (f), and (g) of this subsection when such sales or charges are for property, labor and services which are used or consumed in whole or in part by such persons in the performance of any activity defined as a "sale at retail" or "retail sale" even though such property, labor and services may be resold after such use or consumption. Nothing contained in this subsection may be construed to modify subsection (1) of this section and nothing contained in subsection (1) of this section may be construed to modify this subsection.
     (3) The term "sale at retail" or "retail sale" includes the sale of or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admission, and other service emoluments however designated, received by persons engaging in the following business activities:
     (a) Amusement and recreation services including but not limited to golf, pool, billiards, skating, bowling, ski lifts and tows, day trips for sightseeing purposes, and others, when provided to consumers;
     (b) Abstract, title insurance, and escrow services;
     (c) Credit bureau services;
     (d) Automobile parking and storage garage services;
     (e) Landscape maintenance and horticultural services but excluding, until July 1, 2021, (i) horticultural services provided to farmers and (ii) pruning, trimming, repairing, removing, and clearing of trees and brush near electric transmission or distribution lines or equipment, if performed by or at the direction of an electric utility;
     (f) Service charges associated with tickets to professional sporting events; and
     (g) The following personal services: Physical fitness services, tanning salon services, tattoo parlor services, steam bath services, turkish bath services, escort services, and dating services.
     (4)(a) The term also includes the renting or leasing of tangible personal property to consumers.
     (b) The term does not include the renting or leasing of tangible personal property where the lease or rental is for the purpose of sublease or subrent.
     (5) The term also includes the providing of "competitive telephone service," "telecommunications service," or "ancillary services," as those terms are defined in RCW 82.04.065, to consumers.
     (6)(a)(i) The term also includes the sale of prewritten computer software to a consumer, regardless of the method of delivery to the end user. For purposes of this subsection (6)(a), the sale of prewritten computer software includes the sale of or charge made for a key or an enabling or activation code, where the key or code is required to activate prewritten computer software and put the software into use. There is no separate sale of the key or code from the prewritten computer software, regardless of how the sale may be characterized by the vendor or by the purchaser.
     (ii) Until July 1, 2021 the term "retail sale" does not include the sale of or charge made for:
     (((i))) (A) Custom software; or
     (((ii))) (B) The customization of prewritten computer software.
     (b)(i) The term also includes the charge made to consumers for the right to access and use prewritten computer software, where possession of the software is maintained by the seller or a third party, regardless of whether the charge for the service is on a per use, per user, per license, subscription, or some other basis.
     (ii)(A) The service described in (b)(i) of this subsection (6) includes the right to access and use prewritten computer software to perform data processing.
     (B) For purposes of this subsection (6)(b)(ii), "data processing" means the systematic performance of operations on data to extract the required information in an appropriate form or to convert the data to usable information. Data processing includes check processing, image processing, form processing, survey processing, payroll processing, claim processing, and similar activities.
     (7) The term also includes the sale of or charge made for an extended warranty to a consumer. For purposes of this subsection, "extended warranty" means an agreement for a specified duration to perform the replacement or repair of tangible personal property at no additional charge or a reduced charge for tangible personal property, labor, or both, or to provide indemnification for the replacement or repair of tangible personal property, based on the occurrence of specified events. The term "extended warranty" does not include an agreement, otherwise meeting the definition of extended warranty in this subsection, if no separate charge is made for the agreement and the value of the agreement is included in the sales price of the tangible personal property covered by the agreement. For purposes of this subsection, "sales price" has the same meaning as in RCW 82.08.010.
     (8)(a) The term also includes the following sales to consumers of digital goods, digital codes, and digital automated services:
     (i) Sales in which the seller has granted the purchaser the right of permanent use;
     (ii) Sales in which the seller has granted the purchaser a right of use that is less than permanent;
     (iii) Sales in which the purchaser is not obligated to make continued payment as a condition of the sale; and
     (iv) Sales in which the purchaser is obligated to make continued payment as a condition of the sale.
     (b) A retail sale of digital goods, digital codes, or digital automated services under this subsection (8) includes any services provided by the seller exclusively in connection with the digital goods, digital codes, or digital automated services, whether or not a separate charge is made for such services.
     (c) For purposes of this subsection, "permanent" means perpetual or for an indefinite or unspecified length of time. A right of permanent use is presumed to have been granted unless the agreement between the seller and the purchaser specifies or the circumstances surrounding the transaction suggest or indicate that the right to use terminates on the occurrence of a condition subsequent.
     (9) The term also includes the charge made for providing tangible personal property along with an operator for a fixed or indeterminate period of time. A consideration of this is that the operator is necessary for the tangible personal property to perform as designed. For the purpose of this subsection (9), an operator must do more than maintain, inspect, or set up the tangible personal property.
     (10)(a) Until July 1, 2017, the term does not include the sale of or charge made for labor and services rendered in respect to the building, repairing, or improving of any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind.
     (b) The term does not include the sale of or charge made for labor and services rendered in respect to the building, repairing, or improving of any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by the United States and which is used or to be used primarily for foot or vehicular traffic including mass transportation vehicles of any kind.
     (11) Until July 1, 2017, the term also does not include sales of chemical sprays or washes to persons for the purpose of postharvest treatment of fruit for the prevention of scald, fungus, mold, or decay, nor does it include sales of feed, seed, seedlings, fertilizer, agents for enhanced pollination including insects such as bees, and spray materials to: (a) Persons who participate in the federal conservation reserve program, the environmental quality incentives program, the wetlands reserve program, and the wildlife habitat incentives program, or their successors administered by the United States department of agriculture; (b) farmers for the purpose of producing for sale any agricultural product; and (c) farmers acting under cooperative habitat development or access contracts with an organization exempt from federal income tax under 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue code or the Washington state department of fish and wildlife to produce or improve wildlife habitat on land that the farmer owns or leases.
     (12)(a) Until July 1, 2019, the term does not include the sale of or charge made for labor and services rendered in respect to the constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing, or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation. Nor does the term include the sale of services or charges made for the clearing of land and the moving of earth of or for the United States, any instrumentality thereof, or a county or city housing authority. Nor does the term include the sale of services or charges made for cleaning up for the United States, or its instrumentalities, radioactive waste and other by-products of weapons production and nuclear research and development.
     (b) The term does not include the sale of or charge made for labor and services rendered in respect to the constructing, repairing, decorating, or improving of new or existing buildings or other structures under, upon, or above real property of or for the United States or any instrumentality thereof, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation. Nor does the term include the sale of services or charges made for the clearing of land and the moving of earth of or for the United States or any instrumentality thereof. Nor does the term include the sale of services or charges made for cleaning up for the United States or its instrumentalities, radioactive waste and other by-products of weapons production and nuclear research and development.
     (13) Until July 1, 2019, the term does not include the sale of or charge made for labor, services, or tangible personal property pursuant to agreements providing maintenance services for bus, rail, or rail fixed guideway equipment when a regional transit authority is the recipient of the labor, services, or tangible personal property, and a transit agency, as defined in RCW 81.104.015, performs the labor or services.
     (14) The term does not include the sale for resale of any service described in this section if the sale would otherwise constitute a "sale at retail" and "retail sale" under this section.

Sec. 206   RCW 82.04.062 and 1985 c 471 s 5 are each amended to read as follows:
     (1) Until July 1, 2021, for purposes of this chapter, "wholesale sale," "sale at wholesale," "retail sale," and "sale at retail" do not include the sale of precious metal bullion or monetized bullion.
     (2) Until July 1, 2021, in computing tax under this chapter on the business of making sales of precious metal bullion or monetized bullion, the tax ((shall be)) is imposed on the amounts received as commissions upon transactions for the accounts of customers over and above the amount paid to other dealers associated in such transactions, but no deduction or offset is allowed on account of salaries or commissions paid to salesmen or other employees.
     (3) For purposes of this section, "precious metal bullion" means any precious metal which has been put through a process of smelting or refining, including, but not limited to, gold, silver, platinum, rhodium, and palladium, and which is in such state or condition that its value depends upon its contents and not upon its form. For purposes of this section, "monetized bullion" means coins or other forms of money manufactured from gold, silver, or other metals and heretofore, now, or hereafter used as a medium of exchange under the laws of this state, the United States, or any foreign nation, but does not include coins or money sold to be manufactured into jewelry or works of art.

