BILL REQ. #:  Z-0925.1 

Read first time 01/13/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to improving the business climate in this state by simplifying state and local tax and licensing systems; amending RCW 35.102.020, 35.102.030, 35.102.040, 35.102.050, 35.102.120, 35.102.140, 35.102.160, 35.102.130, 82.14A.020, 82.04.462, 15.13.250, 15.13.250, 15.13.280, 15.13.290, 15.49.011, 15.49.380, 15.49.390, 15.54.275, 15.58.180, 15.58.235, 18.44.031, 18.64.044, 19.02.010, 19.02.030, 19.02.035, 19.02.070, 19.02.075, 19.02.080, 19.02.085, 19.02.090, 19.02.100, 19.02.110, 19.02.115, 19.02.210, 19.02.310, 19.02.800, 19.02.890, 19.80.010, 19.80.075, 19.94.2582, 35.21.392, 35.21.392, 35A.21.340, 36.110.130, 43.22.035, 46.72A.020, 50.12.290, 59.30.050, 59.30.090, 69.25.050, 69.25.060, 70.290.030, 76.48.121, 82.24.510, 82.24.520, 82.26.150, 90.76.010, 90.76.020, 82.04.060, 82.04.230, 82.04.240, 82.04.255, 82.04.260, 82.04.280, 82.04.285, 82.04.290, 35.102.150, 48.14.080, 82.04.051, 82.04.257, 82.04.261, 82.04.270, 82.04.29001, 82.04.29002, 82.04.293, 82.04.297, 82.04.298, 82.04.334, 82.04.360, 82.04.440, 82.04.4451, 82.04.44525, 82.04.4463, 82.04.4483, 82.04.460, 82.04.540, 82.04.620, 82.08.806, 82.16.100, 82.32.045, 82.32.533, 82.45.195, 35.102.070, 35.102.080, 35.102.090, and 35.102.145; reenacting and amending RCW 15.58.030, 18.64.011, 19.02.020, 19.94.015, 69.25.020, 82.04.250, 82.32.790, 82.32.080, 34.05.328, and 43.84.092; adding new sections to chapter 35.102 RCW; adding a new section to chapter 19.02 RCW; adding a new section to chapter 19.80 RCW; adding a new section to chapter 70.290 RCW; adding new sections to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; adding a new chapter to Title 35 RCW; creating new sections; repealing RCW 19.02.220, 19.02.810, 19.80.065, 43.24.160, 82.04.2404, 82.04.272, 82.04.2905, 82.04.2906, 82.04.2907, 82.04.2908, 82.04.2909, and 82.04.294; repealing 2010 c 114 s 104; repealing 2003 c 149 s 3; repealing 2010 c 106 s 206; repealing 2009 c 461 s 3; repealing 2006 c 300 s 7; repealing 2003 c 149 s 4; prescribing penalties; providing effective dates; providing a contingent effective date; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that small businesses are the backbone of our economy, creating two out of every three new jobs. The legislature further finds that during these tough economic times, it has never been more necessary to support small businesses so that they can focus on what they do best--running and growing their businesses.
     (2) The governor issued Executive Order 10-05 on October 26, 2010. This executive order charged the department of revenue with exploring, evaluating, and recommending tax simplification solutions to help small businesses by reducing the complexity of the state's tax system.
     (3) Following extensive outreach with small business owners, business associations, tax practitioners, and local government officials, the department of revenue issued its report to the governor on June 29, 2011. Key findings and recommendations from the department's report include:
     (a) Small businesses struggle with business and occupation (B&O) tax reporting, particularly when they are subject to B&O taxes in one or more of the thirty-nine cities that currently impose a B&O tax.
     (b) Despite 2003 legislation requiring a model B&O tax ordinance for municipal B&O taxes, there are still significant differences between the state's B&O tax system, the model B&O tax ordinance, and each city's B&O tax system.
     (c) The state's B&O tax system has over fifty tax classifications. A business must report under one or more tax classifications depending on its business activities. The large number of tax classifications creates complexity for small businesses as they attempt to determine which classification or classifications they must report under.
     (d) Local business licensing requirements are a significant burden on small businesses. Approximately two hundred twelve of the two hundred eighty cities in Washington require a license to engage in business within the city. Fees associated with city business licenses vary from flat-rate charges to fees based on one or more factors, including employee count, square footage occupied, and business type.
     (e) State and local B&O tax administration should be centralized as is done today with sales tax. Centralizing the administration of state and local B&O taxes would provide one of the greatest simplifications for small businesses with the least impact on local governments. Centralized B&O tax reporting would provide businesses with one place to go for information and reduce the number of forms required to be filed. It would also involve reducing the number of tax classifications and providing greater uniformity of tax classifications and definitions.
     (f) Work should continue on integration of state systems working toward a goal of a single internet business portal for small businesses to use to interact with the state.
     (4) The legislature concurs with the key findings and recommendations as summarized in subsection (3) of this section. Based on these findings and recommendations, the legislature intends to pursue a long-term vision of a single internet portal for business licensing, registration, and tax reporting, to include both state and local governments. The legislature recognizes that implementing this vision will require a significant investment in resources, both human and financial, and will take a considerable amount of time to fully achieve. Therefore, the legislature intends by this act to begin the tax and licensing simplification process by reducing the number of state B&O tax classifications; requiring greater uniformity between local B&O taxes and the state B&O tax, with a goal of state-level administration of all local B&O taxes by January 1, 2015, or as soon thereafter as possible; and simplifying local business licensing to facilitate the transition to mandatory issuance and renewal of local business licenses through the state's business licensing system by July 1, 2014, or as soon thereafter as possible, for cities imposing a B&O tax, and by January 1, 2018, or as soon thereafter as possible, for all other cities and towns that have a business licensing requirement.

Sec. 101   RCW 35.102.020 and 2007 c 6 s 1021 are each amended to read as follows:
     ((Chapter 79, Laws of 2003)) (1) This chapter does not apply to utility taxes ((on any service)) imposed by a city. For purposes of this subsection, "utility tax" means a tax that historically or traditionally has been ((taxed as a)) imposed on utility ((business)) businesses for municipal tax purposes((, such as:
     (1) A light and power business or a natural gas distribution business, as defined in RCW 82.16.010;
     (2) A telephone business, as defined in RCW 82.16.010;
     (3) Cable television services;
     (4) Sewer or water services;
     (5) Drainage services;
     (6) Solid waste services; or
     (7) Steam services)).
     (2) Notwithstanding subsection (1) of this section, city business and occupation taxes apply to business activities that have historically been taxed under a city's utility tax, such as cable television service and telecommunications service, to the extent that such activities are subject to state business and occupation tax. Nothing in this chapter prevents a city from taxing business activities under both its business and occupation tax and utility tax. However, a city is free to exempt an activity from either or both of its utility tax and business and occupation tax if such activity would otherwise be subject to both taxes.
     (3) No city may tax an activity under its business and occupation tax if such activity is subject to the state public utility tax under chapter 82.16 RCW. However, a city may tax such activities under the city's utility tax.

Sec. 102   RCW 35.102.030 and 2003 c 79 s 3 are each amended to read as follows:
     The definitions in this section apply throughout this chapter ((79, Laws of 2003)), unless the context clearly requires otherwise.
     (1) "Business" has the same meaning as given in chapter 82.04 RCW.
     (2) "City" means a city, town, or code city.
     (3) "Business and occupation tax" or "gross receipts tax" means a tax imposed on or measured by the value of products, the gross income of the business, or the gross proceeds of sales, as the case may be, and that is the legal liability of the business.
     (4) "Value of products" has the same meaning as given in chapter 82.04 RCW.
     (5) "Gross income of the business" has the same meaning as given in chapter 82.04 RCW.
     (6) "Gross proceeds of sales" has the same meaning as given in chapter 82.04 RCW.
     (7) "Department" means the department of revenue.
     (8) "State business and occupation tax" means the tax imposed in chapter 82.04 RCW.
     (9) "State business and occupation tax definitions" means the definitions in chapter 82.04 RCW, rules adopted by the department to administer chapter 82.04 RCW, and interpretive statements or other public guidance issued by the department relating to the tax imposed in chapter 82.04 RCW.
     (10) "City business and occupation tax" means a business and occupation tax imposed by a city.
     (11) "Service and other business activities classification" means the classification under which an activity is taxed if it is not taxed under some other classification.

Sec. 103   RCW 35.102.040 and 2010 c 271 s 706 are each amended to read as follows:
     (1)(a) ((The cities, working through the association of Washington cities, shall form a model ordinance development committee made up of a representative sampling of cities that as of July 27, 2003, impose a business and occupation tax. This committee shall work through the association of Washington cities to adopt a model ordinance on municipal gross receipts business and occupation tax. The model ordinance and subsequent amendments shall)) After June 30, 2012, only the department may amend the city business and occupation tax model ordinance. Beginning July 1, 2012, the department may amend the model ordinance as it deems appropriate. Amendments, other than those required to conform with changes to state law, must be adopted using a process that includes opportunity for substantial input from cities, individually or through the association of Washington cities, business stakeholders, and other members of the public. Input ((shall)) must be solicited from statewide business associations and from local chambers of commerce and downtown business associations in cities that levy a business and occupation tax.
     (b) The department of commerce ((shall)) must contract to post the model ordinance on an internet web site and to make paper copies available for inspection upon request. The department of revenue and the department of licensing ((shall)) must post copies of or links to the model ordinance on their internet web sites. Additionally, a city that imposes a business and occupation tax must make copies of its ordinance available for inspection and copying as provided in chapter 42.56 RCW.
     (((c) The definitions and tax classifications in the model ordinance may not be amended more frequently than once every four years, however the model ordinance may be amended at any time to comply with changes in state law. Any amendment to a mandatory provision of the model ordinance must be adopted with the same effective date by all cities.))
     (2) A city that imposes a business and occupation tax must adopt the mandatory provisions of the model ordinance. The following provisions are mandatory:
     (a) A system of credits that meets the requirements of RCW 35.102.060 and a form for such use;
     (b) A uniform, minimum small business tax threshold of at least the equivalent of twenty thousand dollars in gross income annually. A city may elect to deviate from this requirement by creating a higher threshold or exemption, but it ((shall)) may not deviate lower than the level required in this subsection((. If a city has a small business threshold or exemption in excess of that provided in this subsection as of January 1, 2003, and chooses to deviate below the threshold or exemption level that was in place as of January 1, 2003, the city must notify all businesses licensed to do business within the city at least one hundred twenty days prior to the potential implementation of a lower threshold or exemption amount));
     (c) Tax reporting frequencies that meet the requirements of RCW 35.102.070;
     (d) Penalty and interest provisions that meet the requirements of RCW 35.102.080 and 35.102.090;
     (e) Claim periods that meet the requirements of RCW 35.102.100;
     (f) Refund provisions that meet the requirements of RCW 35.102.110; and
     (g) Allocation and apportionment provisions that meet the requirements of this chapter;
     (h) Provisions consistent with RCW 82.04.480 and 82.04.520;
     (i) Nexus provisions consistent with RCW 35.102.050;
     (j) Tax classifications for reporting purposes that include all of the state business and occupation tax classifications, including those created in RCW 82.04.230 through 82.04.298, classifications created after the effective date of this section and codified outside of those statutes, and any classifications created by the department under the authority of section 402 of this act. The model ordinance may not include any classifications that are not used for state business and occupation tax purposes; and
     (k) Definitions, which at a minimum, must include the definitions enumerated in RCW 35.102.030 and 35.102.120. ((The definitions in chapter 82.04 RCW shall be used as the baseline for all definitions in the model ordinance, and any deviation in the model ordinance from these definitions must be described by a comment in the model ordinance.))
     (3) Except for the deduction required by RCW 35.102.160 and the system of credits developed to address multiple taxation under subsection (2)(a) of this section, a city may adopt its own provisions for tax exemptions, tax credits, and tax deductions.
     (4) Any city that adopts an ordinance that deviates from the nonmandatory provisions of the model ordinance ((shall)) must make a description of such differences available to the public, in written and electronic form.

