BILL REQ. #:  H-0731.2 

Read first time 03/23/11.   Referred to Committee on Ways & Means.

     BE IT RESOLVED, BY THE SENATE AND HOUSE OF REPRESENTATIVES OF THE STATE OF WASHINGTON, IN LEGISLATIVE SESSION ASSEMBLED:
     THAT, At the next general election to be held in this state the secretary of state shall submit to the qualified voters of the state for their approval and ratification, or rejection, an amendment to Article VII, section 1 of the Constitution of the state of Washington to read as follows:

     Article VII, section 1. (1) The power of taxation shall never be suspended, surrendered or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word "property" as used herein shall mean and include everything, except for the net income of a corporation, whether tangible or intangible, subject to ownership. All real estate shall constitute one class: Provided, That the legislature may tax mines and mineral resources and lands devoted to reforestation by either a yield tax or an ad valorem tax at such rate as it may fix, or by both. Such property as the legislature may by general laws provide shall be exempt from taxation. Property of the United States and of the state, counties, school districts and other municipal corporations, and credits secured by property actually taxed in this state, not exceeding in value the value of such property, shall be exempt from taxation. The legislature shall have power, by appropriate legislation, to exempt personal property to the amount of three thousand ($3,000.00) dollars for each head of a family liable to assessment and taxation under the provisions of the laws of this state of which the individual is the actual bona fide owner.
     (2) Beginning January 1, 2015, the legislature may tax the net income of corporations. For municipal and nonprofit corporations, only the net income derived from proprietary activities may be taxed. The legislature may not tax the net income of individuals. The rate of tax on net income may not exceed seven percent. Unless the legislature enacts a net income tax preference or tax threshold provision: (a) The rate of tax must be uniform for all corporations subject to tax; and (b) the determination of net income must be consistent with the tax laws of the United States. The legislature may provide that amendments to the laws of the United States become the law of this state upon the amendments becoming the law of the United States. The legislature shall approve a net income tax preference or tax threshold provision by at least sixty percent of the members in each house of the legislature. The legislature may not enact a net income tax preference that extends for more than ten years; however, the legislature may approve the extension of a tax preference for additional periods that do exceed ten years if approved by at least sixty percent of the members in each house of the legislature. Upon a declaration of fiscal emergency by the governor, the legislature may tax net income at an additional rate not to exceed three percent of net income; however, the legislature shall authorize the additional tax rate only during a regular session of an odd-numbered year and shall not impose the additional tax rate after the end of the next ensuing fiscal biennium. The legislature may not vest counties, cities, towns, or other municipal corporations with the authority to impose a net income tax.
     (3) Beginning January 1, 2015, the legislature may not impose a state gross receipts tax on businesses and occupations.
     (4) Beginning January 1, 2015:
     (a) The legislature may not impose a state sales and use tax at a rate exceeding seven percent;
     (b) No geographic location in this state is subject to a cumulative state and municipal sales and use tax rate that exceeds ten percent; and
     (c) The legislature may not enact a sales and use tax exemption unless the exemption is approved by at least sixty percent of the members in each house of the legislature.
     (5) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Corporation" means a: (i) Corporation described in Article XII of this Constitution; (ii) municipal corporation; or (iii) nonprofit corporation.
     (b) "Proprietary activity" means an activity commonly in competition with private, for-profit business activity.
     (c) "Tax preference" means a tax exemption, exclusion, deduction, credit, deferral, or reduced tax rate, that is not available to all corporations. "Tax preference" does not include the exclusion of all municipal corporations, or all nonprofit corporations, from a tax on net income.
     (d) "Tax threshold provision" means a tax exemption, exclusion, deduction, credit, deferral, or reduced tax rate, that is not based on a specific source of income, source of expense, or type of activity.

     BE IT FURTHER RESOLVED, That the secretary of state shall cause notice of this constitutional amendment to be published at least four times during the four weeks next preceding the election in every legal newspaper in the state.