Sec. 207   RCW 82.08.010 and 2010 c 106 s 210 are each amended to read as follows:
     For the purposes of this chapter:
     (1)(a) "Selling price" includes "sales price." "Sales price" means the total amount of consideration, ((except separately stated trade-in property of like kind,)) including cash, credit, property, and services, for which tangible personal property, extended warranties, digital goods, digital codes, digital automated services, or other services or anything else defined as a "retail sale" under RCW 82.04.050 are sold, leased, or rented, valued in money, whether received in money or otherwise. No deduction from the total amount of consideration is allowed for the following: (i) The seller's cost of the property sold; (ii) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (iii) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; (iv) delivery charges; and (v) installation charges.
     When tangible personal property is rented or leased under circumstances that the consideration paid does not represent a reasonable rental for the use of the articles so rented or leased, the "selling price" shall be determined as nearly as possible according to the value of such use at the places of use of similar products of like quality and character under such rules as the department may prescribe;
     (b) "Selling price" or "sales price" does not include: Discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale; interest, financing, and carrying charges from credit extended on the sale of tangible personal property, extended warranties, digital goods, digital codes, digital automated services, or other services or anything else defined as a retail sale in RCW 82.04.050, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;
     (c) "Selling price" or "sales price" includes consideration received by the seller from a third party if:
     (i) The seller actually receives consideration from a party other than the purchaser, and the consideration is directly related to a price reduction or discount on the sale;
     (ii) The seller has an obligation to pass the price reduction or discount through to the purchaser;
     (iii) The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and
     (iv) One of the criteria in this subsection (1)(c)(iv) is met:
     (A) The purchaser presents a coupon, certificate, or other documentation to the seller to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate, or documentation is presented;
     (B) The purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount, however a "preferred customer" card that is available to any patron does not constitute membership in such a group; or
     (C) The price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser;
     (d) Until July 1, 2021, "selling price" or "sales price" does not include separately stated trade-in property of like kind;
     (2)(a) "Seller" means every person, including the state and its departments and institutions, making sales at retail or retail sales to a buyer, purchaser, or consumer, whether as agent, broker, or principal, except "seller" does not mean:
     (i) The state and its departments and institutions when making sales to the state and its departments and institutions; or
     (ii) A professional employer organization when a covered employee coemployed with the client under the terms of a professional employer agreement engages in activities that constitute a sale at retail that is subject to the tax imposed by this chapter. In such cases, the client, and not the professional employer organization, is deemed to be the seller and is responsible for collecting and remitting the tax imposed by this chapter.
     (b) For the purposes of (a) of this subsection, the terms "client," "covered employee," "professional employer agreement," and "professional employer organization" have the same meanings as in RCW 82.04.540;
     (3) "Buyer," "purchaser," and "consumer" include, without limiting the scope hereof, every individual, receiver, assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint venture, club, company, joint stock company, business trust, corporation, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise, municipal corporation, quasi municipal corporation, and also the state, its departments and institutions and all political subdivisions thereof, irrespective of the nature of the activities engaged in or functions performed, and also the United States or any instrumentality thereof;
     (4) "Delivery charges" means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser of personal property or services including, but not limited to, transportation, shipping, postage, handling, crating, and packing;
     (5) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items are not billed directly to the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. "Direct mail" does not include multiple items of printed material delivered to a single address;
     (6) The meaning attributed in chapter 82.04 RCW to the terms "tax year," "taxable year," "person," "company," "sale," "sale at wholesale," "wholesale," "business," "engaging in business," "cash discount," "successor," "consumer," "in this state" and "within this state" applies equally to the provisions of this chapter;
     (7) For the purposes of the taxes imposed under this chapter and under chapter 82.12 RCW, "tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. Tangible personal property includes electricity, water, gas, steam, and prewritten computer software;
     (8) "Extended warranty" has the same meaning as in RCW 82.04.050(7);
     (9) The definitions in RCW 82.04.192 apply to this chapter;
     (10) For the purposes of the taxes imposed under this chapter and chapter 82.12 RCW, whenever the terms "property" or "personal property" are used, those terms must be construed to include digital goods and digital codes unless:
     (a) It is clear from the context that the term "personal property" is intended only to refer to tangible personal property;
     (b) It is clear from the context that the term "property" is intended only to refer to tangible personal property, real property, or both; or
     (c) To construe the term "property" or "personal property" as including digital goods and digital codes would yield unlikely, absurd, or strained consequences; and
     (11) "Retail sale" or "sale at retail" means any sale, lease, or rental for any purpose other than for resale, sublease, or subrent.

Sec. 208   RCW 82.12.010 and 2010 c 127 s 4 are each reenacted and amended to read as follows:
     For the purposes of this chapter:
     (1) The meaning ascribed to words and phrases in chapters 82.04 and 82.08 RCW, insofar as applicable, has full force and effect with respect to taxes imposed under the provisions of this chapter. "Consumer," in addition to the meaning ascribed to it in chapters 82.04 and 82.08 RCW insofar as applicable, also means any person who distributes or displays, or causes to be distributed or displayed, any article of tangible personal property, except newspapers, the primary purpose of which is to promote the sale of products or services. With respect to property distributed to persons within this state by a consumer as defined in this subsection (1), the use of the property is deemed to be by such consumer.
     (2) "Extended warranty" has the same meaning as in RCW 82.04.050(7).
     (3) "Purchase price" means the same as sales price as defined in RCW 82.08.010.
     (4)(a)(i) Except as provided in (a)(ii) of this subsection (4), "retailer" means every seller as defined in RCW 82.08.010 and every person engaged in the business of selling tangible personal property at retail and every person required to collect from purchasers the tax imposed under this chapter.
     (ii) "Retailer" does not include a professional employer organization when a covered employee coemployed with the client under the terms of a professional employer agreement engages in activities that constitute a sale of tangible personal property, extended warranty, digital good, digital code, or a sale of any digital automated service or service defined as a retail sale in RCW 82.04.050 (2)(a) or (g), (3)(a), or (6)(b) that is subject to the tax imposed by this chapter. In such cases, the client, and not the professional employer organization, is deemed to be the retailer and is responsible for collecting and remitting the tax imposed by this chapter.
     (b) For the purposes of (a) of this subsection, the terms "client," "covered employee," "professional employer agreement," and "professional employer organization" have the same meanings as in RCW 82.04.540.
     (5) "Taxpayer" and "purchaser" include all persons included within the meaning of the word "buyer" and the word "consumer" as defined in chapters 82.04 and 82.08 RCW.
     (6) "Use," "used," "using," or "put to use" have their ordinary meaning, and mean:
     (a) With respect to tangible personal property, except for natural gas and manufactured gas, the first act within this state by which the taxpayer takes or assumes dominion or control over the article of tangible personal property (as a consumer), and include installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption within this state;
     (b) With respect to a service defined in RCW 82.04.050(2)(a), the first act within this state after the service has been performed by which the taxpayer takes or assumes dominion or control over the article of tangible personal property upon which the service was performed (as a consumer), and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state;
     (c) With respect to an extended warranty, the first act within this state after the extended warranty has been acquired by which the taxpayer takes or assumes dominion or control over the article of tangible personal property to which the extended warranty applies, and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state;
     (d) With respect to a digital good or digital code, the first act within this state by which the taxpayer, as a consumer, views, accesses, downloads, possesses, stores, opens, manipulates, or otherwise uses or enjoys the digital good or digital code;
     (e) With respect to a digital automated service, the first act within this state by which the taxpayer, as a consumer, uses, enjoys, or otherwise receives the benefit of the service;
     (f) With respect to a service defined as a retail sale in RCW 82.04.050(6)(b), the first act within this state by which the taxpayer, as a consumer, accesses the prewritten computer software;
     (g) With respect to a service defined as a retail sale in RCW 82.04.050(2)(g), the first act within this state after the service has been performed by which the taxpayer, as a consumer, views, accesses, downloads, possesses, stores, opens, manipulates, or otherwise uses or enjoys the digital good upon which the service was performed; and
     (h) With respect to natural gas or manufactured gas, the use of which is taxable under RCW 82.12.022, including gas that is also taxable under the authority of RCW 82.14.230, the first act within this state by which the taxpayer consumes the gas by burning the gas or storing the gas in the taxpayer's own facilities for later consumption by the taxpayer.
     (7)(a) "Value of the article used" is the purchase price for the article of tangible personal property, the use of which is taxable under this chapter. The term also includes, in addition to the purchase price, the amount of any tariff or duty paid with respect to the importation of the article used. In case the article used is acquired by lease or by gift or is extracted, produced, or manufactured by the person using the same or is sold under conditions wherein the purchase price does not represent the true value thereof, the value of the article used is determined as nearly as possible according to the retail selling price at place of use of similar products of like quality and character under such rules as the department may prescribe.
     (b) In case the articles used are acquired by bailment, the value of the use of the articles so used must be in an amount representing a reasonable rental for the use of the articles so bailed, determined as nearly as possible according to the value of such use at the places of use of similar products of like quality and character under such rules as the department of revenue may prescribe. In case any such articles of tangible personal property are used in respect to the construction, repairing, decorating, or improving of, and which become or are to become an ingredient or component of, new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any such articles therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, then the value of the use of such articles so used is determined according to the retail selling price of such articles, or in the absence of such a selling price, as nearly as possible according to the retail selling price at place of use of similar products of like quality and character or, in the absence of either of these selling price measures, such value may be determined upon a cost basis, in any event under such rules as the department of revenue may prescribe.
     (c) Until July 1, 2021, in the case of articles owned by a user engaged in business outside the state which are brought into the state for no more than one hundred eighty days in any period of three hundred sixty-five consecutive days and which are temporarily used for business purposes by the person in this state, the value of the article used must be an amount representing a reasonable rental for the use of the articles, unless the person has paid tax under this chapter or chapter 82.08 RCW upon the full value of the article used, as defined in (a) of this subsection.
     (d) In the case of articles manufactured or produced by the user and used in the manufacture or production of products sold or to be sold to the department of defense of the United States, the value of the articles used is determined according to the value of the ingredients of such articles.
     (e) In the case of an article manufactured or produced for purposes of serving as a prototype for the development of a new or improved product, the value of the article used is determined by: (i) The retail selling price of such new or improved product when first offered for sale; or (ii) the value of materials incorporated into the prototype in cases in which the new or improved product is not offered for sale.
     (f) In the case of an article purchased with a direct pay permit under RCW 82.32.087, the value of the article used is determined by the purchase price of such article if, but for the use of the direct pay permit, the transaction would have been subject to sales tax.
     (8) "Value of the digital good or digital code used" means the purchase price for the digital good or digital code, the use of which is taxable under this chapter. If the digital good or digital code is acquired other than by purchase, the value of the digital good or digital code must be determined as nearly as possible according to the retail selling price at place of use of similar digital goods or digital codes of like quality and character under rules the department may prescribe.
     (9) "Value of the extended warranty used" means the purchase price for the extended warranty, the use of which is taxable under this chapter. If the extended warranty is received by gift or under conditions wherein the purchase price does not represent the true value of the extended warranty, the value of the extended warranty used is determined as nearly as possible according to the retail selling price at place of use of similar extended warranties of like quality and character under rules the department may prescribe.
     (10) "Value of the service used" means the purchase price for the digital automated service or other service, the use of which is taxable under this chapter. If the service is received by gift or under conditions wherein the purchase price does not represent the true value thereof, the value of the service used is determined as nearly as possible according to the retail selling price at place of use of similar services of like quality and character under rules the department may prescribe.