Sec. 104   RCW 35.102.050 and 2008 c 129 s 4 are each amended to read as follows:
     (1) A city may not impose a business and occupation tax on a person unless that person has a substantial nexus with the city. For the purposes of this section, the term "substantial nexus" means business activities conducted by a person sufficient to subject that person to the taxing jurisdiction of a city under the standards established for interstate commerce under the commerce clause of the United States Constitution and the person has a substantial nexus with the state under RCW 82.04.067 or 82.04.220(2).
     (2) It must be conclusively presumed that a person that has a substantial nexus with the state under RCW 82.04.067 or 82.04.220(2) has a substantial nexus with any city in this state in which the person conducts business activities sufficient to generate gross income of the business or value of products, or any combination thereof, exceeding the city's small business tax threshold.
     (3) Mere registration under or compliance with the streamlined sales and use tax agreement does not constitute a substantial nexus for the purposes of this section.
     (4) A person that has a substantial nexus with a city under this section in one tax year will be deemed to have a substantial nexus with the city for the next tax year even if that person would otherwise not have a substantial nexus with the city under this section for that subsequent tax year.

Sec. 105   RCW 35.102.120 and 2003 c 79 s 12 are each amended to read as follows:
     (1) In addition to the definitions in RCW 35.102.030, the following terms and phrases must be defined in the model ordinance under RCW 35.102.040, and such definitions ((shall)) must include any specific requirements as noted in this ((subsection)) section:
     (a) Eligible gross receipts tax.
     (b) Extracting.
     (c) Manufacturing. ((Software development may not be defined as a manufacturing activity.)) Except as provided in subsection (2) of this section, "manufacturing" must have the same meaning as "to manufacture" in RCW 82.04.120.
     (d) Retailing.
     (e) Retail sale.
     (f) Services. The term "services" excludes retail or wholesale services.
     (g) Wholesale sale.
     (h) Wholesaling.
     (i) To manufacture.
     (j) Commercial ((and)) or industrial use.
     (k) Engaging in business.
     (l) Person.
     (2) ((Any)) (a) Except as otherwise provided in this section or other provisions of this chapter:
     (i) The state business and occupation tax definitions apply to the model ordinance and any city's business and occupation tax in the same manner as they apply for purposes of chapter 82.04 RCW; and
     (ii) A city may not, for purposes of its business and occupation tax, deviate from the state business and occupation tax definitions in its ordinances, rules, other public guidance, and interpretations.
     (b) For purposes of complying with (a) of this subsection (2), references to the department in state business and occupation tax definitions must be construed as references to the city or cities, unless the context clearly requires otherwise.
     (c) For purposes of complying with (a) of this subsection (2), references to the state in state business and occupation tax definitions must be construed as references to the city or cities, unless the context clearly requires otherwise.
     (d) Any portion of a state business and occupation tax definition that relates solely to sales or use tax or otherwise does not apply to the tax imposed in chapter 82.04 RCW does not apply to the model ordinance or business and occupation taxes imposed by the cities.
     (e) Except as otherwise provided in this section, the cities and the model ordinance need not adopt any exclusionary language contained in a state business and occupation tax definition, but only if the exclusionary language has the effect of exempting a person, activity, or income from the tax imposed in chapter 82.04 RCW.
     (f) Notwithstanding (e) of this subsection (2), a city may not deviate from the exclusion in RCW 82.04.062 from the definitions of "wholesale sale," "sale at wholesale," "retail sale," and "sale at retail." Cities imposing a business and occupation tax must compute tax on the business of making sales of precious metal bullion or monetized bullion consistent with RCW 82.04.062.
     (g) Notwithstanding (e) of this subsection (2), cities may not deviate from the exclusion in RCW 82.04.216 of steam, electricity, and electrical energy from various terms denoting tangible items that may be used, sold, or consumed.
     (h) Language in a state business and occupation tax definition governing how the defined term is to be applied for state business and occupation tax purposes also applies for purposes of city business and occupation taxes.
     (3) Tax classifications in addition to those enumerated in subsection (1) of this section ((that)), which are required to be included in the model ordinance pursuant to RCW 35.102.040(2)(j), must be uniform among all cities and with state business and occupation tax classifications.

Sec. 106   RCW 35.102.140 and 2003 c 79 s 14 are each amended to read as follows:
     ((Cities imposing business and occupation taxes must comply with all requirements of RCW 35.102.020 through 35.102.130 by December 31, 2004. A city that has not complied with the requirements of RCW 35.102.020 through 35.102.130 by December 31, 2004, may not impose a tax that is imposed by a city on the privilege of engaging in business activities.)) (1) Cities imposing business and occupation taxes after December 31, 2004, must comply with ((RCW 35.102.020 through 35.102.130)) this chapter.
     (2) The department may issue official written guidance on any provision of a city's business and occupation tax that is required by this chapter to be administered consistently with the state business and occupation tax. Any such official public guidance issued by the department preempts any conflicting interpretation of the city. Likewise, any official public guidance issued by the department on a state business and occupation tax matter preempts any conflicting interpretation by the city on a matter involving a provision of the city's business and occupation tax that is required by this chapter to be administered consistently with the state business and occupation tax. Nothing in this subsection is intended to affect the interpretation or application of a city's business and occupation tax for periods before the effective date of this section.

Sec. 107   RCW 35.102.160 and 2006 c 301 s 6 are each amended to read as follows:
     (1) The provision of professional employer services by a professional employer organization is taxable under a city's service and other business activities classification. A city that imposes its business and occupation tax on professional employer services performed by a professional employer organization((, regardless of the tax classification applicable to such services, shall)) must provide a deduction identical to the deduction in RCW 82.04.540(2).
     (2) For the purposes of this section, "professional employer organization" and "professional employer services" have the same meanings as in RCW 82.04.540.

NEW SECTION.  Sec. 108   A new section is added to chapter 35.102 RCW to read as follows:
     Beginning on the effective date of this section, the department may adopt rules and issue interpretive and policy statements in accordance with the administrative procedure act, chapter 34.05 RCW, as it considers necessary or useful in enhancing uniformity between state and city business and occupation taxes and in carrying out the department's duties under this chapter. Such rules and interpretive and policy statements take precedence over any conflicting rules and interpretive or policy guidance issued by the cities. The department must seek input from affected cities before issuing any rules and interpretive and policy statements concerning city business and occupation taxes to the extent required by chapter 34.05 RCW.

NEW SECTION.  Sec. 109   A new section is added to chapter 35.102 RCW to read as follows:
     For purposes of city business and occupation taxes, a person may meet its burden of proving that a sale is a wholesale sale rather than a retail sale as provided in RCW 82.04.470. Upon request of a city, the department must assist the city in determining whether a person has met the requirements of RCW 82.04.470(6).

Sec. 110   RCW 35.102.130 and 2010 c 111 s 305 are each amended to read as follows:
     (1) A city that imposes a business and occupation tax must provide for the allocation and apportionment of a person's gross income((, other than persons subject to the provisions of chapter 82.14A RCW, as follows:
     (1) Gross income derived from all activities other than those taxed as service or royalties)) as provided in this section.
     (2) Gross income derived from all activities other than apportionable activities must be allocated to the location where the activity takes place.
     (a) In the case of sales of tangible personal property, the activity takes place where delivery to the buyer occurs.
     (b)(i) In the case of sales of digital products, the activity takes place where delivery to the buyer occurs. The delivery of digital products will be deemed to occur at:
     (A) The seller's place of business if the purchaser receives the digital product at the seller's place of business;
     (B) If not received at the seller's place of business, the location where the purchaser or the purchaser's donee, designated as such by the purchaser, receives the digital product, including the location indicated by instructions for delivery to the purchaser or donee, known to the seller;
     (C) If the location where the purchaser or the purchaser's donee receives the digital product is not known, the purchaser's address maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith;
     (D) If no address for the purchaser is maintained in the ordinary course of the seller's business, the purchaser's address obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, when use of this address does not constitute bad faith; and
     (E) If no address for the purchaser is obtained during the consummation of the sale, the address where the digital good or digital code is first made available for transmission by the seller or the address from which the digital automated service or service described in RCW 82.04.050 (2)(g) or (6)(b) was provided, disregarding for these purposes any location that merely provided the digital transfer of the product sold.
     (ii) If none of the methods in (b)(i) of this subsection (((1))) (2) for determining where the delivery of digital products occurs are available after a good faith effort by the taxpayer to apply the methods provided in (b)(i)(A) through (E) of this subsection (((1))) (2), then the city and the taxpayer may mutually agree to employ any other method to effectuate an equitable allocation of income from the sale of digital products. The taxpayer will be responsible for petitioning the city to use an alternative method under this subsection (((1))) (2)(b)(ii). The city may employ an alternative method for allocating the income from the sale of digital products if the methods provided in (b)(i)(A) through (E) of this subsection (((1))) (2) are not available and the taxpayer and the city are unable to mutually agree on an alternative method to effectuate an equitable allocation of income from the sale of digital products.
     (iii) For purposes of this subsection (((1))) (2)(b), the following definitions apply:
     (A) "Digital automated services," "digital codes," and "digital goods" have the same meaning as in RCW 82.04.192;
     (B) "Digital products" means digital goods, digital codes, digital automated services, and the services described in RCW 82.04.050 (2)(g) and (6)(b); and
     (C) "Receive" has the same meaning as in RCW 82.32.730.
     (c) If a business activity allocated under this subsection (((1))) (2) takes place in more than one city and all cities impose a gross receipts tax, a credit must be allowed as provided in RCW 35.102.060; if not all of the cities impose a gross receipts tax, the affected cities must allow another credit or allocation system as they and the taxpayer agree.
     (((2) Gross income derived as royalties from the granting of intangible rights must be allocated to the commercial domicile of the taxpayer.
     (3) Gross income derived from activities taxed as services shall be apportioned to a city by multiplying apportionable income by a fraction, the numerator of which is the payroll factor plus the service-income factor and the denominator of which is two.
     (a) The payroll factor is a fraction, the numerator of which is the total amount paid in the city during the tax period by the taxpayer for compensation and the denominator of which is the total compensation paid everywhere during the tax period. Compensation is paid in the city if:
     (i) The individual is primarily assigned within the city;
     (ii) The individual is not primarily assigned to any place of business for the tax period and the employee performs fifty percent or more of his or her service for the tax period in the city; or
     (iii) The individual is not primarily assigned to any place of business for the tax period, the individual does not perform fifty percent or more of his or her service in any city, and the employee resides in the city.
     (b) The service income factor is a fraction, the numerator of which is the total service income of the taxpayer in the city during the tax period, and the denominator of which is the total service income of the taxpayer everywhere during the tax period. Service income is in the city if:
     (i) The customer location is in the city; or
     (ii) The income-producing activity is performed in more than one location and a greater proportion of the service-income-producing activity is performed in the city than in any other location, based on costs of performance, and the taxpayer is not taxable at the customer location; or
     (iii) The service-income-producing activity is performed within the city, and the taxpayer is not taxable in the customer location.
     (c) If the allocation and apportionment provisions of this subsection do not fairly represent the extent of the taxpayer's business activity in the city or cities in which the taxpayer does business, the taxpayer may petition for or the tax administrators may jointly require, in respect to all or any part of the taxpayer's business activity, that one of the following methods be used jointly by the cities to allocate or apportion gross income, if reasonable:
     (i) Separate accounting;
     (ii) The use of a single factor;
     (iii) The inclusion of one or more additional factors that will fairly represent the taxpayer's business activity in the city; or
     (iv) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
     (4) The definitions in this subsection apply throughout this section.
     (a) "Apportionable income" means the gross income of the business taxable under the service classifications of a city's gross receipts tax, including income received from activities outside the city if the income would be taxable under the service classification if received from activities within the city, less any exemptions or deductions available.
     (b) "Compensation" means wages, salaries, commissions, and any other form of remuneration paid to individuals for personal services that are or would be included in the individual's gross income under the federal internal revenue code.
     (c) "Individual" means any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee of that taxpayer.
     (d) "Customer location" means the city or unincorporated area of a county where the majority of the contacts between the taxpayer and the customer take place.
     (e) "Primarily assigned" means the business location of the taxpayer where the individual performs his or her duties.
     (f) "Service-taxable income" or "service income" means gross income of the business subject to tax under either the service or royalty classification.
     (g) "Tax period" means the calendar year during which tax liability is accrued. If taxes are reported by a taxpayer on a basis more frequent than once per year, taxpayers shall calculate the factors for the previous calendar year for reporting in the current calendar year and correct the reporting for the previous year when the factors are calculated for that year, but not later than the end of the first quarter of the following year.
     (h) "Taxable in the customer location" means either that a taxpayer is subject to a gross receipts tax in the customer location for the privilege of doing business, or that the government where the customer is located has the authority to subject the taxpayer to gross receipts tax regardless of whether, in fact, the government does so.))
     (3) Except as otherwise provided in this section, gross income received from apportionable activities must be apportioned to a city by multiplying apportionable income by the receipts factor. Persons who are subject to tax under more than one tax classification on their apportionable activities must calculate a separate receipts factor for each tax classification the person is taxable under.
     (a) The receipts factor is a fraction and is calculated as provided in this subsection.
     (i) The numerator of the receipts factor is the total gross income of the taxpayer attributable to the city during the tax year from engaging in an apportionable activity. The denominator of the receipts factor is the total gross income of the taxpayer from engaging in an apportionable activity everywhere in the world during the tax year.
     (ii) Except as otherwise provided in this subsection, for purposes of computing the receipts factor, gross income generated from each apportionable activity is attributable to the city, if any:
     (A) Where the customer received the benefit of the taxpayer's service or, in the case of gross income from royalties, where the customer used the taxpayer's intangible property. When a customer receives the benefit of the taxpayer's services or uses the taxpayer's intangible property in the city and outside of the city and the amount of gross income that was received by the taxpayer in return for the services received or intangible property used by the customer in the city can be reasonably determined by the taxpayer, such amount of gross income must be attributed to the city.
     (B) If the customer received the benefit of the service or used the intangible property in the city and outside of the city and the taxpayer is unable to attribute gross income under the provisions of (a)(ii)(A) of this subsection (3), gross income of the business must be attributed to the location in which the benefit of the service was primarily received or in which the intangible property was primarily used.
     (C) If the taxpayer is unable to attribute gross income under the provisions of (a)(ii)(A) or (B) of this subsection (3), gross income must be attributed to the location from which the customer ordered the service or, in the case of royalties, the office of the customer from which the royalty agreement with the taxpayer was negotiated.
     (D) If the taxpayer is unable to attribute gross income under the provisions of (a)(ii)(A), (B), or (C) of this subsection (3), gross income must be attributed to the location to which the billing statements or invoices are sent to the customer by the taxpayer.
     (E) If the taxpayer is unable to attribute gross income under the provisions of (a)(ii)(A), (B), (C), or (D) of this subsection (3), gross income of the business must be attributed to the location from which the customer sends payment to the taxpayer.
     (F) If the taxpayer is unable to attribute gross income under the provisions of (a)(ii)(A), (B), (C), (D), or (E) of this subsection (3), gross income must be attributed to the location of the customer as indicated by the customer's address: (I) Shown in the taxpayer's business records maintained in the regular course of business; or (II) obtained during consummation of the sale or the negotiation of the contract for services or for the use of the taxpayer's intangible property, including any address of a customer's payment instrument when readily available to the taxpayer and no other address is available.
     (G) If the taxpayer is unable to attribute gross income of the business under the provisions of (a)(ii)(A), (B), (C), (D), (E), or (F) of this subsection (3), gross income must be attributed to the commercial domicile of the taxpayer.
     (b) For purposes of (a)(ii) of this subsection (3), "customer" means a person or entity to whom the taxpayer makes a sale or renders services or from whom the taxpayer otherwise receives gross income of the business. "Customer" includes anyone who pays royalties or charges in the nature of royalties for the use of the taxpayer's intangible property.
     (c) A taxpayer may calculate the receipts factor for the current tax year based on the most recent calendar year for which information is available for the full calendar year. If a taxpayer does not calculate the receipts factor for the current tax year based on previous calendar year information as authorized in this subsection, the business must use current year information to calculate the receipts factor for the current tax year. In either case, a taxpayer must correct the reporting for the current tax year when complete information is available to calculate the receipts factor for that year, but not later than October 31st of the following tax year. Interest applies to any additional tax due on a corrected tax return. Interest must be computed and assessed in the manner provided in RCW 82.32.050 and accrues until the additional taxes are paid. Penalties in accordance with RCW 82.32.090 will apply to any such additional tax due only if the current tax year reporting is not corrected and the additional tax is not paid by October 31st of the following tax year. Interest as provided in RCW 82.32.060 will apply to any tax paid in excess of that properly due on a return as a result of a taxpayer using previous calendar year data or incomplete current-year data to calculate the receipts factor.
     (d) This subsection does not apply to financial institutions with respect to apportionable income taxable under a city's service and other business activities classification.
     (4) The department must by rule provide a method of apportioning the apportionable income of financial institutions, where such apportionable income is taxable under a city's service and other business activities classification. The rule adopted by the department must be consistent, to the extent feasible, with the rule adopted by the department as required by RCW 82.04.460(2).
     (5) If the department adopts a rule as authorized in RCW 82.04.460(3), gross income received from sales of telecommunications service and competitive telephone service must be allocated or apportioned for purposes of city business and occupation taxes consistent with the department's rule notwithstanding anything to the contrary in this section.
     (6) The definitions in this subsection apply throughout this section.
     (a) "Apportionable activities" has the same meaning as in RCW 82.04.460, except that the term does not include the printing and publishing activities described in RCW 35.102.150.
     (b) "Apportionable income" means the gross income of the business generated from engaging in apportionable activities, including income received from activities performed outside the city if the income would be taxable under the city's business and occupation tax if received from activities within the city, less any exemptions or deductions available.
     (c) "Gross income" means gross income of the business as defined in RCW 82.04.080.