Sec. 209   RCW 82.66.020 and 1995 c 352 s 2 are each amended to read as follows:
     Application for deferral of taxes under this chapter ((shall)) must be made to the department in a form and manner prescribed by the department. The application ((shall)) must contain information regarding the location of the investment project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department ((shall)) must rule on the application within sixty days. The department may not accept applications for deferral of taxes under this chapter on or after July 1, 2021.

NEW SECTION.  Sec. 301   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2019:
     (1) RCW 82.04.339 (Exemptions -- Day care provided by churches) and 1992 c 81 s 1;
     (2) RCW 82.04.3395 (Exemptions -- Child care resource and referral services by nonprofit organizations) and 1995 2nd sp.s. c 11 s 3;
     (3) RCW 82.04.363 (Exemptions -- Camp or conference center -- Items sold or furnished by nonprofit organization) and 2009 c 535 s 409 & 1997 c 388 s 1;
     (4) RCW 82.04.3651 (Exemptions -- Amounts received by nonprofit organizations for fund-raising activities) and 2010 c 106 s 208, 1999 c 358 s 3, & 1998 c 336 s 2;
     (5) RCW 82.04.367 (Exemptions -- Nonprofit organizations that are guarantee agencies, issue debt, or provide guarantees for student loans) and 1998 c 324 s 1 & 1987 c 433 s 1;
     (6) RCW 82.04.368 (Exemptions -- Nonprofit organizations -- Credit and debt services) and 1993 c 390 s 1;
     (7) RCW 82.04.380 (Exemptions -- Certain corporations furnishing aid and relief) and 1961 c 15 s 82.04.380;
     (8) RCW 82.04.385 (Exemptions -- Operation of sheltered workshops) and 1988 c 176 s 915, 1988 c 13 s 1, 1972 ex.s. c 134 s 1, & 1970 ex.s. c 81 s 3;
     (9) RCW 82.04.395 (Exemptions -- Certain materials printed in school district and educational service district printing facilities) and 1979 ex.s. c 196 s 12;
     (10) RCW 82.04.397 (Exemptions -- Certain materials printed in county, city, or town printing facilities) and 1979 ex.s. c 196 s 14;
     (11) RCW 82.04.399 (Exemptions -- Sales of academic transcripts) and 1996 c 272 s 1;
     (12) RCW 82.04.408 (Exemptions -- Housing finance commission) and 1983 c 161 s 25;
     (13) RCW 82.04.415 (Exemptions -- Sand, gravel and rock taken from county or city pits or quarries, processing and handling costs) and 1965 ex.s. c 173 s 10;
     (14) RCW 82.04.418 (Exemptions -- Grants by United States government to municipal corporations or political subdivisions) and 1983 1st ex.s. c 66 s 2;
     (15) RCW 82.04.419 (Exemptions -- County, city, town, school district, or fire district activity) and 1983 1st ex.s. c 66 s 3;
     (16) RCW 82.04.4201 (Exemptions -- Sales/leasebacks by regional transit authorities) and 2000 2nd sp.s. c 4 s 24;
     (17) RCW 82.04.4251 (Exemptions -- Convention and tourism promotion) and 2006 c 310 s 1;
     (18) RCW 82.04.4291 (Deductions -- Compensation received by a political subdivision from another political subdivision for services taxable under RCW 82.04.290) and 1980 c 37 s 11;
     (19) RCW 82.04.4322 (Deductions -- Artistic or cultural organization -- Compensation from United States, state, etc., for artistic or cultural exhibitions, performances, or programs) and 1981 c 140 s 1;
     (20) RCW 82.04.4324 (Deductions -- Artistic or cultural organization -- Deduction for tax under RCW 82.04.240 -- Value of articles for use in displaying art objects or presenting artistic or cultural exhibitions, performances, or programs) and 1981 c 140 s 2;
     (21) RCW 82.04.4326 (Deductions -- Artistic or cultural organizations -- Tuition charges for attending artistic or cultural education programs) and 1981 c 140 s 3;
     (22) RCW 82.04.4327 (Deductions -- Artistic and cultural organizations -- Income from business activities) and 1985 c 471 s 6;
     (23) RCW 82.04.434 (Credit -- Public safety standards and testing) and 1991 c 13 s 1;
     (24) RCW 82.04.600 (Exemptions -- Materials printed in county, city, town, school district, educational service district, library or library district) and 1979 ex.s. c 266 s 8;
     (25) RCW 82.04.615 (Exemptions -- Certain limited purpose public corporations, commissions, and authorities) and 2007 c 381 s 1;
     (26) RCW 82.04.335 (Exemptions -- Agricultural fairs) and 1965 ex.s. c 145 s 1;
     (27) RCW 82.04.338 (Exemptions -- Hop commodity commission or hop commodity board business) and 1998 c 200 s 1;
     (28) RCW 82.04.4271 (Deductions -- Membership fees and certain service fees by nonprofit youth organization) and 1981 c 74 s 1;
     (29) RCW 82.04.640 (Exemptions -- Washington vaccine association--Certain assessments received) and 2010 c 174 s 16;
     (30) RCW 82.04.4275 (Deductions -- Child welfare services) and 2011 c 163 s 1;
     (31) RCW 82.04.655 (Exemptions -- Joint municipal utility services authorities) and 2011 c 258 s 11; and
     (32) RCW 82.04.4274 (Deductions -- Nonprofit management companies--Personnel performing on-site functions) and 2011 1st sp.s. c 26 s 1.

NEW SECTION.  Sec. 302   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2021:
     (1) RCW 82.04.2907 (Tax on royalties) and 2010 1st sp.s. c 23 s 107, 2010 c 111 s 302, 2009 c 535 s 407, 2001 c 320 s 3, & 1998 c 331 s 1;
     (2) RCW 82.04.298 (Tax on qualified grocery distribution cooperatives) and 2011 c 2 s 204 (Initiative Measure No. 1107), 2010 1st sp.s. c 23 s 511, 2008 c 49 s 1, & 2001 1st sp.s. c 9 s 1;
     (3) RCW 82.04.315 (Exemptions -- International banking facilities) and 1982 c 95 s 7;
     (4) RCW 82.04.317 (Exemptions -- Motor vehicle sales by manufacturers at wholesale auctions to dealers) and 1997 c 4 s 1;
     (5) RCW 82.04.331 (Exemptions -- Wholesale sales to farmers of seed for planting, conditioning seed for planting owned by others) and 1998 c 170 s 2;
     (6) RCW 82.04.332 (Exemptions -- Buying and selling at wholesale unprocessed milk, wheat, oats, dry peas, dry beans, lentils, triticale, canola, corn, rye, and barley) and 2007 c 131 s 1 & 1998 c 312 s 2;
     (7) RCW 82.04.333 (Exemptions -- Small harvesters) and 2011 c 101 s 4, 2007 c 48 s 5, & 1990 c 141 s 1;
     (8) RCW 82.04.334 (Exemptions -- Standing timber) and 2010 1st sp.s. c 23 s 512 & 2007 c 48 s 3;
     (9) RCW 82.04.337 (Exemptions -- Amounts received by hop growers or dealers for processed hops shipped outside the state) and 1987 c 495 s 1;
     (10) RCW 82.04.392 (Exemptions -- Mortgage brokers' third-party provider services trust accounts) and 1998 c 311 s 3 & 1997 c 106 s 21;
     (11) RCW 82.04.416 (Exemptions -- Operation of state route No. 16) and 1998 c 179 s 3;
     (12) RCW 82.04.421 (Exemptions -- Out-of-state membership sales in discount programs) and 1997 c 408 s 1;
     (13) RCW 82.04.422 (Exemptions -- Wholesale sales of motor vehicles) and 2004 c 81 s 1 & 2001 c 258 s 1;
     (14) RCW 82.04.425 (Exemptions -- Accommodation sales) and 1980 c 37 s 78, 1965 ex.s. c 173 s 9, & 1961 c 15 s 82.04.425;
     (15) RCW 82.04.4261 (Exemptions -- Federal small business innovation research program) and 2004 c 2 s 9;
     (16) RCW 82.04.4262 (Exemptions -- Federal small business technology transfer program) and 2004 c 2 s 10;
     (17) RCW 82.04.4267 (Exemptions -- Operation of parking/business improvement areas) and 2005 c 476 s 1;
     (18) RCW 82.04.4294 (Deductions -- Interest on loans to farmers and ranchers, producers or harvesters of aquatic products, or their cooperatives) and 1980 c 37 s 14;
     (19) RCW 82.04.4295 (Deductions -- Manufacturing activities completed outside the United States) and 1980 c 37 s 15;
     (20) RCW 82.04.4296 (Deductions -- Reimbursement for accommodation expenditures by funeral homes) and 1980 c 37 s 16;
     (21) RCW 82.04.433 (Deductions -- Sales of fuel for consumption outside United States' waters by vessels in foreign commerce) and 2009 c 494 s 2 & 1985 c 471 s 16;
     (22) RCW 82.04.4333 (Credit -- Job training services -- Approval) and 1996 c 1 s 4;
     (23) RCW 82.04.4339 (Deductions -- Grants to support salmon restoration) and 2004 c 241 s 1;
     (24) RCW 82.04.4451 (Credit against tax due -- Maximum credit -- Table) and 2010 1st sp.s. c 23 s 1102, 1997 c 238 s 2, & 1994 sp.s. c 2 s 1;
     (25) RCW 82.04.447 (Credit -- Natural or manufactured gas purchased by direct service industrial customers -- Reports) and 2001 c 214 s 9;
     (26) RCW 82.04.4482 (Credit -- Sales of electricity or gas to an aluminum smelter) and 2004 c 24 s 9;
     (27) RCW 82.04.4486 (Credit -- Syrup taxes paid by buyer) and 2006 c 245 s 1;
     (28) RCW 82.04.601 (Exemptions -- Affixing stamp services for cigarette sales) and 2007 c 221 s 5;
     (29) RCW 82.62.030 (Allowance of tax credits -- Limitations) and 2007 c 485 s 3, 2001 c 320 s 13, 1999 c 164 s 306, 1997 c 366 s 5, 1996 c 1 s 3, & 1986 c 116 s 17;
     (30) RCW 82.04.2403 (Manufacturer tax not applicable to cleaning fish) and 1994 c 167 s 1;
     (31) RCW 82.04.424 (Exemptions -- Certain in-state activities) and 2003 c 76 s 2;
     (32) RCW 82.04.4272 (Deductions -- Direct mail delivery charges) and 2005 c 514 s 114;
     (33) RCW 82.04.43391 (Deductions -- Commercial aircraft loan interest and fees) and 2010 1st sp.s. c 23 s 112;
     (34) RCW 82.04.645 (Exemptions -- Financial institutions -- Amounts received from certain affiliated persons) and 2011 c 174 s 102 & 2010 1st sp.s. c 23 s 110;
     (35) RCW 82.04.650 (Exemptions -- Investment conduits and securitization entities) and 2010 1st sp.s. c 23 s 111;
     (36) RCW 82.04.263 (Tax on cleaning up radioactive waste and other by-products of weapons production and nuclear research and development) and 2009 c 469 s 202 & 1996 c 112 s 3;
     (37) RCW 82.04.750 (Exemptions -- Restaurant employee meals) and 2011 c 55 s 1; and
     (38) RCW 82.04.627 (Exemptions -- Commercial airplane parts) and 2008 c 81 s 15.

NEW SECTION.  Sec. 303   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2023:
     RCW 82.04.2905 (Tax on providing day care) and 1998 c 312 s 7.

NEW SECTION.  Sec. 304   The following acts or parts of acts, as now existing or hereafter amended, are each repealed, effective July 1, 2025:
     (1) RCW 82.04.272 (Tax on warehousing and reselling prescription drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
     (2) RCW 82.04.2906 (Tax on certain chemical dependency services) and 2003 c 343 s 1;
     (3) RCW 82.04.2908 (Tax on provision of room and domiciliary care to boarding home residents) and 2005 c 514 s 302 & 2004 c 174 s 1;
     (4) RCW 82.04.324 (Exemptions -- Qualifying blood, tissue, or blood and tissue banks) and 2004 c 82 s 1 & 1995 2nd sp.s. c 9 s 3;
     (5) RCW 82.04.326 (Exemptions -- Qualified organ procurement organizations) and 2002 c 113 s 1;
     (6) RCW 82.04.327 (Exemptions -- Adult family homes) and 1987 1st ex.s. c 4 s 1;
     (7) RCW 82.04.355 (Exemptions -- Ride sharing) and 1999 c 358 s 8 & 1979 c 111 s 17;
     (8) RCW 82.04.4263 (Exemptions -- Income received by the life sciences discovery fund authority) and 2005 c 424 s 11;
     (9) RCW 82.04.4264 (Exemptions -- Nonprofit boarding homes -- Room and domiciliary care) and 2005 c 514 s 301;
     (10) RCW 82.04.4265 (Exemptions -- Comprehensive cancer centers) and 2005 c 514 s 401;
     (11) RCW 82.04.4297 (Deductions -- Compensation from public entities for health or social welfare services -- Exception) and 2011 1st sp.s. c 19 s 2, 2002 c 314 s 3, 2001 2nd sp.s. c 23 s 2, 1988 c 67 s 1, & 1980 c 37 s 17;
     (12) RCW 82.04.4311 (Deductions -- Compensation received under the federal medicare program by certain hospitals or health centers) and 2005 c 86 s 1 & 2002 c 314 s 2;
     (13) RCW 82.04.4337 (Deductions -- Certain amounts received by boarding homes) and 2004 c 174 s 7;
     (14) RCW 82.04.620 (Exemptions -- Certain prescription drugs) and 2007 c 447 s 1; and
     (15) RCW 82.04.635 (Exemptions -- Nonprofits providing legal services to low-income persons) and 2009 c 508 s 1.

Sec. 305   RCW 82.04.110 and 2009 c 535 s 405 are each amended to read as follows:
     (1) Except as otherwise provided in this section, "manufacturer" means every person who, either directly or by contracting with others for the necessary labor or mechanical services, manufactures for sale or for commercial or industrial use from his or her own materials or ingredients any articles, substances, or commodities.
     (2)(a) When the owner of equipment or facilities furnishes, or sells to the customer prior to manufacture, all or a portion of the materials that become a part or whole of the manufactured article, the department ((shall)) must prescribe equitable rules for determining tax liability.
     (b) Until July 1, 2021, a person who produces aluminum master alloys is a processor for hire rather than a manufacturer, regardless of the portion of the aluminum provided by that person's customer. For the purposes of this subsection (2)(b), "aluminum master alloy" means an alloy registered with the aluminum association as a grain refiner or a hardener alloy using the American national standards institute designating system H35.3.
     (3) A nonresident of this state who is the owner of materials processed for it in this state by a processor for hire ((shall)) may not be deemed to be engaged in business in this state as a manufacturer because of the performance of such processing work for it in this state.
     (4) The owner of materials from which a nuclear fuel assembly is made for it by a processor for hire ((shall)) is not be subject to tax under this chapter as a manufacturer of the fuel assembly.
     (5) For purposes of this section, the terms "articles," "substances," "materials," "ingredients," and "commodities" do not include digital goods.

Sec. 306   RCW 82.04.120 and 2011 c 23 s 3 are each amended to read as follows:
     (1) "To manufacture" embraces all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials so that as a result thereof a new, different or useful substance or article of tangible personal property is produced for sale or commercial or industrial use, and includes:
     (a) The production or fabrication of special made or custom made articles;
     (b) The production or fabrication of dental appliances, devices, restorations, substitutes, or other dental laboratory products by a dental laboratory or dental technician;
     (c) Cutting, delimbing, and measuring of felled, cut, or taken trees; and
     (d) Crushing and/or blending of rock, sand, stone, gravel, or ore.
     (2) "To manufacture" does not include:
     (a) Conditioning of seed for use in planting; cubing hay or alfalfa;
     (b) Activities which consist of cutting, grading, or ice glazing seafood which has been cooked, frozen, or canned outside this state;
     (c) The growing, harvesting, or producing of agricultural products;
     (d) Packing of agricultural products, including sorting, washing, rinsing, grading, waxing, treating with fungicide, packaging, chilling, or placing in controlled atmospheric storage;
     (e) The production of digital goods;
     (f) The production of computer software if the computer software is delivered from the seller to the purchaser by means other than tangible storage media, including the delivery by use of a tangible storage media where the tangible storage media is not physically transferred to the purchaser; and
     (g) Any activity that is integral to any public service business as defined in RCW 82.16.010 and with respect to which the gross income associated with such activity: (i) Is subject to tax under chapter 82.16 RCW; or (ii) would be subject to tax under chapter 82.16 RCW if such activity were conducted in this state or if not for an exemption or deduction.
     (3) Until July 1, 2021, with respect to wastewater treatment facilities:
     (a) "To manufacture" does not include the treatment of wastewater, the production of reclaimed water, and the production of class B biosolids; and
     (b) "To manufacture" does include the production of class A or exceptional quality biosolids, but only with respect to the processing activities that occur after the biosolids have reached class B standards.

Sec. 307   RCW 82.04.250 and 2010 1st sp.s. c 23 s 509 and 2010 1st sp.s. c 23 s 508 are each reenacted and amended to read as follows:
     (1) Upon every person engaging within this state in the business of making sales at retail, except persons taxable as retailers under other provisions of this chapter, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent until July 1, 2021, and 0.484 percent thereafter.
     (2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, except persons taxable under RCW 82.04.260(((10))) (11) or subsection (3) of this section, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.484 percent.
     (3) Until July 1, 2024, upon every person classified by the federal aviation administration as a federal aviation regulation part 145 certificated repair station and that is engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of .2904 percent.