Sec. 111   RCW 82.14A.020 and 1972 ex.s. c 134 s 3 are each amended to read as follows:
     ((For purposes of RCW 82.14A.010, the state department of revenue is hereby authorized and directed to promulgate, pursuant to the provisions of chapter 34.05 RCW, rules establishing uniform methods of division of gross income of the business of a single taxpayer between those cities, towns and unincorporated areas in which such taxpayer has a place of business.)) The gross income of the business of a financial institution must be allocated and apportioned in accordance with RCW 35.102.130 and the rule adopted by the department of revenue as required by RCW 35.102.130(4).

Sec. 112   RCW 82.04.462 and 2010 1st sp.s. c 23 s 105 are each amended to read as follows:
     (1) The apportionable income of a person within the scope of RCW 82.04.460(1) is apportioned to Washington by multiplying its apportionable income by the receipts factor. Persons who are subject to tax under more than one of the tax classifications enumerated in RCW 82.04.460(4)(a) (i) through (x) must calculate a separate receipts factor for each tax classification that the person is taxable under.
     (2) For purposes of subsection (1) of this section, the receipts factor is a fraction and is calculated as provided in subsections (3) and (4) of this section and, for financial institutions, as provided in the rule adopted by the department under the authority of RCW 82.04.460(2).
     (3)(a) The numerator of the receipts factor is the total gross income of the business of the taxpayer attributable to this state during the tax year from engaging in an apportionable activity. The denominator of the receipts factor is the total gross income of the business of the taxpayer from engaging in an apportionable activity everywhere in the world during the tax year.
     (b) Except as otherwise provided in this section, for purposes of computing the receipts factor, gross income of the business generated from each apportionable activity is attributable to the state:
     (i) Where the customer received the benefit of the taxpayer's service or, in the case of gross income from royalties, where the customer used the taxpayer's intangible property. When a customer receives the benefit of the taxpayer's services or uses the taxpayer's intangible property in this and one or more other states and the amount of gross income of the business that was received by the taxpayer in return for the services received or intangible property used by the customer in this state can be reasonably determined by the taxpayer, such amount of gross income must be attributed to this state.
     (ii) If the customer received the benefit of the service or used the intangible property in more than one state and if the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i) of this subsection (3), gross income of the business must be attributed to the state in which the benefit of the service was primarily received or in which the intangible property was primarily used.
     (iii) If the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i) or (ii) of this subsection (3), gross income of the business must be attributed to the state from which the customer ordered the service or, in the case of royalties, the office of the customer from which the royalty agreement with the taxpayer was negotiated.
     (iv) If the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i), (ii), or (iii) of this subsection (3), gross income of the business must be attributed to the state to which the billing statements or invoices are sent to the customer by the taxpayer.
     (v) If the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i), (ii), (iii), or (iv) of this subsection (3), gross income of the business must be attributed to the state from which the customer sends payment to the taxpayer.
     (vi) If the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i), (ii), (iii), (iv), or (v) of this subsection (3), gross income of the business must be attributed to the state where the customer is located as indicated by the customer's address: (A) Shown in the taxpayer's business records maintained in the regular course of business; or (B) obtained during consummation of the sale or the negotiation of the contract for services or for the use of the taxpayer's intangible property, including any address of a customer's payment instrument when readily available to the taxpayer and no other address is available.
     (vii) If the taxpayer is unable to attribute gross income of the business under the provisions of (b)(i), (ii), (iii), (iv), (v), or (vi) of this subsection (3), gross income of the business must be attributed to the commercial domicile of the taxpayer.
     (viii) For purposes of this subsection (3)(b), "customer" means a person or entity to whom the taxpayer makes a sale or renders services or from whom the taxpayer otherwise receives gross income of the business. "Customer" includes anyone who pays royalties or charges in the nature of royalties for the use of the taxpayer's intangible property.
     (c) Gross income of the business from engaging in an apportionable activity must be excluded from the denominator of the receipts factor if, in respect to such activity, at least some of the activity is performed in this state, and the gross income is attributable under (b) of this subsection (3) to a state in which the taxpayer is not taxable. For purposes of this subsection (3)(c), "not taxable" means that the taxpayer is not subject to a business activities tax by that state, except that a taxpayer is taxable in a state in which it would be deemed to have a substantial nexus with that state under the standards in RCW 82.04.067(1) regardless of whether that state imposes such a tax. "Business activities tax" means a tax measured by the amount of, or economic results of, business activity conducted in a state. The term includes taxes measured in whole or in part on net income or gross income or receipts. "Business activities tax" does not include a sales tax, use tax, or a similar transaction tax, imposed on the sale or acquisition of goods or services, whether or not denominated a gross receipts tax or a tax imposed on the privilege of doing business.
     (d) This subsection (3) does not apply to financial institutions with respect to apportionable income taxable under RCW 82.04.290. Financial institutions must calculate the receipts factor as provided in subsection (4) of this section and the rule adopted by the department under the authority of RCW 82.04.460(2) with respect to apportionable income taxable under RCW 82.04.290. Financial institutions that are subject to tax under any other tax classification enumerated in RCW 82.04.460(4)(a) (i) through (v) and (vii) through (x) must calculate a separate receipts factor, as provided in this section, for each of the other tax classifications that the financial institution is taxable under.
     (4) A taxpayer may calculate the receipts factor for the current tax year based on the most recent calendar year for which information is available for the full calendar year. If a taxpayer does not calculate the receipts factor for the current tax year based on previous calendar year information as authorized in this subsection, the business must use current year information to calculate the receipts factor for the current tax year. In either case, a taxpayer must correct the reporting for the current tax year when complete information is available to calculate the receipts factor for that year, but not later than October 31st of the following tax year. Interest will apply to any additional tax due on a corrected tax return. Interest must be computed and assessed ((at the rate provided for delinquent excise taxes under chapter 82.32 RCW, retroactively to the date the original return was due, and will accrue)) as provided in RCW 82.32.050 and accrues until the additional taxes are paid. Penalties as provided in RCW 82.32.090 will apply to any such additional tax due only if the current tax year reporting is not corrected and the additional tax is not paid by October 31st of the following tax year. Interest as provided in RCW 82.32.060 will apply to any tax paid in excess of that properly due on a return as a result of a taxpayer using previous calendar year data or incomplete current-year data to calculate the receipts factor.
     (5) Unless the context clearly requires otherwise, the definitions in this subsection apply throughout this section.
     (a) "Apportionable activities" and "apportionable income" have the same meaning as in RCW 82.04.460.
     (b) "State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision of a foreign country.

NEW SECTION.  Sec. 201   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Business licensing system" and "business license" have the same meaning as in RCW 19.02.020.
     (2) "City" means a city, town, or code city.
     (3) "Department" means the department of revenue.
     (4)(a) "Employee" means any individual:
     (i) Who is considered an employee under the statutory or common law of this state;
     (ii) Who is considered an employee or worker by the department of labor and industries;
     (iii) Whose wages are reported by his or her employer to the employment security department for purposes of contributions payable under chapter 50.24 RCW;
     (iv) Who is a sole proprietor of a business; or
     (v) Who is an owner, officer, partner, member, manager, or trustee of a business entity. For purposes of this subsection, "manager" means a person designated as such by a limited liability company, limited liability partnership, or similar business entity, in the entity's certificate of formation or similar governing documents.
     (b) An individual that falls within any provision in (a) of this subsection (4) is an employee regardless of whether that individual is employed full-time or part-time; is employed on a permanent or temporary basis; or receives wages, salary, commission, or other form of remuneration from his or her employer.
     (c) Notwithstanding anything to the contrary in this subsection (4), an individual who is merely a passive investor in a business and does not perform any services or activities as an agent of the business is not an employee.
     (d) An individual performing services in his or her capacity as a director of a corporation or other entity is not an employee of the entity if the individual does not otherwise fall within the provisions of (a) of this subsection (4).
     (5) "General business license" means a license, not including a regulatory license, that a city requires all or most businesses to obtain in order to conduct business within the city. For purposes of this subsection (5), "regulatory license" means a license that a city requires only for certain types of businesses, such as taxicab or other for-hire vehicle operators, adult entertainment businesses, amusement device operators, massage parlors, debt collectors, door-to-door sales persons, trade-show operators, and home-based businesses.

NEW SECTION.  Sec. 202   (1) Except as provided in subsection (3) of this section, all cities that impose a business and occupation tax must, by July 1, 2014, have their general business licenses issued and renewed, if the license is required to be renewed, through the business licensing system in accordance with chapter 19.02 RCW.
     (2) Except as provided in subsection (3) of this section, by January 1, 2018, all cities that require general business licenses and that do not impose a business and occupation tax must have such licenses issued and renewed, if the license is required to be renewed, through the business licensing system in accordance with chapter 19.02 RCW.
     (3) The department may delay or phase-in the issuance and renewal of general business licenses beyond the dates provided in subsections (1) and (2) of this section if funding or other resources are insufficient to enable the department to meet the deadlines in subsection (1) or (2) of this section or as necessary to ensure the business licensing system is adequately prepared to handle all general business licenses and that the transition to mandatory department issuance and renewal of general business licenses is as seamless as possible. To that end, the department, working with affected cities, is authorized to establish a schedule for assuming the issuance and renewal of general business licenses as required by this section. Cities may continue to issue and renew their general business licenses until those licenses have been incorporated into the business licensing system. A city whose general business license has been incorporated into the business licensing system may no longer issue and renew those licenses.
     (4) For purposes of this section, "business and occupation tax" has the same meaning as in RCW 35.102.030.

NEW SECTION.  Sec. 203   (1) By the time that a city's general business license is required to be issued and renewed through the business licensing system, the license is subject to all of the provisions of this section.
     (2)(a) A city may use only the following types of fees for general business licenses:
     (i) A flat fee as established by the city;
     (ii) A flat fee calculated by multiplying a specific dollar amount by the quotient resulting from dividing the total hours worked by the business's employees located within the city by one thousand nine hundred twenty; or
     (iii) A range of flat fees where the determination of the applicable fee is based on the quotient resulting from dividing the total hours worked by the business's employees located within the city by one thousand nine hundred twenty.
     (b) A city may not use a combination of fees described in (a)(i) through (iii) of this subsection (2) for its general business license.
     (c) For purposes of this subsection, a flat fee for a general business license must be the same amount for all businesses or for all businesses within a specified fee range.
     (d) For purposes of this subsection, an employee of a staffing firm is not considered to be an employee of any client of the staffing firm to whom the employee is assigned. To the extent that a staffing firm assigns its employees to work in any city that imposes a licensing fee as authorized in (a) of this subsection (2), the staffing firm is subject to a licensing fee in such city even if the staffing firm is not otherwise physically located in that city. For purposes of this subsection (2)(d), "staffing firm" means a person providing "staffing services" as defined in RCW 82.04.540.
     (e) For purposes of this subsection, a covered employee is not considered to be an employee of the professional employer organization with which the individual has a coemployment relationship. Rather, the covered employee is deemed the sole employee of the client. The definitions in RCW 82.04.540 apply to this subsection (2)(e).
     (f) For purposes of the fees authorized in (a)(ii) and (iii) of this subsection (2):
     (i) Hours worked are for the twelve-month period ending the last day of the month immediately preceding the month in which the license for which the fee is imposed takes effect, except that new businesses must make a reasonable estimation of the hours that their employees located within the city will work in the city during the twelve-month period beginning on the date that the license for which the fee is imposed will take effect; and
     (ii) It must be presumed that any employee that works in a city for any part of a twelve-month period has worked for at least one thousand nine hundred twenty hours in that city during that twelve-month period unless the individual's employer has records establishing that the employee worked more or fewer than one thousand nine hundred twenty hours in that city during that twelve-month period.
     (g) For purposes of (a)(ii) and (iii) of this subsection (2), an employee is located in a city if the employee:
     (i) Spends any amount of time in the city on behalf of his or her employer, even if most of the employee's work time is spent outside of the city; or
     (ii) Does not spend any time in the city on behalf of his or her employer; but the employee's work is directed or managed by the employer primarily from a location within the city, and the employer is not required to pay a general business license fee to any other city in which the employee performs services for the employer.
     (3) A general business license may not be renewed more frequently than once per year except that the department may require a more frequent renewal date as may be necessary to synchronize the renewal date for the general business license with the business's business license expiration date.
     (4) The business licensing system need not accommodate any monetary penalty imposed by a city for failing to obtain or renew a general business license. The penalty imposed in RCW 19.02.085 applies to general business licenses that are not renewed by their expiration date.
     (5) The department may refuse to administer any provision of a city ordinance that is inconsistent with this chapter. This authority includes refusing to issue or renew a city's general business license. Within five working days following the department's refusal to administer a provision of a city's licensing ordinance, the department must provide notice to the city of the department's refusal and the reasons therefore.

NEW SECTION.  Sec. 204   The department is not authorized to enforce a city's licensing laws except to the extent of issuing or renewing a license in accordance with this chapter and chapter 19.02 RCW or refusing to issue a license due to an incomplete application, nonpayment of the appropriate licensing fee as indicated by the license application or renewal application, or the nonpayment of any applicable penalty for late renewal.

NEW SECTION.  Sec. 205   Cities whose general business licenses are issued through the business licensing system retain the authority to provide exemptions and thresholds for these licenses.

NEW SECTION.  Sec. 206   Cities may not require a person to obtain or renew a general business license unless the person engages in business within a city. For purposes of this section, a person engages in business within a city if the person has business property or employees located in the city on either a permanent or nonpermanent basis. A person also engages in business within a city if the person, either directly or through an agent or other representative, engages in activities in the city that are significantly associated with the person's ability to establish or maintain a market for the person's products or services in the city. For purposes of this section, engaging in business within a city is intended to be construed coextensive with the physical presence requirement for purposes of imposing a sales or use tax collection obligation as established in Quill Corp. v. North Dakota, 504 U.S. 298 (1992).

NEW SECTION.  Sec. 207   A general business license change enacted by a city whose general business license is issued through the business licensing system takes effect no sooner than seventy-five days after the department receives notice of the change and only on the first day of January, April, July, or October, if the change affects in any way who must obtain a license, who is exempt from obtaining a license, or the amount or method of determining any fee for the issuance or renewal of a license.

NEW SECTION.  Sec. 208   A new section is added to chapter 19.02 RCW to read as follows:
     The department may require applicants to submit applications for general business licenses or their renewal electronically. The department may also require application and renewal fees for general business licenses be paid electronically. For purposes of this section, "general business license" has the same meaning as in section 201 of this act.

NEW SECTION.  Sec. 209   Sections 201 through 207 of this act constitute a new chapter in Title 35 RCW.

Sec. 301   RCW 15.13.250 and 2007 c 335 s 1 are each amended to read as follows:
     For the purpose of this chapter:
     (1) "Department" means the department of agriculture of the state of Washington.
     (2) "Director" means the director of the department or the director's duly authorized representative.
     (3) "Person" means any individual, firm, partnership, corporation, company, society and association, and every officer, agent or employee thereof.
     (4) "Horticultural plant" includes, but is not limited to, any horticultural, floricultural, or viticultural plant, or turf, for planting, propagation or ornamentation growing or otherwise. The term does not apply to potato, garlic, or onion planting stock or to cut plant material, except plant parts used for propagative purposes.
     (5) "Horticultural facilities" means, but is not limited to, the premises where horticultural plants or Christmas trees are grown, stored, handled or delivered for sale or transportation, or where records required under this chapter are stored or kept, and all vehicles and equipment used to transport horticultural plants or Christmas trees.
     (6) "Plant pests" means, but is not limited to, a living stage of insect, mite, or other arthropod; nematode; slug, snail, or other mollusk; protozoa or other invertebrate animals; bacteria; fungus; virus; viroid; phytoplasma; weed or parasitic plant; or any organisms similar to or allied with any of the plant pests listed in this section; or any infectious substance; which can directly or indirectly injure or cause disease or damage to any plant or plant product or that threatens the diversity or abundance of native species.
     (7) "Inspection and/or certification" means, but is not limited to, the inspection by the director of horticultural plants or Christmas trees at any time prior to, during, or subsequent to harvest or sale and the issuance by the director of a written certificate stating if the horticultural plants or Christmas trees are in compliance with the provisions of this chapter and rules adopted under this chapter. Inspection may include, but is not limited to, examination of horticultural plants or Christmas trees, taking samples, destructive testing, conducting interviews, taking photographs, and examining records.
     (8) "Nursery dealer" means any person who sells horticultural plants or plants, grows, receives, or handles horticultural plants for the purpose of selling or planting for another person.
     (9) "Sell" means to sell, hold for sale, offer for sale, handle, or to use as an inducement for the sale of another article or product.
     (10) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed utilizing a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (11) "Certificate" or "certificate of inspection" means an official document certifying compliance with the requirements of this chapter. The term "certificate" includes labels, rubber stamp imprints, tags, permits, written statements, or any other form of certification document that accompanies the movement of inspected and certified plant material, including Christmas trees.
     (12) "Turf" means field-cultivated turf grass sod consisting of grass varieties, or blends of grass varieties, and dichondra for use in residential and commercial landscapes.
     (13) "This chapter" means this chapter and the rules adopted under this chapter.
     (14) "Compliance agreement" means a written agreement between the department and a person engaged in growing, handling, or moving articles, plants, or plant products regulated under this chapter or title, in which the person agrees to comply with stipulated requirements.
     (15) "Consignor" means the person named in the invoice, bill, or other shipping document accompanying a horticultural plant as the person from whom the horticultural plant has been received for shipment.
     (16) "Christmas tree" means a cut evergreen tree:
     (a) Of a marketable species;
     (b) Managed to produce trees meeting United States number 2 or better standards for Christmas trees as specified by the United States department of agriculture; and
     (c) Evidencing periodic maintenance practices of shearing or culturing, or both; weed and brush control; and one or more of the following practices: Basal pruning, fertilization, insect and disease control, stump culture, soil cultivation, and irrigation.
     (17) "Christmas tree grower" means any person who grows Christmas trees for sale.

Sec. 302   RCW 15.13.250 and 2000 c 144 s 1 are each amended to read as follows:
     For the purpose of this chapter:
     (1) "Department" means the department of agriculture of the state of Washington.
     (2) "Director" means the director of the department or the director's duly authorized representative.
     (3) "Person" means any individual, firm, partnership, corporation, company, society and association, and every officer, agent or employee thereof.
     (4) "Horticultural plant" includes, but is not limited to, any horticultural, floricultural, or viticultural plant, or turf, for planting, propagation or ornamentation growing or otherwise. The term does not apply to potato, garlic, or onion planting stock or to cut plant material, except plant parts used for propagative purposes.
     (5) "Horticultural facilities" means, but is not limited to, the premises where horticultural plants are grown, stored, handled or delivered for sale or transportation, or where records required under this chapter are stored or kept, and all vehicles and equipment used to transport horticultural plants.
     (6) "Plant pests" means, but is not limited to, a living stage of insect, mite, or other arthropod; nematode; slug, snail, or other mollusk; protozoa or other invertebrate animals; bacteria; fungus; virus; viroid; phytoplasma; weed or parasitic plant; or any organisms similar to or allied with any of the plant pests listed in this section; or any infectious substance; which can directly or indirectly injure or cause disease or damage to any plant or plant product or that threatens the diversity or abundance of native species.
     (7) "Inspection and/or certification" means, but is not limited to, the inspection by the director of horticultural plants at any time prior to, during, or subsequent to harvest or sale and the issuance by the director of a written certificate stating if the horticultural plants are in compliance with the provisions of this chapter and rules adopted under this chapter. Inspection may include, but is not limited to, examination of horticultural plants, taking samples, destructive testing, conducting interviews, taking photographs, and examining records.
     (8) "Nursery dealer" means any person who sells horticultural plants or plants, grows, receives, or handles horticultural plants for the purpose of selling or planting for another person.
     (9) "Sell" means to sell, hold for sale, offer for sale, handle, or to use as an inducement for the sale of another article or product.
     (10) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed utilizing a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (11) "Certificate" or "certificate of inspection" means an official document certifying compliance with the requirements of this chapter. The term "certificate" includes labels, rubber stamp imprints, tags, permits, written statements, or any other form of certification document that accompanies the movement of inspected and certified plant material.
     (12) "Turf" means field-cultivated turf grass sod consisting of grass varieties, or blends of grass varieties, and dichondra for use in residential and commercial landscapes.
     (13) "This chapter" means this chapter and the rules adopted under this chapter.
     (14) "Compliance agreement" means a written agreement between the department and a person engaged in growing, handling, or moving articles, plants, or plant products regulated under this chapter or title, in which the person agrees to comply with stipulated requirements.
     (15) "Consignor" means the person named in the invoice, bill, or other shipping document accompanying a horticultural plant as the person from whom the horticultural plant has been received for shipment.