Sec. 308   RCW 82.04.257 and 2010 c 111 s 301 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section, upon every person engaging within this state in the business of making sales at retail or wholesale of digital goods, digital codes, digital automated services, or services described in RCW 82.04.050 (2)(g) or (6)(b), as to such persons, the amount of tax with respect to such business is equal to the gross proceeds of sales of the business, multiplied by the rate of 0.471 percent in the case of retail sales and by the rate of 0.484 percent in the case of wholesale sales. Beginning July 1, 2021, in the case of retail sales, the rate is 0.484 percent.
     (2) Persons providing subscription television services or subscription radio services are subject to tax under RCW 82.04.290(2) on the gross income of the business received from providing such services.
     (3) For purposes of this section, a person is considered to be engaging within this state in the business of making sales of digital goods, digital codes, digital automated services, or services described in RCW 82.04.050 (2)(g) or (6)(b), if the person makes sales of digital goods, digital codes, digital automated services, or services described in RCW 82.04.050 (2)(g) or (6)(b) and the sales are sourced to this state under RCW 82.32.730 for sales tax purposes or would have been sourced to this state under RCW 82.32.730 if the sale had been taxable under chapter 82.08 RCW.
     (4) A person subject to tax under this section is subject to the mandatory electronic filing and payment requirements in RCW 82.32.080.

Sec. 309   RCW 82.04.260 and 2011 c 2 s 203 (Initiative Measure No. 1107) are each amended to read as follows:
     (1) Until July 1, 2017, 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, and through June 30, 2017, 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, and through June 30, 2017, 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)) From July 1, 2012, through June 30, 2017, 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) Until July 1, 2017, 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) Until July 1, 2021, 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) Until July 1, 2019, 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) Until July 1, 2017, 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) Until July 1, 2021, 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) Until July 1, 2021, 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) Until July 1, 2021, 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) Until July 1, 2021, 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) 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) For the purposes of this subsection (11), "commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
     (d) 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) 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) Until July 1, 2021, 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) Until July 1, 2021, 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.
     (15) Subsequent to the expiration of a tax rate under this section, the activity is subject to the rate that would otherwise apply under this chapter.

Sec. 310   RCW 82.04.280 and 2010 c 106 s 205 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of: (a) Printing materials other than newspapers, and of publishing periodicals or magazines; (b) building, repairing or improving any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (c) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (d) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (e) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW; (f) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the federal communications commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (g) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.484 percent.
     (2) For the purposes of this section, the following definitions apply unless the context clearly requires otherwise.
     (a) "Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     (b) "Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.
     (c) "Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.
     (3) The 0.484 percent tax rate applicable to subsection (1)(a), (d) and (e) of this section does not apply on or after July 1, 2021.
     (4) The 0.484 percent tax rate applicable to subsection (1)(f) of this section does not apply on or after July 1, 2017.

Sec. 311   RCW 82.04.280 and 2010 c 106 s 206 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of: (a) Printing materials other than newspapers, and of publishing periodicals or magazines; (b) building, repairing or improving any street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right-of-way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (c) extracting for hire or processing for hire, except persons taxable as extractors for hire or processors for hire under another section of this chapter; (d) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (e) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of chapter 48.17 RCW; (f) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the federal communications commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (g) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6); as to such persons, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.484 percent.
     (2) For the purposes of this section, the following definitions apply unless the context clearly requires otherwise.
     (a) "Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
     (b) "Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance. "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 is conducted.
     (c) "Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.
     (3) The 0.484 percent tax rate applicable to subsection (1)(a), (d), (e), and (f) of this section does not apply on or after July 1, 2021.

Sec. 312   RCW 82.04.290 and 2011 c 174 s 101 are each amended to read as follows:
     (1) Until July 1, 2021, upon every person engaging within this state in the business of providing international investment management services, as to such persons, the amount of tax with respect to such business ((shall be)) is equal to the gross income or gross proceeds of sales of the business multiplied by a rate of 0.275 percent.
     (2)(a) Upon every person engaging within this state in any business activity other than or in addition to an activity taxed explicitly under another section in this chapter or subsection (1) or (3) of this section; as to such persons the amount of tax on account of such activities ((shall be)) is equal to the gross income of the business multiplied by the rate of 1.5 percent.
     (b) This subsection (2) includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his or her principal or supplier to be used for informational, educational, and promotional purposes ((shall)) is not ((be)) considered a part of the agent's remuneration or commission and ((shall)) is not ((be)) subject to taxation under this section.
     (3)(a) Until July 1, 2024, upon every person engaging within this state in the business of performing aerospace product development for others, as to such persons, the amount of tax with respect to such business ((shall be)) is equal to the gross income of the business multiplied by a rate of 0.9 percent.
     (b) "Aerospace product development" has the meaning as provided in RCW 82.04.4461.

Sec. 313   RCW 82.62.020 and 2007 c 485 s 2 are each amended to read as follows:
     Application for tax credits under this chapter must be made within ninety consecutive days after the first qualified employment position is filled. The application ((shall)) must be made to the department in a form and manner prescribed by the department. The application ((shall)) must contain information regarding the location of the business project, the applicant's average employment, if any, at the facility for the four consecutive full calendar quarters immediately preceding the earlier of the calendar quarter during which the application required by this section is submitted to the department or the first qualified employment position is filled, estimated or actual new employment related to the project, estimated or actual wages of employees related to the project, estimated or actual costs, time schedules for completion and operation, and other information required by the department. The department ((shall)) must prescribe a method for calculating a seasonal employer's average employment levels. The department ((shall)) must rule on the application within sixty days. The department may not accept applications after June 30, 2021.

Sec. 314   RCW 82.73.020 and 2005 c 514 s 903 are each amended to read as follows:
     (1) Application for tax credits under this chapter must be made to the department before making a contribution to a program or the main street trust fund. The application ((shall)) must be made to the department in a form and manner prescribed by the department. The application ((shall)) must contain information regarding the proposed amount of contribution to a program or the main street trust fund, and other information required by the department to determine eligibility under chapter 514, Laws of 2005. The department ((shall)) must rule on the application within forty-five days. Applications ((shall)) must be approved on a first-come basis.
     (2) The person must make the contribution described in the approved application by the end of the calendar year in which the application is approved to claim a credit allowed under RCW 82.73.030.
     (3) The department ((shall)) may not accept any applications before January 1, 2006, or after June 30, 2017.

Sec. 315   RCW 82.04.540 and 2006 c 301 s 1 are each amended to read as follows:
     (1) The provision of professional employer services by a professional employer organization is taxable under RCW 82.04.290(2).
     (2) Until July 1, 2021, a professional employer organization is allowed a deduction from the gross income of the business derived from performing professional employer services that is equal to the portion of the fee charged to a client that represents the actual cost of wages and salaries, benefits, workers' compensation, payroll taxes, withholding, or other assessments paid to or on behalf of a covered employee by the professional employer organization under a professional employer agreement.
     (3) For the purposes of this section, the following definitions apply:
     (a) "Client" means any person who enters into a professional employer agreement with a professional employer organization. For purposes of this subsection (3)(a), "person" has the same meaning as "buyer" in RCW 82.08.010.
     (b) "Coemployer" means either a professional employer organization or a client.
     (c) "Coemployment relationship" means a relationship which is intended to be an ongoing relationship rather than a temporary or project-specific one, wherein the rights, duties, and obligations of an employer which arise out of an employment relationship have been allocated between coemployers pursuant to a professional employer agreement and applicable state law. In such a coemployment relationship:
     (i) The professional employer organization is entitled to enforce only such employer rights and is subject to only those obligations specifically allocated to the professional employer organization by the professional employer agreement or applicable state law;
     (ii) The client is entitled to enforce those rights and obligated to provide and perform those employer obligations allocated to such client by the professional employer agreement and applicable state law; and
     (iii) The client is entitled to enforce any right and obligated to perform any obligation of an employer not specifically allocated to the professional employer organization by the professional employer agreement or applicable state law.
     (d) "Covered employee" means an individual having a coemployment relationship with a professional employer organization and a client who meets all of the following criteria: (i) The individual has received written notice of coemployment with the professional employer organization, and (ii) the individual's coemployment relationship is pursuant to a professional employer agreement. Individuals who are officers, directors, shareholders, partners, and managers of the client are covered employees to the extent the professional employer organization and the client have expressly agreed in the professional employer agreement that such individuals would be covered employees and provided such individuals meet the criteria of this subsection and act as operational managers or perform day-to-day operational services for the client.
     (e) "Professional employer agreement" means a written contract by and between a client and a professional employer organization that provides:
     (i) For the coemployment of covered employees; and
     (ii) For the allocation of employer rights and obligations between the client and the professional employer organization with respect to the covered employees.
     (f) "Professional employer organization" means any person engaged in the business of providing professional employer services. The following ((shall)) are not ((be)) deemed to be professional employer organizations or the providing of professional employer services for purposes of this section:
     (i) Arrangements wherein a person, whose principal business activity is not entering into professional employer arrangements and which does not hold itself out as a professional employer organization, shares employees with a commonly owned company within the meaning of ((section)) 26 U.S.C. Sec. 414(b) and (c) of the internal revenue code of 1986, as amended;
     (ii) Independent contractor arrangements by which a person assumes responsibility for the product produced or service performed by such person or his or her agents and retains and exercises primary direction and control over the work performed by the individuals whose services are supplied under such arrangements; or
     (iii) Providing staffing services.
     (g) "Professional employer services" means the service of entering into a coemployment relationship with a client in which all or a majority of the employees providing services to a client or to a division or work unit of a client are covered employees.
     (h) "Staffing services" means services consisting of a person:
     (i) Recruiting and hiring its own employees;
     (ii) Finding other organizations that need the services of those employees;
     (iii) Assigning those employees on a temporary basis to perform work at or services for the other organizations to support or supplement the other organizations' workforces, or to provide assistance in special work situations such as, but not limited to, employee absences, skill shortages, seasonal workloads, or to perform special assignments or projects, all under the direction and supervision of the customer; and
     (iv) Customarily attempting to reassign the employees to other organizations when they finish each assignment.