Sec. 303   RCW 15.13.280 and 2000 c 144 s 6 are each amended to read as follows:
     (1) No person ((shall)) may act as a nursery dealer without a license for each place of business where horticultural plants are sold except as provided in RCW 15.13.270. Any person applying for such a license ((shall)) must apply through the ((master license)) business licensing system. The application ((shall)) must be accompanied by the appropriate fee. The director ((shall)) must establish a schedule of fees for retail and wholesale nursery dealer licenses based upon the person's gross annual sales of horticultural plants at each place of business. The schedule for retail licenses ((shall)) must include separate fees for at least the following two categories:
     (a) A person whose gross annual sales of horticultural plants do not exceed two thousand five hundred dollars; and
     (b) A person whose gross annual sales of horticultural plants exceed two thousand five hundred dollars.
     (2) A person conducting both retail and wholesale sales of horticultural plants at the same place of business shall secure one of the following:
     (a) A retail nursery dealer license if retail sales of the horticultural plants exceed such wholesale sales; or
     (b) A wholesale nursery dealer license if wholesale sales of the horticultural plants exceed such retail sales.
     (3) The director may issue a wholesale nursery dealer license to a person operating as a farmers market at which individual producers are selling directly to consumers. The license ((shall)) must be at the appropriate level to cover all persons selling horticultural plants at each site at which the person operates a market.
     (4) The licensing fee that must accompany an application for a new license shall be based upon the applicant's estimated gross sales of horticultural plants for the ensuing licensing year. The fee for renewing a license ((shall)) must be based upon the licensee's gross sales of these products during the preceding licensing year.
     (5) The license expires on the ((master)) business license expiration date unless it has been revoked or suspended prior to the expiration date by the director for cause. Each license ((shall)) must be posted in a conspicuous place open to the public in the location for which it was issued.
     (6) The department may audit licensees during normal business hours to determine that appropriate fees have been paid.

Sec. 304   RCW 15.13.290 and 2000 c 144 s 8 are each amended to read as follows:
     If any application for renewal of a nursery dealer license is not filed prior to the ((master)) business license expiration date, the ((master)) business license delinquency fee ((shall be)) is assessed under chapter 19.02 RCW and ((shall)) must be paid by the applicant before the renewal license is issued.

Sec. 305   RCW 15.49.011 and 1989 c 354 s 73 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (l) "Advertisement" means all representations, other than those on the label, disseminated in any manner or by any means, relating to seed within the scope of this chapter.
     (2) "Agricultural seed" includes grass, forage, cereal, oil, fiber, and other kinds of crop seeds commonly recognized within this state as agricultural seeds, lawn seeds, and combinations of such seeds, and may include common and restricted noxious weed seeds but not prohibited noxious weed seeds.
     (3) "Blend" means seed consisting of more than one variety of a kind, each in excess of five percent by weight of the whole.
     (4) "Bulk seed" means seed distributed in a nonpackage form.
     (5) "Certifying agency" means (a) an agency authorized under the laws of any state, territory, or possession to certify seed officially and which has standards and procedures approved by the United States secretary of agriculture to assure the genetic purity and identity of the seed certified; or (b) an agency of a foreign country determined by the United States secretary of agriculture to adhere to procedures and standards for seed certification comparable to those adhered to generally by seed-certifying agencies under (a) of this subsection.
     (6) "Conditioning" means drying, cleaning, scarifying, and other operations that could change the purity or germination of the seed and require the seed lot to be retested to determine the label information.
     (7) "Dealer" means any person who distributes.
     (8) "Department" means the department of agriculture of the state of Washington or its duly authorized representative.
     (9) "Director" means the director of the department of agriculture.
     (10) "Distribute" means to import, consign, offer for sale, hold for sale, sell, barter, or otherwise supply seed in this state.
     (11) "Flower seeds" includes seeds of herbaceous plants grown from their blooms, ornamental foliage, or other ornamental parts, and commonly known and sold under the name of flower seeds in this state.
     (12) The terms "foundation seed," "registered seed," and "certified seed" mean seed that has been produced and labeled in compliance with the regulations of the department.
     (13) "Germination" means the emergence and development from the seed embryo of those essential structures which, for the kind of seed in question, are indicative of the ability to produce a normal plant under favorable conditions.
     (14) "Hard seeds" means seeds that remain hard at the end of the prescribed test period because they have not absorbed water due to an impermeable seed coat.
     (15) "Hybrid" means the first generation seed of a cross produced by controlling the pollination and by combining (a) two or more inbred lines; (b) one inbred or a single cross with an open pollinated variety; or (c) two varieties or species, except open-pollinated varieties of corn (Zea mays). The second generation or subsequent generations from such crosses ((shall)) are not ((be)) regarded as hybrids. Hybrid designations ((shall)) must be treated as variety names.
     (16) "Inert matter" means all matter not seed, that includes broken seeds, sterile florets, chaff, fungus bodies, and stones as determined by methods defined by rule.
     (17) "Kind" means one or more related species or subspecies that singly or collectively is known by one common name, for example, corn, oats, alfalfa, and timothy.
     (18) "Label" includes a tag or other device attached to or written, stamped, or printed on any container or accompanying any lot of bulk seeds purporting to set forth the information required on the seed label by this chapter, and it may include any other information relating to the labeled seed.
     (19) "Lot" means a definite quantity of seed identified by a lot number or other mark, every portion or bag of which is uniform within recognized tolerances for the factors that appear in the labeling.
     (20) "Lot number" ((shall)) must identify the producer or dealer and year of production or the year distributed for each lot of seed. This requirement may be satisfied by use of a conditioner's or dealer's code.
     (21) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed using a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (22) "Mixture," "mix," or "mixed" means seed consisting of more than one kind, each in excess of five percent by weight of the whole.
     (23) "Official sample" means any sample of seed taken and designated as official by the department.
     (24) "Other crop seed" means seed of plants grown as crops, other than the kind or variety included in the pure seed, as determined by methods defined by rule.
     (25) "Prohibited (primary) noxious weed seeds" are the seeds of weeds which when established are highly destructive, competitive, and/or difficult to control by cultural or chemical practices.
     (26) "Person" means an individual, partnership, corporation, company, association, receiver, trustee, or agent.
     (27) "Pure live seed" means the product of the percent of germination plus hard or dormant seed multiplied by the percent of pure seed divided by one hundred. The result is expressed as a whole number.
     (28) "Pure seed" means seed exclusive of inert matter and all other seeds not of the seed being considered as determined by methods defined by rule.
     (29) "Restricted (secondary) noxious weed seeds" are the seeds of weeds which are objectionable in fields, lawns, and gardens of this state, but which can be controlled by cultural or chemical practices.
     (30) "Retail" means to distribute to the ultimate consumer.
     (31) "Screenings" mean chaff, seed, weed seed, inert matter, and other materials removed from seed in cleaning or conditioning.
     (32) "Seed labeling registrant" means a person who has obtained a permit to label seed for distribution in this state.
     (33) "Seeds" mean agricultural or vegetable seeds or other seeds as determined by rules adopted by the department.
     (34) "Stop sale, use, or removal order" means an administrative order restraining the sale, use, disposition, and movement of a specific amount of seed.
     (35) "Treated" means that the seed has received an application of a substance, or that it has been subjected to a process for which a claim is made.
     (36) "Type" means a group of varieties so nearly similar that the individual varieties cannot be clearly differentiated except under special conditions.
     (37) "Variety" means a subdivision of a kind that is distinct, uniform, and stable; "distinct" in the sense that the variety can be differentiated by one or more identifiable morphological, physiological, or other characteristics from all other varieties of public knowledge; "uniform" in the sense that variations in essential and distinctive characteristics are describable; and "stable" in the sense that the variety will remain unchanged in its essential and distinctive characteristics and its uniformity when reproduced or reconstituted as required by the different categories of varieties.
     (38) "Vegetable seeds" includes the seeds of those crops that are grown in gardens and on truck farms and are generally known and sold under the name of vegetable or herb seeds in this state.
     (39) "Weed seeds" include the seeds of all plants generally recognized as weeds within this state, and includes the seeds of prohibited and restricted noxious weeds as determined by regulations adopted by the department.
     (40) "Inoculant" means a commercial preparation containing nitrogen fixing bacteria applied to the seed.
     (41) "Coated seed" means seed that has been treated and has received an application of inert material during the treatment process.

Sec. 306   RCW 15.49.380 and 2010 c 8 s 6064 are each amended to read as follows:
     (1) No person ((shall)) may distribute seeds without having obtained a dealer's license for each regular place of business((: PROVIDED, That no)). However, a license ((shall be)) is not required of a person who distributes seeds only in sealed packages of eight ounces or less, packed by a seed labeling registrant and bearing the name and address of the registrant((: PROVIDED FURTHER, That)). Moreover, a license ((shall not be)) is not required of any grower selling seeds of his or her own production exclusively. Such seed sold by such grower must be properly labeled as provided in this chapter. Each dealer's license ((shall)) must cost twenty-five dollars, ((shall)) must be issued through the ((master license)) business licensing system, ((shall)) must bear the date of issue, ((shall)) must expire on the ((master)) business license expiration date and ((shall)) must be prominently displayed in each place of business.
     (2) Persons custom conditioning and/or custom treating seeds for others for remuneration ((shall be)) are considered dealers for the purpose of this chapter.
     (3) Application for a license to distribute seed ((shall)) must be through the ((master license)) business licensing system and ((shall)) must include the name and address of the person applying for the license, the name of a person domiciled in this state authorized to receive and accept service or legal notices of all kinds, and any other reasonable and practical information prescribed by the department necessary to carry out the purposes and provisions of this chapter.

Sec. 307   RCW 15.49.390 and 1982 c 182 s 25 are each amended to read as follows:
     If an application for renewal of the dealer's license provided for in RCW 15.49.380, is not filed prior to the ((master)) business license expiration date, the ((master)) business license delinquency fee ((shall be)) is assessed under chapter 19.02 RCW and ((shall)) must be paid by the applicant before the renewal license shall be issued.

Sec. 308   RCW 15.54.275 and 1998 c 36 s 3 are each amended to read as follows:
     (1) No person may distribute a bulk fertilizer in this state until a license to distribute has been obtained by that person. An annual license is required for each out-of-state or in-state location that distributes bulk fertilizer in Washington state. An application for each location ((shall)) must be filed on forms provided by the ((master license)) business licensing system established under chapter 19.02 RCW and ((shall)) must be accompanied by an annual fee of twenty-five dollars per location. The license ((shall)) expires on the ((master)) business license expiration date.
     (2) An application for license ((shall)) must include the following:
     (a) The name and address of licensee.
     (b) Any other information required by the department by rule.
     (3) The name and address shown on the license ((shall)) must be shown on all labels, pertinent invoices, and storage facilities for fertilizer distributed by the licensee in this state.
     (4) If an application for license renewal provided for in this section is not filed prior to the ((master)) business license expiration date, a delinquency fee of twenty-five dollars ((shall be)) is assessed and added to the original fee and ((shall)) must be paid by the applicant before the renewal license ((shall be)) is issued. The assessment of this delinquency fee ((shall)) does not prevent the department from taking any other action as provided for in this chapter. The penalty ((shall)) does not apply if the applicant furnishes an affidavit that he or she has not distributed this commercial fertilizer subsequent to the expiration of his or her prior license.

Sec. 309   RCW 15.58.030 and 2011 c 103 s 35 are each reenacted and amended to read as follows:
     ((As used in this chapter the words and phrases defined in this section shall have the meanings indicated)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Active ingredient" means any ingredient which will prevent, destroy, repel, control, or mitigate pests, or which will act as a plant regulator, defoliant, desiccant, or spray adjuvant.
     (2) "Antidote" means the most practical immediate treatment in case of poisoning and includes first aid treatment.
     (3) "Arthropod" means any invertebrate animal that belongs to the phylum arthropoda, which in addition to insects, includes allied classes whose members are wingless and usually have more than six legs; for example, spiders, mites, ticks, centipedes, and isopod crustaceans.
     (4) "Complete wood destroying organism inspection" means inspection for the purpose of determining evidence of infestation, damage, or conducive conditions as part of the transfer, exchange, or refinancing of any structure in Washington state. Complete wood destroying organism inspections include any wood destroying organism inspection that is conducted as the result of telephone solicitation by an inspection, pest control, or other business, even if the inspection would fall within the definition of a specific wood destroying organism inspection.
     (5) "Defoliant" means any substance or mixture of substances intended to cause the leaves or foliage to drop from a plant with or without causing abscission.
     (6) "Department" means the Washington state department of agriculture.
     (7) "Desiccant" means any substance or mixture of substances intended to artificially accelerate the drying of plant tissues.
     (8) "Device" means any instrument or contrivance intended to trap, destroy, control, repel, or mitigate pests, or to destroy, control, repel or mitigate fungi, nematodes, or such other pests, as may be designated by the director, but not including equipment used for the application of pesticides when sold separately from the pesticides.
     (9) "Director" means the director of the department or a duly authorized representative.
     (10) "Distribute" means to offer for sale, hold for sale, sell, barter, or supply pesticides in this state.
     (11) "EPA" means the United States environmental protection agency.
     (12) "EPA restricted use pesticide" means any pesticide with restricted uses as classified for restricted use by the administrator, EPA.
     (13) "FIFRA" means the federal insecticide, fungicide, and rodenticide act as amended (61 Stat. 163, 7 U.S.C. Sec. 136 et seq.).
     (14) "Fungi" means all nonchlorophyll-bearing thallophytes (all nonchlorophyll-bearing plants of a lower order than mosses and liverworts); for example, rusts, smuts, mildews, molds, yeasts, and bacteria, except those on or in living persons or other animals.
     (15) "Fungicide" means any substance or mixture of substances intended to prevent, destroy, repel, or mitigate any fungi.
     (16) "Herbicide" means any substance or mixture of substances intended to prevent, destroy, repel, or mitigate any weed.
     (17) "Inert ingredient" means an ingredient which is not an active ingredient.
     (18) "Ingredient statement" means a statement of the name and percentage of each active ingredient together with the total percentage of the inert ingredients in the pesticide, and when the pesticide contains arsenic in any form, the ingredient statement shall also include percentages of total and water soluble arsenic, each calculated as elemental arsenic. The ingredient statement for a spray adjuvant must be consistent with the labeling requirements adopted by rule.
     (19) "Insect" means any of the numerous small invertebrate animals whose bodies are more or less obviously segmented, and which for the most part belong to the class insecta, comprising six-legged, usually winged forms, for example, beetles, bugs, bees, flies, and to other allied classes of arthropods whose members are wingless and usually have more than six legs, for example, spiders, mites, ticks, centipedes, and isopod crustaceans.
     (20) "Insecticide" means any substance or mixture of substances intended to prevent, destroy, repel, or mitigate any insects which may be present in any environment whatsoever.
     (21) "Inspection control number" means a number obtained from the department that is recorded on wood destroying organism inspection reports issued by a structural pest inspector in conjunction with the transfer, exchange, or refinancing of any structure.
     (22) "Label" means the written, printed, or graphic matter on, or attached to, the pesticide, device, or immediate container, and the outside container or wrapper of the retail package.
     (23) "Labeling" means all labels and other written, printed, or graphic matter:
     (a) Upon the pesticide, device, or any of its containers or wrappers;
     (b) Accompanying the pesticide, or referring to it in any other media used to disseminate information to the public; and
     (c) To which reference is made on the label or in literature accompanying or referring to the pesticide or device except when accurate nonmisleading reference is made to current official publications of the department, United States departments of agriculture; interior; education; health and human services; state agricultural colleges; and other similar federal or state institutions or agencies authorized by law to conduct research in the field of pesticides.
     (24) "Land" means all land and water areas, including airspace and all plants, animals, structures, buildings, devices and contrivances, appurtenant thereto or situated thereon, fixed or mobile, including any used for transportation.
     (25) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed using a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (26) "Nematocide" means any substance or mixture of substances intended to prevent, destroy, repel, or mitigate nematodes.
     (27) "Nematode" means any invertebrate animal of the phylum nemathelminthes and class nematoda, that is, unsegmented round worms with elongated, fusiform, or saclike bodies covered with cuticle, and inhabiting soil, water, plants or plant parts, may also be called nemas or eelworms.
     (28) "Person" means any individual, partnership, association, corporation, or organized group of persons whether or not incorporated.
     (29) "Pest" means, but is not limited to, any insect, rodent, nematode, snail, slug, weed and any form of plant or animal life or virus, except virus on or in a living person or other animal, which is normally considered to be a pest or which the director may declare to be a pest.
     (30) "Pest control consultant" means any individual who sells or offers for sale at other than a licensed pesticide dealer outlet or location where they are employed, or who offers or supplies technical advice or makes recommendations to the user of:
     (a) Highly toxic pesticides, as determined under RCW 15.58.040;
     (b) EPA restricted use pesticides or restricted use pesticides which are restricted by rule to distribution by licensed pesticide dealers only; or
     (c) Any other pesticide except those pesticides which are labeled and intended for home and garden use only.
     (31) "Pesticide" means, but is not limited to:
     (a) Any substance or mixture of substances intended to prevent, destroy, control, repel, or mitigate any insect, rodent, snail, slug, fungus, weed, and any other form of plant or animal life or virus, except virus on or in a living person or other animal which is normally considered to be a pest or which the director may declare to be a pest;
     (b) Any substance or mixture of substances intended to be used as a plant regulator, defoliant or desiccant; and
     (c) Any spray adjuvant.
     (32) "Pesticide dealer" means any person who distributes any of the following pesticides:
     (a) Highly toxic pesticides, as determined under RCW 15.58.040;
     (b) EPA restricted use pesticides or restricted use pesticides which are restricted by rule to distribution by licensed pesticide dealers only; or
     (c) Any other pesticide except those pesticides which are labeled and intended for home and garden use only.
     (33) "Pesticide dealer manager" means the owner or other individual supervising pesticide distribution at one outlet holding a pesticide dealer license.
     (34) "Plant regulator" means any substance or mixture of substances intended through physiological action, to accelerate or retard the rate of growth or maturation, or to otherwise alter the behavior of ornamental or crop plants or their produce, but ((shall)) does not include substances insofar as they are intended to be used as plant nutrients, trace elements, nutritional chemicals, plant inoculants, or soil amendments.
     (35) "Registrant" means the person registering any pesticide under the provisions of this chapter.
     (36) "Restricted use pesticide" means any pesticide or device which, when used as directed or in accordance with a widespread and commonly recognized practice, the director determines, subsequent to a hearing, requires additional restrictions for that use to prevent unreasonable adverse effects on the environment including people, lands, beneficial insects, animals, crops, and wildlife, other than pests.
     (37) "Rodenticide" means any substance or mixture of substances intended to prevent, destroy, repel, or mitigate rodents, or any other vertebrate animal which the director may declare by rule to be a pest.
     (38) "Special local needs registration" means a registration issued by the director pursuant to provisions of section 24(c) of FIFRA.
     (39) "Specific wood destroying organism inspection" means an inspection of a structure for purposes of identifying or verifying evidence of an infestation of wood destroying organisms prior to pest management activities.
     (40) "Spray adjuvant" means any product intended to be used with a pesticide as an aid to the application or to the effect of the pesticide, and which is in a package or container separate from the pesticide. Spray adjuvant includes, but is not limited to, acidifiers, compatibility agents, crop oil concentrates, defoaming agents, drift control agents, modified vegetable oil concentrates, nonionic surfactants, organosilicone surfactants, stickers, and water conditioning agents. Spray adjuvant does not include products that are only intended to mark the location where a pesticide is applied.
     (41) "Structural pest inspector" means any individual who performs the service of conducting a complete wood destroying organism inspection or a specific wood destroying organism inspection.
     (42) "Unreasonable adverse effects on the environment" means any unreasonable risk to people or the environment taking into account the economic, social, and environmental costs and benefits of the use of any pesticide, or as otherwise determined by the director.
     (43) "Weed" means any plant which grows where not wanted.
     (44) "Wood destroying organism" means insects or fungi that consume, excavate, develop in, or otherwise modify the integrity of wood or wood products. Wood destroying organism includes, but is not limited to, carpenter ants, moisture ants, subterranean termites, dampwood termites, beetles in the family Anobiidae, and wood decay fungi (wood rot).
     (45) "Wood destroying organism inspection report" means any written document that reports or comments on the presence or absence of wood destroying organisms, their damage, and/or conducive conditions leading to the establishment of such organisms.

Sec. 310   RCW 15.58.180 and 2008 c 285 s 16 are each amended to read as follows:
     (1) Except as provided in subsections (4) and (5) of this section, it is unlawful for any person to act in the capacity of a pesticide dealer or advertise as or assume to act as a pesticide dealer without first having obtained an annual license from the director. The license expires on the ((master)) business license expiration date. A license is required for each location or outlet located within this state from which pesticides are distributed. A manufacturer, registrant, or distributor who has no pesticide dealer outlet licensed within this state and who distributes pesticides directly into this state must obtain a pesticide dealer license for his or her principal out-of-state location or outlet, but such a licensed out-of-state pesticide dealer is exempt from the pesticide dealer manager requirements.
     (2) Application for a license must be accompanied by a fee of sixty-seven dollars and must be made through the ((master license)) business licensing system and must include the full name of the person applying for the license and the name of the individual within the state designated as the pesticide dealer manager. If the applicant is a partnership, association, corporation, or organized group of persons, the full name of each member of the firm or partnership or the names of the officers of the association or corporation must be given on the application. The application must state the principal business address of the applicant in the state and elsewhere, the name of a person domiciled in this state authorized to receive and accept service of summons of legal notices of all kinds for the applicant, and any other necessary information prescribed by the director.
     (3) It is unlawful for any licensed dealer outlet to operate without a pesticide dealer manager who has a license of qualification.
     (4) This section does not apply to (a) a licensed pesticide applicator who sells pesticides only as an integral part of the applicator's pesticide application service when pesticides are dispensed only through apparatuses used for pesticide application, or (b) any federal, state, county, or municipal agency that provides pesticides only for its own programs.
     (5) A user of a pesticide may distribute a properly labeled pesticide to another user who is legally entitled to use that pesticide without obtaining a pesticide dealer's license if the exclusive purpose of distributing the pesticide is keeping it from becoming a hazardous waste as defined in chapter 70.105 RCW.

Sec. 311   RCW 15.58.235 and 1989 c 380 s 19 are each amended to read as follows:
     (1) If an application for renewal of a pesticide dealer license is not filed on or before the ((master)) business license expiration date, the ((master)) business license delinquency fee ((shall be)) is assessed under chapter 19.02 RCW and ((shall)) must be paid by the applicant before the renewal license is issued.
     (2) If application for renewal of any license provided for in this chapter other than the pesticide dealer license is not filed on or before the expiration date of the license, a penalty equivalent to the license fee ((shall be)) is assessed and added to the original fee, and ((shall)) must be paid by the applicant before the renewal license is issued((: PROVIDED, That)). However, such penalty ((shall)) does not apply if the applicant furnishes an affidavit certifying that he or she has not acted as a licensee subsequent to the expiration of the license.
     (3) Any license for which a renewal application has been made, all other requirements have been met, and the proper fee paid, continues in full force and effect until the director notifies the applicant that the license has been renewed or the application has been denied.