NEW SECTION.  Sec. 401   A new section is added to chapter 43.88 RCW to read as follows:
     (1) Omnibus operating appropriations bills proposed by the governor and enacted by the legislature must include:
     (a) A tax expenditure report listing all state tax expenditures scheduled to expire during the current or next biennium, together with an estimate of the state revenue impact associated with each state tax expenditure and any recommendation by the joint legislative audit and review committee regarding the continuance or modification of the tax expenditure; and
     (b) A total estimated revenue impact statement detailing all state tax expenditures scheduled to expire during the current or next biennium, including state tax expenditures where the expiration date is assumed to be extended, and total appropriations. The requirements under this subsection (1)(b) may be satisfied by incorporating tax expenditures into the balance sheet summary specifying resource changes.
     (2) The sections described in subsection (1) of this section must be stated in part I of the omnibus operating appropriations bill and the appropriations bill summary document.
     (3) For the purposes of this section, "state tax expenditure" has the same meaning as "tax preference" as defined in RCW 43.136.021, that impacts revenues appropriated in the omnibus operating appropriations bill.

Sec. 402   RCW 43.06.400 and 2011 1st sp.s. c 20 s 201 are each amended to read as follows:
     (1) ((Beginning in January 1984, and in January of every fourth year thereafter)) Biennially, the department of revenue must ((submit to the legislature prior to the regular session)) prepare a listing of the amount of reduction for the current and next biennium in the revenues of the state or the revenues of local government collected by the state as a result of tax ((exemptions)) expenditures. The listing must include an estimate of the revenue lost from the tax ((exemption)) expenditure, the purpose of the tax ((exemption)) expenditure, the persons, organizations, or parts of the population which benefit from the tax ((exemption)) expenditure, and whether or not the tax ((exemption)) expenditure conflicts with another state program. The listing must include but not be limited to the following revenue sources:
     (a) Real and personal property tax exemptions under Title 84 RCW;
     (b) Business and occupation tax exemptions, deductions, and credits under chapter 82.04 RCW;
     (c) Retail sales and use tax exemptions under chapters 82.08, 82.12, and 82.14 RCW;
     (d) Public utility tax exemptions and deductions under chapter 82.16 RCW;
     (e) Food fish and shellfish tax exemptions under chapter 82.27 RCW;
     (f) Leasehold excise tax exemptions under chapter 82.29A RCW;
     (g) Motor vehicle and special fuel tax exemptions and refunds under chapters 82.36 and 82.38 RCW;
     (h) Aircraft fuel tax exemptions under chapter 82.42 RCW;
     (i) Motor vehicle excise tax exclusions under chapter 82.44 RCW; and
     (j) Insurance premiums tax exemptions under chapter 48.14 RCW.
     (2) The department of revenue must prepare the listing required by this section with the assistance of any other agencies or departments as may be required.
     (3) The department of revenue must ((present the listing to the ways and means committees of each house in public hearings)) submit the listing to the governor at the time biennial budget requests are due under RCW 43.88.030.
     (4) ((Beginning in January 1984, and every four years thereafter)) The governor is requested to review the report from the department of revenue and ((may submit)) prepare the section or sections as required under section 401 of this act. The governor also may submit other recommendations to the legislature with respect to the repeal or modification of any tax ((exemption)) expenditure. The ((ways and means)) fiscal committees of each house and the appropriate standing committee of each house must hold public hearings and take appropriate action on the recommendations submitted by the governor.
     (5) As used in this section, "tax ((exemption)) expenditure" means an exemption, exclusion, or deduction from the base of a tax; a credit against a tax; a deferral of a tax; or a preferential tax rate.
     (6) For purposes of the listing due in January 2012, the department of revenue does not have to prepare or update the listing with respect to any tax exemption that would not be likely to increase state revenue if the exemption was repealed or otherwise eliminated.

Sec. 403   RCW 43.88.030 and 2006 c 334 s 43 are each amended to read as follows:
     (1) The director of financial management ((shall)) must provide all agencies with a complete set of instructions for submitting biennial budget requests to the director at least three months before agency budget documents are due into the office of financial management. The budget document or documents ((shall)) must consist of the governor's budget message, which ((shall)) must be explanatory of the budget and ((shall)) must contain an outline of the proposed financial policies of the state for the ensuing fiscal period, as well as an outline of the proposed six-year financial policies where applicable, and ((shall)) must describe in connection therewith the important features of the budget. The biennial budget document or documents ((shall)) must also describe performance indicators that demonstrate measurable progress towards priority results. The message ((shall)) must set forth the reasons for salient changes from the previous fiscal period in expenditure and revenue items and shall explain any major changes in financial policy. Attached to the budget message ((shall)) must be such supporting schedules, exhibits and other explanatory material in respect to both current operations and capital improvements as the governor ((shall)) deems to be useful to the legislature. The budget document or documents ((shall)) must set forth a proposal for expenditures in the ensuing fiscal period, or six-year period where applicable, based upon the estimated revenues and caseloads as approved by the economic and revenue forecast council and caseload forecast council or upon the estimated revenues and caseloads of the office of financial management for those funds, accounts, sources, and programs for which the forecast councils do not prepare an official forecast. Revenues ((shall)) must be estimated for such fiscal period from the source and at the rates existing by law at the time of submission of the budget document, including the supplemental budgets submitted in the even-numbered years of a biennium. However, the estimated revenues and caseloads for use in the governor's budget document may be adjusted to reflect budgetary revenue transfers and revenue and caseload estimates dependent upon budgetary assumptions of enrollments, workloads, and caseloads. All adjustments to the approved estimated revenues and caseloads must be set forth in the budget document. The governor may additionally submit, as an appendix to each supplemental, biennial, or six-year agency budget or to the budget document or documents, a proposal for expenditures in the ensuing fiscal period from revenue sources derived from proposed changes in existing statutes.
     (2) The budget document or documents ((shall)) must also contain:
     (a) Revenues classified by fund and source for the immediately past fiscal period, those received or anticipated for the current fiscal period, and those anticipated for the ensuing biennium;
     (b) The report and statement required under section 401 of this act;
     (c) The undesignated fund balance or deficit, by fund;
     (((c))) (d) Such additional information dealing with expenditures, revenues, workload, performance, and personnel as the legislature may direct by law or concurrent resolution;
     (((d))) (e) Such additional information dealing with revenues and expenditures as the governor ((shall)) deems pertinent and useful to the legislature;
     (((e))) (f) Tabulations showing expenditures classified by fund, function, and agency;
     (((f))) (g) The expenditures that include nonbudgeted, nonappropriated accounts outside the state treasury;
     (((g))) (h) Identification of all proposed direct expenditures to implement the Puget Sound water quality plan under chapter 90.71 RCW, shown by agency and in total; and
     (((h))) (i) Tabulations showing each postretirement adjustment by retirement system established after fiscal year 1991, to include, but not be limited to, estimated total payments made to the end of the previous biennial period, estimated payments for the present biennium, and estimated payments for the ensuing biennium.
     (((2))) (3) The budget document or documents ((shall)) must include detailed estimates of all anticipated revenues applicable to proposed operating or capital expenditures and ((shall)) must also include all proposed operating or capital expenditures. The total of beginning undesignated fund balance and estimated revenues less working capital and other reserves ((shall)) must equal or exceed the total of proposed applicable expenditures. The budget document or documents ((shall)) must further include:
     (a) Interest, amortization and redemption charges on the state debt;
     (b) Payments of all reliefs, judgments, and claims;
     (c) Other statutory expenditures;
     (d) Expenditures incident to the operation for each agency;
     (e) Revenues derived from agency operations;
     (f) Expenditures and revenues ((shall)) must be given in comparative form showing those incurred or received for the immediately past fiscal period and those anticipated for the current biennium and next ensuing biennium;
     (g) A showing and explanation of amounts of general fund and other funds obligations for debt service and any transfers of moneys that otherwise would have been available for appropriation;
     (h) Common school expenditures on a fiscal-year basis;
     (i) A showing, by agency, of the value and purpose of financing contracts for the lease/purchase or acquisition of personal or real property for the current and ensuing fiscal periods; and
     (j) A showing and explanation of anticipated amounts of general fund and other funds required to amortize the unfunded actuarial accrued liability of the retirement system specified under chapter 41.45 RCW, and the contributions to meet such amortization, stated in total dollars and as a level percentage of total compensation.
     (((3))) (4) The governor's operating budget document or documents ((shall)) must reflect the statewide priorities as required by RCW 43.88.090.
     (((4))) (5) The governor's operating budget document or documents ((shall)) must identify activities that are not addressing the statewide priorities.
     (((5))) (6) A separate capital budget document or schedule ((shall)) must be submitted that ((will)) contains the following:
     (a) A statement setting forth a long-range facilities plan for the state that identifies and includes the highest priority needs within affordable spending levels;
     (b) A capital program consisting of proposed capital projects for the next biennium and the two biennia succeeding the next biennium consistent with the long-range facilities plan. Insomuch as is practical, and recognizing emergent needs, the capital program ((shall)) must reflect the priorities, projects, and spending levels proposed in previously submitted capital budget documents in order to provide a reliable long-range planning tool for the legislature and state agencies;
     (c) A capital plan consisting of proposed capital spending for at least four biennia succeeding the next biennium;
     (d) A strategic plan for reducing backlogs of maintenance and repair projects. The plan ((shall)) must include a prioritized list of specific facility deficiencies and capital projects to address the deficiencies for each agency, cost estimates for each project, a schedule for completing projects over a reasonable period of time, and identification of normal maintenance activities to reduce future backlogs;
     (e) A statement of the reason or purpose for a project;
     (f) Verification that a project is consistent with the provisions set forth in chapter 36.70A RCW;
     (g) A statement about the proposed site, size, and estimated life of the project, if applicable;
     (h) Estimated total project cost;
     (i) For major projects valued over five million dollars, estimated costs for the following project components: Acquisition, consultant services, construction, equipment, project management, and other costs included as part of the project. Project component costs ((shall)) must be displayed in a standard format defined by the office of financial management to allow comparisons between projects;
     (j) Estimated total project cost for each phase of the project as defined by the office of financial management;
     (k) Estimated ensuing biennium costs;
     (l) Estimated costs beyond the ensuing biennium;
     (m) Estimated construction start and completion dates;
     (n) Source and type of funds proposed;
     (o) Estimated ongoing operating budget costs or savings resulting from the project, including staffing and maintenance costs;
     (p) For any capital appropriation requested for a state agency for the acquisition of land or the capital improvement of land in which the primary purpose of the acquisition or improvement is recreation or wildlife habitat conservation, the capital budget document, or an omnibus list of recreation and habitat acquisitions provided with the governor's budget document, ((shall)) must identify the projected costs of operation and maintenance for at least the two biennia succeeding the next biennium. Omnibus lists of habitat and recreation land acquisitions ((shall)) must include individual project cost estimates for operation and maintenance as well as a total for all state projects included in the list. The document ((shall)) must identify the source of funds from which the operation and maintenance costs are proposed to be funded;
     (q) Such other information bearing upon capital projects as the governor deems to be useful;
     (r) Standard terms, including a standard and uniform definition of normal maintenance, for all capital projects;
     (s) Such other information as the legislature may direct by law or concurrent resolution.
     (7) For purposes of ((this)) subsection (((5))) (6) of this section, the term "capital project" ((shall)) must be defined subsequent to the analysis, findings, and recommendations of a joint committee comprised of representatives from the house capital appropriations committee, senate ways and means committee, legislative evaluation and accountability program committee, and office of financial management.
     (((6))) (8) No change affecting the comparability of agency or program information relating to expenditures, revenues, workload, performance and personnel ((shall)) may be made in the format of any budget document or report presented to the legislature under this section or RCW 43.88.160(1) relative to the format of the budget document or report which was presented to the previous regular session of the legislature during an odd-numbered year without prior legislative concurrence. Prior legislative concurrence ((shall)) must consist of (a) a favorable majority vote on the proposal by the standing committees on ways and means of both houses if the legislature is in session or (b) a favorable majority vote on the proposal by members of the legislative evaluation and accountability program committee if the legislature is not in session.