Sec. 312   RCW 18.44.031 and 2010 c 34 s 3 are each amended to read as follows:
     An application for an escrow agent license ((shall)) must be in writing in such form as is prescribed by the director, and ((shall)) must be verified on oath by the applicant. An application for an escrow agent license ((shall)) must include the following:
     (1) The applicant's form of business organization and place of organization;
     (2) Information concerning the identity of the applicant, and its officers, directors, owners, partners, controlling persons, and employees, including fingerprints for submission to the Washington state patrol, the federal bureau of investigation, and any government agency or subdivision authorized to receive information for state and national criminal history background checks; personal history; experience; business record; purposes; and other pertinent facts, as the director may reasonably require. The director may also request criminal history record information, including nonconviction data, as defined by RCW 10.97.030. The department may disseminate nonconviction data obtained under this section only to criminal justice agencies. The applicant must pay the cost of fingerprinting and processing the fingerprints by the department;
     (3) If the applicant is a corporation or limited liability company, the address of its physical location, a list of officers, controlling persons, and directors of such corporation or company and their residential addresses, telephone numbers, and other identifying information as the director may determine by rule. If the applicant is a sole proprietorship or partnership, the address of its business location, a list of owners, partners, or controlling persons and their residential addresses, telephone numbers, and other identifying information as the director may determine by rule. Any information in the application regarding the personal residential address or telephone number of any officer, director, partner, owner, controlling person, or employee is exempt from the public records disclosure requirements of chapter 42.56 RCW;
     (4) In the event the applicant is doing business under an assumed name, a copy of the ((master)) business license with the registered trade name shown;
     (5) The qualifications and business history of the applicant and all of its officers, directors, owners, partners, and controlling persons;
     (6) A personal credit report from a recognized credit reporting bureau satisfactory to the director on all officers, directors, owners, partners, and controlling persons of the applicant;
     (7) Whether any of the officers, directors, owners, partners, or controlling persons have been convicted of any crime within the preceding ten years which relates directly to the business or duties of escrow agents, or have suffered a judgment within the preceding five years in any civil action involving fraud, misrepresentation, any unfair or deceptive act or practice, or conversion;
     (8) The identity of the licensed escrow officer designated by the escrow agent as the designated escrow officer responsible for supervising the agent's escrow activity;
     (9) Evidence of compliance with the bonding and insurance requirements of RCW 18.44.201; and
     (10) Any other information the director may require by rule. The director may share any information contained within a license application, including fingerprints, with the federal bureau of investigation and other regulatory or law enforcement agencies.

Sec. 313   RCW 18.64.011 and 2009 c 549 s 1008 are each reenacted and amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise((, definitions of terms shall be as indicated when used in this chapter)).
     (1) "Administer" means the direct application of a drug or device, whether by injection, inhalation, ingestion, or any other means, to the body of a patient or research subject.
     (2) "Board" means the Washington state board of pharmacy.
     (3) "Compounding" ((shall be)) is the act of combining two or more ingredients in the preparation of a prescription.
     (4) "Controlled substance" means a drug or substance, or an immediate precursor of such drug or substance, so designated under or pursuant to the provisions of chapter 69.50 RCW.
     (5) "Deliver" or "delivery" means the actual, constructive, or attempted transfer from one person to another of a drug or device, whether or not there is an agency relationship.
     (6) "Department" means the department of health.
     (7) "Device" means instruments, apparatus, and contrivances, including their components, parts, and accessories, intended (a) for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in human beings or other animals, or (b) to affect the structure or any function of the body of human beings or other animals.
     (8) "Dispense" means the interpretation of a prescription or order for a drug, biological, or device and, pursuant to that prescription or order, the proper selection, measuring, compounding, labeling, or packaging necessary to prepare that prescription or order for delivery.
     (9) "Distribute" means the delivery of a drug or device other than by administering or dispensing.
     (10) ((The words)) "Drug" and "devices" ((shall)) do not include surgical or dental instruments or laboratory materials, gas and oxygen, therapy equipment, X-ray apparatus or therapeutic equipment, their component parts or accessories, or equipment, instruments, apparatus, or contrivances used to render such articles effective in medical, surgical, or dental treatment, or for use or consumption in or for mechanical, industrial, manufacturing, or scientific applications or purposes((, nor shall the word)). "Drug" also does not include any article or mixture covered by the Washington pesticide control act (chapter 15.58 RCW), as enacted or hereafter amended, nor medicated feed intended for and used exclusively as a feed for animals other than human beings.
     (11) "Drugs" means:
     (a) Articles recognized in the official United States pharmacopoeia or the official homeopathic pharmacopoeia of the United States;
     (b) Substances intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in human beings or other animals;
     (c) Substances (other than food) intended to affect the structure or any function of the body of human beings or other animals; or
     (d) Substances intended for use as a component of any substances specified in (a), (b), or (c) of this subsection, but not including devices or their component parts or accessories.
     (12) "Health care entity" means an organization that provides health care services in a setting that is not otherwise licensed by the state. Health care entity includes a freestanding outpatient surgery center or a freestanding cardiac care center. It does not include an individual practitioner's office or a multipractitioner clinic.
     (13) "Labeling" ((shall)) means the process of preparing and affixing a label to any drug or device container. The label must include all information required by current federal and state law and pharmacy rules.
     (14) "Legend drugs" means any drugs which are required by any applicable federal or state law or regulation to be dispensed on prescription only or are restricted to use by practitioners only.
     (15) "Manufacture" means the production, preparation, propagation, compounding, or processing of a drug or other substance or device or the packaging or repackaging of such substance or device, or the labeling or relabeling of the commercial container of such substance or device, but does not include the activities of a practitioner who, as an incident to his or her administration or dispensing such substance or device in the course of his or her professional practice, prepares, compounds, packages, or labels such substance or device.
     (16) "Manufacturer" shall mean a person, corporation, or other entity engaged in the manufacture of drugs or devices.
     (17) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed utilizing a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (18) "Nonlegend" or "nonprescription" drugs means any drugs which may be lawfully sold without a prescription.
     (19) "Person" means an individual, corporation, government, governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity.
     (20) "Pharmacist" means a person duly licensed by the Washington state board of pharmacy to engage in the practice of pharmacy.
     (21) "Pharmacy" means every place properly licensed by the board of pharmacy where the practice of pharmacy is conducted.
     (22) ((The word)) "Poison" ((shall)) does not include any article or mixture covered by the Washington pesticide control act (chapter 15.58 RCW), as enacted or hereafter amended.
     (23) "Practice of pharmacy" includes the practice of and responsibility for: Interpreting prescription orders; the compounding, dispensing, labeling, administering, and distributing of drugs and devices; the monitoring of drug therapy and use; the initiating or modifying of drug therapy in accordance with written guidelines or protocols previously established and approved for his or her practice by a practitioner authorized to prescribe drugs; the participating in drug utilization reviews and drug product selection; the proper and safe storing and distributing of drugs and devices and maintenance of proper records thereof; the providing of information on legend drugs which may include, but is not limited to, the advising of therapeutic values, hazards, and the uses of drugs and devices.
     (24) "Practitioner" means a physician, dentist, veterinarian, nurse, or other person duly authorized by law or rule in the state of Washington to prescribe drugs.
     (25) "Prescription" means an order for drugs or devices issued by a practitioner duly authorized by law or rule in the state of Washington to prescribe drugs or devices in the course of his or her professional practice for a legitimate medical purpose.
     (26) "Secretary" means the secretary of health or the secretary's designee.
     (27) "Wholesaler" ((shall)) means a corporation, individual, or other entity which buys drugs or devices for resale and distribution to corporations, individuals, or entities other than consumers.

Sec. 314   RCW 18.64.044 and 2005 c 388 s 5 are each amended to read as follows:
     (1) A shopkeeper registered as provided in this section may sell nonprescription drugs, if such drugs are sold in the original package of the manufacturer.
     (2) Every shopkeeper not a licensed pharmacist, desiring to secure the benefits and privileges of this section, is ((hereby)) required to register as a shopkeeper through the ((master license system)) business licensing system established under chapter 19.02 RCW, and he or she ((shall)) must pay the fee determined by the secretary for registration, and on a date to be determined by the secretary thereafter the fee determined by the secretary for renewal of the registration; and ((shall)) must at all times keep said registration or the current renewal thereof conspicuously exposed in the location to which it applies. In event such shopkeeper's registration is not renewed by the ((master)) business license expiration date, no renewal or new registration ((shall)) may be issued except upon payment of the registration renewal fee and the ((master)) business license delinquency fee under chapter 19.02 RCW. This registration fee ((shall)) does not authorize the sale of legend drugs or controlled substances.
     (3) The registration fees determined by the secretary under subsection (2) of this section ((shall)) may not exceed the cost of registering the shopkeeper.
     (4) Any shopkeeper who ((shall)) vends or sells, or offers to sell to the public any such nonprescription drug or preparation without having registered to do so as provided in this section, ((shall be)) is guilty of a misdemeanor and each sale or offer to sell ((shall)) constitutes a separate offense.
     (5) A shopkeeper who is not a licensed pharmacy may purchase products containing any detectable quantity of ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, isomers, or salts of isomers, only from a wholesaler licensed by the department under RCW 18.64.046 or from a manufacturer licensed by the department under RCW 18.64.045. The board ((shall)) must issue a warning to a shopkeeper who violates this subsection, and may suspend or revoke the registration of the shopkeeper for a subsequent violation.
     (6) A shopkeeper who has purchased products containing any detectable quantity of ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, isomers, or salts of isomers, in a suspicious transaction as defined in RCW 69.43.035, is subject to the following requirements:
     (a) The shopkeeper may not sell any quantity of ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, isomers, or salts of isomers, if the total monthly sales of these products exceed ten percent of the shopkeeper's total prior monthly sales of nonprescription drugs in March through October. In November through February, the shopkeeper may not sell any quantity of ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, isomers, or salts of isomers, if the total monthly sales of these products exceed twenty percent of the shopkeeper's total prior monthly sales of nonprescription drugs. For purposes of this section, "monthly sales" means total dollars paid by buyers. The board may suspend or revoke the registration of a shopkeeper who violates this subsection.
     (b) The shopkeeper ((shall)) must maintain inventory records of the receipt and disposition of nonprescription drugs, utilizing existing inventory controls if an auditor or investigator can determine compliance with (a) of this subsection, and otherwise in the form and manner required by the board. The records must be available for inspection by the board or any law enforcement agency and must be maintained for two years. The board may suspend or revoke the registration of a shopkeeper who violates this subsection. For purposes of this subsection, "disposition" means the return of product to the wholesaler or distributor.

Sec. 315   RCW 19.02.010 and 1982 c 182 s 1 are each amended to read as follows:
     (1) Experience under the pilot program of the business coordination act suggests that the number of state licenses required for new businesses and the renewal of existing licenses places an undue burden on business. Studies under this act also show that the state can reduce its costs by coordinating and consolidating application forms, information, and licenses. Therefore, the legislature extends the business coordination act by establishing a business license program and license center to develop and implement the following goals and objectives:
     (((1))) (a) The first goal of this system is to provide a convenient, accessible, and timely one-stop system for the business community to acquire and maintain the necessary state licenses to conduct business. This system ((shall)) must be developed and operated in the most cost-efficient manner for the business community and state. The objectives of this goal are:
     (((a))) (i) To provide a service whereby information is available to the business community concerning all state licensing and regulatory requirements, and to the extent feasible, include local and federal information concerning the same regulated activities;
     (((b))) (ii) To provide a system which ((will)) enables state agencies to efficiently store, retrieve, and exchange license information with due regard to privacy statutes; to issue and renew ((master)) business licenses where such licenses are appropriate; and to provide appropriate support services for this objective;
     (((c))) (iii) To provide at designated locations one consolidated application form to be completed by any given applicant; and
     (((d))) (iv) To provide a statewide system of common business identification.
     (((2))) (b) The second goal of this system is to aid business and the growth of business in Washington state by instituting a ((master)) business license system that ((will)) reduces the paperwork burden on business, and promotes the elimination of obsolete and duplicative licensing requirements by consolidating existing licenses and applications.
     (2) It is the intent of the legislature that the authority for determining if a requested license ((shall be)) is issued ((shall)) remains with the agency legally authorized to issue the license.
     (3) It is the further intent of the legislature that those licenses which no longer serve a useful purpose in regulating certain business activities should be eliminated.