Sec. 501   RCW 82.32.585 and 2011 c 23 s 6 are each amended to read as follows:
     (1)(a) Unless the department extends the due date as provided in RCW 82.32.590, every person claiming a tax preference that requires a survey under this section must file a complete annual survey with the department by the due date as provided in (b) of this subsection.
     (b)(i) Except as provided in (((a))) (b)(ii) of this subsection, the survey is due by April 30th of the year following any calendar year in which a person becomes eligible to claim the tax preference that requires a survey under this section. If a person remains eligible to claim a tax preference in subsequent calendar years, the person must file additional surveys by April 30th of each year following each calendar year that the person remains eligible to claim the tax preference.
     (ii) If the tax preference is a deferral of tax, the first survey must be filed by April 30th of the calendar year following the calendar year in which the investment project is certified by the department as operationally complete, and a survey must be filed by April 30th of each of the seven succeeding calendar years.
     (((b) The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590.))
     (2)(((a))) The survey must include information as required in this subsection for the calendar year preceding the calendar year in which the survey is due.
     (a)(i) The amount of the tax preference claimed ((for the calendar year covered by)) must be reported on the survey.
     (ii) For a person that claimed an exemption provided in RCW 82.08.025651 or 82.12.025651, the survey must include the amount of tax exempted under those sections in the prior calendar year for each general area or category of research and development for which exempt machinery and equipment and labor and services were acquired in the prior calendar year.
     (b) The survey must also include the following information for employment positions in Washington, not to include names of employees((, for the year that the tax preference was claimed)):
     (i) The number of total employment positions;
     (ii) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (iii) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (iv) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (c) For persons claiming the tax preference provided under chapter 82.60 or 82.63 RCW, the survey must also include the number of new products or research projects by general classification, and the number of trademarks, patents, and copyrights associated with activities at the investment project.
     (d) For persons claiming the credit provided under RCW 82.04.4452, the survey must also include the qualified research and development expenditures ((during the calendar year for which the credit was claimed)), the taxable amount ((during the calendar year for which the credit was claimed)), the number of new products or research projects by general classification, the number of trademarks, patents, and copyrights associated with the research and development activities for which the credit was claimed, and whether the tax preference has been assigned, and who assigned the credit. The definitions in RCW 82.04.4452 apply to this subsection (2)(d).
     (e) For persons claiming the tax exemption in RCW 82.08.025651 or 82.12.025651, the survey must also include the general areas or categories of research and development for which machinery and equipment and labor and services were acquired, exempt from tax under RCW 82.08.025651 or 82.12.025651((, in the prior calendar year)).
     (f) If the person filing a survey under this section did not file a survey under this section with the department in the previous calendar year, the survey filed under this section must also include the employment, wage, and benefit information required under (b)(i) through (iv) of this subsection for the calendar year immediately preceding the calendar year for which a tax preference was claimed.
     (3) As part of the annual survey, the department may request additional information necessary to measure the results of, or determine eligibility for, the tax preference.
     (4)(a) All information collected under this section, except the information required in subsection (2)(a) of this section, is deemed taxpayer information under RCW 82.32.330. Information required in subsection (2)(a) of this section is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request, except as provided in subsection (5) of this section.
     (b) If the amount of the tax preference claimed as reported on the survey is different than the amount actually claimed or otherwise allowed by the department based on the taxpayer's excise tax returns or other information known to the department, the amount actually claimed or allowed may be disclosed.
     (5) Persons for whom the actual amount of the tax reduced or saved is less than ten thousand dollars during the period covered by the survey ((may request the department to treat the amount of the tax reduction or savings as confidential under RCW 82.32.330)) are not required to file an annual survey for the period.
     (6)(a) Except as otherwise provided by law, if a person claims a tax preference that requires an annual survey under this section but fails to submit a complete annual survey by the due date of the survey or any extension under RCW 82.32.590, the department must declare the amount of the tax preference claimed for the previous calendar year to be immediately due. If the tax preference is a deferral of tax, twelve and one-half percent of the deferred tax is immediately due. If the economic benefits of the deferral are passed to a lessee, the lessee is responsible for payment to the extent the lessee has received the economic benefit.
     (b) The department must assess interest, but not penalties, on the amounts due under this subsection. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and accrues until the taxes for which the tax preference was claimed are repaid. Amounts due under this subsection are not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
     (7) The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers may be included in any category. The department must report ((these)) summary descriptive statistics to the legislature each year by ((October)) December 1st.
     (8) For the purposes of this section:
     (a) "Person" has the meaning provided in RCW 82.04.030 and also includes the state and its departments and institutions.
     (b) "Tax preference" has the meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a survey under this section.

NEW SECTION.  Sec. 502   RCW 82.32.534 (Annual report requirement for tax preferences) and 2010 c 114 s 103 are each repealed.

NEW SECTION.  Sec. 503   A new section is added to chapter 82.32 RCW to read as follows:
     For the purposes of this title and Title 84 RCW, "annual report" means the annual survey required under RCW 82.32.585.

NEW SECTION.  Sec. 601   A new section is added to chapter 43.135 RCW to read as follows:
     (1) Any bill enacted by the legislature that adopts a new tax preference or expands or extends an existing tax preference must include a statement of legislative intent, providing the policy goals and any related metrics that provide context or data for the purpose of reviewing the preference under chapter 43.136 RCW.
     (2) For purposes of this section, "tax preference" has the same meaning as in RCW 43.136.021.

Sec. 701   RCW 82.08.820 and 2011 c 174 s 206 are each amended to read as follows:
     (1) Wholesalers or third-party warehousers who own or operate warehouses or grain elevators and retailers who own or operate distribution centers, and who have paid the tax levied by RCW 82.08.020 on:
     (a) Material-handling and racking equipment, and labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment; or
     (b) Construction of a warehouse or grain elevator, including materials, and including service and labor costs,
are eligible for an exemption in the form of a remittance. The amount of the remittance is computed under subsection (((3))) (4) of this section and is based on the state share of sales tax.
     (2) A person claiming the exemption from state tax under this section or RCW 82.12.820 must file a complete annual survey with the department under RCW 82.32.585. Notwithstanding RCW 82.32.585(1)(b)(i), a survey due under this section in 2012 must be submitted by October 31st.
     (3) For purposes of this section and RCW 82.12.820:
     (a) "Agricultural products" has the meaning given in RCW 82.04.213;
     (b) "Construction" means the actual construction of a warehouse or grain elevator that did not exist before the construction began. "Construction" includes expansion if the expansion adds at least two hundred thousand square feet of additional space to an existing warehouse or additional storage capacity of at least one million bushels to an existing grain elevator. "Construction" does not include renovation, remodeling, or repair;
     (c) "Department" means the department of revenue;
     (d) "Distribution center" means a warehouse that is used exclusively by a retailer solely for the storage and distribution of finished goods to retail outlets of the retailer. "Distribution center" does not include a warehouse at which retail sales occur;
     (e) "Finished goods" means tangible personal property intended for sale by a retailer or wholesaler. "Finished goods" does not include agricultural products stored by wholesalers, third-party warehouses, or retailers if the storage takes place on the land of the person who produced the agricultural product. "Finished goods" does not include logs, minerals, petroleum, gas, or other extracted products stored as raw materials or in bulk;
     (f) "Grain elevator" means a structure used for storage and handling of grain in bulk;
     (g) "Material-handling equipment and racking equipment" means equipment in a warehouse or grain elevator that is primarily used to handle, store, organize, convey, package, or repackage finished goods. The term includes tangible personal property with a useful life of one year or more that becomes an ingredient or component of the equipment, including repair and replacement parts. The term does not include equipment in offices, lunchrooms, restrooms, and other like space, within a warehouse or grain elevator, or equipment used for nonwarehousing purposes. "Material-handling equipment" includes but is not limited to: Conveyers, carousels, lifts, positioners, pick-up-and-place units, cranes, hoists, mechanical arms, and robots; mechanized systems, including containers that are an integral part of the system, whose purpose is to lift or move tangible personal property; and automated handling, storage, and retrieval systems, including computers that control them, whose purpose is to lift or move tangible personal property; and forklifts and other off-the-road vehicles that are used to lift or move tangible personal property and that cannot be operated legally on roads and streets. "Racking equipment" includes, but is not limited to, conveying systems, chutes, shelves, racks, bins, drawers, pallets, and other containers and storage devices that form a necessary part of the storage system;
     (h) "Person" has the meaning given in RCW 82.04.030;
     (i) "Retailer" means a person who makes "sales at retail" as defined in chapter 82.04 RCW of tangible personal property;
     (j) "Square footage" means the product of the two horizontal dimensions of each floor of a specific warehouse. The entire footprint of the warehouse ((shall)) must be measured in calculating the square footage, including space that juts out from the building profile such as loading docks. "Square footage" does not mean the aggregate of the square footage of more than one warehouse at a location or the aggregate of the square footage of warehouses at more than one location;
     (k) "Third-party warehouser" means a person taxable under RCW 82.04.280(1)(d);
     (l) "Warehouse" means an enclosed building or structure in which finished goods are stored. A warehouse building or structure may have more than one storage room and more than one floor. Office space, lunchrooms, restrooms, and other space within the warehouse and necessary for the operation of the warehouse are considered part of the warehouse as are loading docks and other such space attached to the building and used for handling of finished goods. Landscaping and parking lots are not considered part of the warehouse. A storage yard is not a warehouse, nor is a building in which manufacturing takes place; and
     (m) "Wholesaler" means a person who makes "sales at wholesale" as defined in chapter 82.04 RCW of tangible personal property, but "wholesaler" does not include a person who makes sales exempt under RCW 82.04.330.
     (((3))) (4)(a) A person claiming an exemption from state tax in the form of a remittance under this section must pay the tax imposed by RCW 82.08.020. The buyer may then apply to the department for remittance of all or part of the tax paid under RCW 82.08.020. For grain elevators with bushel capacity of one million but less than two million, the remittance is equal to fifty percent of the amount of tax paid. For warehouses with square footage of two hundred thousand or more and for grain elevators with bushel capacity of two million or more, the remittance is equal to one hundred percent of the amount of tax paid for qualifying construction, materials, service, and labor, and fifty percent of the amount of tax paid for qualifying material-handling equipment and racking equipment, and labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment.
     (b) The department ((shall)) must determine eligibility under this section based on information provided by the buyer and through audit and other administrative records. The buyer ((shall)) must on a quarterly basis submit an information sheet, in a form and manner as required by the department by rule, specifying the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The buyer shall retain, in adequate detail to enable the department to determine whether the equipment or construction meets the criteria under this section: Invoices; proof of tax paid; documents describing the material-handling equipment and racking equipment; location and size of warehouses and grain elevators; and construction invoices and documents.
     (c) The department ((shall)) must on a quarterly basis remit exempted amounts to qualifying persons who submitted applications during the previous quarter.
     (((4))) (5) Warehouses, grain elevators, and material-handling equipment and racking equipment for which an exemption, credit, or deferral has been or is being received under chapter 82.60, 82.62, or 82.63 RCW or RCW 82.08.02565 or 82.12.02565 are not eligible for any remittance under this section. Warehouses and grain elevators upon which construction was initiated before May 20, 1997, are not eligible for a remittance under this section.
     (((5))) (6) The lessor or owner of a warehouse or grain elevator is not eligible for a remittance under this section unless the underlying ownership of the warehouse or grain elevator and the material-handling equipment and racking equipment vests exclusively in the same person, or unless the lessor by written contract agrees to pass the economic benefit of the remittance to the lessee in the form of reduced rent payments.

Sec. 702   RCW 82.12.820 and 2006 c 354 s 13 are each amended to read as follows:
     (1) Wholesalers or third-party warehousers who own or operate warehouses or grain elevators, and retailers who own or operate distribution centers, and who have paid the tax levied under RCW 82.12.020 on:
     (a) Material-handling equipment and racking equipment and labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment; or
     (b) Materials incorporated in the construction of a warehouse or grain elevator, are eligible for an exemption on tax paid in the form of a remittance or credit against tax owed. The amount of the remittance or credit is computed under subsection (((2))) (3) of this section and is based on the state share of use tax.
     (2) A person claiming the exemption from state tax as provided under this section must file a complete annual survey with the department as required under RCW 82.08.820.
     (3)(a) A person claiming an exemption from state tax in the form of a remittance under this section must pay the tax imposed by RCW 82.12.020 to the department. The person may then apply to the department for remittance of all or part of the tax paid under RCW 82.12.020. For grain elevators with bushel capacity of one million but less than two million, the remittance is equal to fifty percent of the amount of tax paid. For warehouses with square footage of two hundred thousand or more and for grain elevators with bushel capacity of two million or more, the remittance is equal to one hundred percent of the amount of tax paid for qualifying construction materials, and fifty percent of the amount of tax paid for qualifying material-handling equipment and racking equipment.
     (b) The department shall determine eligibility under this section based on information provided by the buyer and through audit and other administrative records. The buyer shall on a quarterly basis submit an information sheet, in a form and manner as required by the department by rule, specifying the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The buyer shall retain, in adequate detail to enable the department to determine whether the equipment or construction meets the criteria under this section: Invoices; proof of tax paid; documents describing the material-handling equipment and racking equipment; location and size of warehouses, if applicable; and construction invoices and documents.
     (c) The department shall on a quarterly basis remit or credit exempted amounts to qualifying persons who submitted applications during the previous quarter.
     (((3))) (4) Warehouse, grain elevators, and material-handling equipment and racking equipment for which an exemption, credit, or deferral has been or is being received under chapter 82.60, 82.62, or 82.63 RCW or RCW 82.08.02565 or 82.12.02565 are not eligible for any remittance under this section. Materials incorporated in warehouses and grain elevators upon which construction was initiated prior to May 20, 1997, are not eligible for a remittance under this section.
     (((4))) (5) The lessor or owner of the warehouse or grain elevator is not eligible for a remittance or credit under this section unless the underlying ownership of the warehouse or grain elevator and material-handling equipment and racking equipment vests exclusively in the same person, or unless the lessor by written contract agrees to pass the economic benefit of the exemption to the lessee in the form of reduced rent payments.
     (((5))) (6) The definitions in RCW 82.08.820 apply to this section.

NEW SECTION.  Sec. 703   Part VII of this act applies to annual surveys due in 2012 and thereafter.

NEW SECTION.  Sec. 801   If section 311 of this act takes effect, section 310 of this act expires on the date section 311 of this act takes effect.

NEW SECTION.  Sec. 802   Parts VI and VII of this act take effect July 1, 2012.

NEW SECTION.  Sec. 803   (1) The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation.
     (2) Pursuant to RCW 29A.79.040, the statement of subject on the ballot title shall read: "The legislature has passed House Bill No. ...., concerning reform of tax preferences to provide more transparency and accountability." The concise description on the ballot title shall read: "This bill would provide transparency and accountability to the tax code by periodically expiring tax preferences and using revenue from expired tax preferences to fund education and health services."