Sec. 316   RCW 19.02.020 and 2011 c 298 s 4 are each reenacted and amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Business license" means the single document designed for public display issued by the business licensing service, which certifies state agency or local government license approval and which incorporates the endorsements for individual licenses included in the business licensing system, which the state or local government requires for any person subject to this chapter.
     (2) "Business license application" means a document incorporating pertinent data from existing applications for licenses covered under this chapter.
     (3) "Business ((license center)) licensing service" means the business registration and licensing ((center)) service established by this chapter and located in and under the administrative control of the department ((of revenue)).
     (((2))) (4) "Department" means the department of revenue.
     (((3))) (5) "Director" means the director of ((revenue)) the department.
     (((4))) (6) "License" means the whole or part of any agency or local government permit, license, certificate, approval, registration, charter, or any form or permission required by law, including agency rule, to engage in any activity.
     (((5))) (7) "License information packet" means a collection of information about licensing requirements and application procedures custom-assembled for each request.
     (((6) "Master application" means a document incorporating pertinent data from existing applications for licenses covered under this chapter.
     (7) "Master license" means the single document designed for public display issued by the business license center which certifies state agency or local government license approval and which incorporates the endorsements for individual licenses included in the master license system, which the state or local government requires for any person subject to this chapter.))
     (8) "Participating local government" means a municipal corporation or political subdivision that participates in the ((master license)) business licensing system established by this chapter.
     (9) "Person" means any individual, sole proprietorship, partnership, association, cooperative, corporation, nonprofit organization, state or local government agency, and any other organization required to register with the state or a participating local government to do business in the state or the participating local government and to obtain one or more licenses from the state or any of its agencies or the participating local government.
     (10) "Regulatory" means all licensing and other governmental or statutory requirements pertaining to business or professional activities.
     (11) "Regulatory agency" means any state agency, board, commission, division, or local government that regulates one or more professions, occupations, industries, businesses, or activities.
     (12) "Renewal application" means a document used to collect pertinent data for renewal of licenses covered under this chapter.
     (13) "System" or "((master license)) business licensing system" means the procedure by which ((master)) business licenses are issued and renewed, license and regulatory information is collected and disseminated with due regard to privacy statutes, and account data is exchanged by the agencies and participating local governments.

Sec. 317   RCW 19.02.030 and 2011 c 298 s 5 are each amended to read as follows:
     (1) There is located within the department a business ((license center)) licensing service.
     (2) The duties of the ((center)) business licensing service include:
     (a) Developing and administering a computerized one-stop ((master license)) business licensing system capable of storing, retrieving, and exchanging license information with due regard to privacy statutes, as well as issuing and renewing ((master)) business licenses in an efficient manner;
     (b) Providing a license information service detailing requirements to establish or engage in business in this state;
     (c) Providing for staggered ((master)) business license renewal dates;
     (d) Identifying types of licenses appropriate for inclusion in the ((master license)) business licensing system;
     (e) Recommending in reports to the governor and the legislature the elimination, consolidation, or other modification of duplicative, ineffective, or inefficient licensing or inspection requirements; and
     (f) Incorporating licenses into the ((master license)) business licensing system.
     (3) The department may adopt under chapter 34.05 RCW such rules as may be necessary to effectuate the purposes of this chapter.

Sec. 318   RCW 19.02.035 and 1982 c 182 s 4 are each amended to read as follows:
     (1) The business ((license center shall)) licensing service must compile information regarding the regulatory programs associated with each of the licenses obtainable under the ((master license)) business licensing system. This information ((shall)) must include, at a minimum, a listing of the statutes and administrative rules requiring the licenses and pertaining to the regulatory programs that are directly related to the licensure. For example, for pesticide dealers' licenses, the information ((shall)) must include the statutes and rules requiring licensing as well as those pertaining to the subject of registering or distributing pesticides.
     (2) The business ((license center shall)) licensing service must provide information governed by this section to any person requesting it. Materials used by the ((center)) business licensing service to describe ((the)) its services ((provided by the center shall)) must indicate that this information is available upon request.

Sec. 319   RCW 19.02.070 and 2011 c 298 s 7 are each amended to read as follows:
     (1) Any person requiring licenses ((which)) that have been incorporated into the system must submit a ((master)) business license application to the department requesting the issuance of the licenses. The ((master)) business license application form must contain in consolidated form information necessary for the issuance of the licenses.
     (2) The applicant must include with the application the sum of all fees and deposits required for the requested individual license endorsements as well as the handling fee established by the department under the authority of RCW 19.02.075.
     (3) Irrespective of any authority delegated to the department to implement the provisions of this chapter, the authority for approving issuance and renewal of any requested license that requires a prelicensing or renewal investigation, inspection, testing, or other judgmental review by the regulatory agency otherwise legally authorized to issue the license must remain with that agency. The business ((license center)) licensing service has the authority to issue those licenses for which proper fee payment and a completed application form have been received and for which no prelicensing or renewal approval action is required by the regulatory agency.
     (4) Upon receipt of the application and proper fee payment for any license for which issuance is subject to regulatory agency action under subsection (3) of this section, the department must immediately notify the regulatory agency with authority to approve issuance or renewal of the license requested by the applicant. Each regulatory agency must advise the department within a reasonable time after receiving the notice: (a) That the agency approves the issuance of the requested license and will advise the applicant of any specific conditions required for issuing the license; (b) that the agency denies the issuance of the license and gives the applicant reasons for the denial; or (c) that the application is pending.
     (5) The department must issue a ((master)) business license endorsed for all the approved licenses to the applicant and advise the applicant of the status of other requested licenses. It is the responsibility of the applicant to contest the decision regarding conditions imposed or licenses denied through the normal process established by statute or by the regulatory agency with the authority for approving issuance of the license.
     (6) Regulatory agencies must be provided information from the ((master)) business license application for their licensing and regulatory functions.

Sec. 320   RCW 19.02.075 and 2011 c 298 s 8 are each amended to read as follows:
     (1) The department must collect a handling fee on each ((master)) business license application and each business license renewal application filing. The department must set the amount of the handling fees by rule, as authorized by RCW 19.02.030. The handling fees may not exceed nineteen dollars for each ((master)) business license application, and eleven dollars for each business license renewal application filing, and must be deposited in the ((master)) business license ((fund)) account. The department may increase handling and renewal fees for the purposes of making improvements in the ((master license)) business licensing service program, including improvements in technology and customer services, expanded access, and infrastructure.
     (2) The department may waive the fees imposed in subsection (1) of this section for good cause. The department's decision whether or not to waive a fee may not be overturned by any court except upon a showing by clear and convincing evidence that the department acted arbitrarily in making its decision.

Sec. 321   RCW 19.02.080 and 1992 c 107 s 3 are each amended to read as follows:
     All fees collected under the system ((shall)) must be deposited with the state treasurer. Upon issuance or renewal of the ((master)) business license or supplemental licenses, the department ((shall)) must distribute the fees, except for fees covered under RCW 19.02.210 and for fees covered under RCW 19.80.075, to the appropriate accounts under the applicable statutes for those agencies' licenses.

Sec. 322   RCW 19.02.085 and 1992 c 107 s 5 are each amended to read as follows:
     To encourage timely renewal by applicants, a ((master)) business license delinquency fee ((shall be)) is imposed on licensees who fail to renew by the ((master)) business license expiration date. The ((master)) business license delinquency fee ((shall)) must be the lesser of one hundred fifty dollars or fifty percent of a base comprised of the licensee's renewal fee minus corporate licensing taxes, corporation annual report fee, and any interest fees or penalties charged for late taxes or corporate renewals. The ((master)) business license delinquency fee ((shall)) must be added to the renewal fee and paid by the licensee before a ((master)) business license ((shall be)) is renewed. The delinquency fee ((shall)) must be deposited in the ((master license fund)) business license account.

Sec. 323   RCW 19.02.090 and 1982 c 182 s 8 are each amended to read as follows:
     (1) The department ((shall)) must assign an expiration date for each ((master)) business license. All renewable licenses endorsed on that ((master)) business license ((shall)) must expire on that date. License fees ((shall)) must be prorated to accommodate the staggering of expiration dates.
     (2) All renewable licenses endorsed on a ((master)) business license ((shall)) must be renewed by the department under conditions originally imposed unless a regulatory agency advises the department of conditions or denials to be imposed before the endorsement is renewed.

Sec. 324   RCW 19.02.100 and 2011 c 298 s 9 are each amended to read as follows:
     (1) The department may ((not)) refuse to issue or renew a ((master)) business license to any person if:
     (a) The person does not have a valid tax registration, if required by a regulatory agency;
     (b) The person is a corporation delinquent in fees or penalties owing to the secretary of state or is not validly registered under Title 23B RCW, chapter 18.100 RCW, Title 24 RCW, or any other statute now or hereafter adopted which gives corporate or business licensing responsibilities to the secretary of state if the person is required to be so registered and the regulatory agency issuing or renewing the license requires, as a condition of approving the issuance or renewal of the license, that the person be so registered or not delinquent in fees or penalties owing to the secretary of state; or
     (c) The person has not submitted the sum of all fees and deposits required for the requested individual license endorsements, any outstanding ((master)) business license delinquency fee, or other fees and penalties to be collected through the system.
     (2) Nothing in this section prevents registration by the state of a business for taxation purposes, or an employer for the purpose of paying an employee of that employer industrial insurance or unemployment insurance benefits.
     (((3) The department must immediately suspend the license or certificate of a person who has been certified pursuant to RCW 74.20A.320 by the department of social and health services as a person who is not in compliance with a support order. If the person has continued to meet all other requirements for reinstatement during the suspension, reissuance of the license or certificate is automatic upon the department's receipt of a release issued by the department of social and health services stating that the licensee is in compliance with the order.))

Sec. 325   RCW 19.02.110 and 2007 c 52 s 1 are each amended to read as follows:
     (1) In addition to the licenses processed under the ((master license)) business licensing system prior to April 1, 1982, on July 1, 1982, use of the ((master license)) business licensing system ((shall be)) is expanded as provided by this section.
     (2) Applications for the following ((shall)) must be filed with the business ((license center and shall)) licensing service and must be processed, and renewals ((shall)) must be issued, under the ((master license)) business licensing system:
     (((1))) (a) Nursery dealer's licenses required by chapter 15.13 RCW;
     (((2))) (b) Seed dealer's licenses required by chapter 15.49 RCW;
     (((3))) (c) Pesticide dealer's licenses required by chapter 15.58 RCW;
     (((4))) (d) Shopkeeper's licenses required by chapter 18.64 RCW;
     (((5))) (e) Egg dealer's licenses required by chapter 69.25 RCW.

Sec. 326   RCW 19.02.115 and 2011 c 298 s 12 are each amended to read as follows:
     (1) For purposes of this section:
     (a) "Disclose" means to make known to any person in any manner licensing information;
     (b) "Licensing information" means any information created or obtained by the department in the administration of this chapter and chapters 19.80 and 59.30 RCW, which information relates to any person who: (i) Has applied for or has been issued a license or trade name; or (ii) has been issued an assessment or delinquency fee. Licensing information includes ((master applications, renewal applications, and master)) initial and renewal business license applications, and business licenses; and
     (c) "State agency" means every Washington state office, department, division, bureau, board, commission, or other state agency.
     (2) Licensing information is confidential and privileged, and except as authorized by this section, neither the department nor any other person may disclose any licensing information. Nothing in this chapter requires any person possessing licensing information made confidential and privileged by this section to delete information from such information so as to permit its disclosure.
     (3) This section does not prohibit the department of revenue from:
     (a) Disclosing licensing information in a civil or criminal judicial proceeding or an administrative proceeding:
     (i) In which the person about whom such licensing information is sought and the department, another state agency, or a local government are adverse parties in the proceeding; or
     (ii) Involving a dispute arising out of the department's administration of chapter ((19.02,)) 19.80((,)) or 59.30 RCW, or this chapter if the licensing information relates to a party in the proceeding;
     (b) Disclosing, subject to such requirements and conditions as the director prescribes by rules adopted pursuant to chapter 34.05 RCW, such licensing information regarding a license applicant or license holder to such license applicant or license holder or to such person or persons as that license applicant or license holder may designate in a request for, or consent to, such disclosure, or to any other person, at the license applicant's or license holder's request, to the extent necessary to comply with a request for information or assistance made by the license applicant or license holder to such other person. However, licensing information not received from the license applicant or holder must not be so disclosed if the director determines that such disclosure would compromise any investigation or litigation by any federal, state, or local government agency in connection with the civil or criminal liability of the license applicant, license holder, or another person, or that such disclosure would identify a confidential informant, or that such disclosure is contrary to any agreement entered into by the department that provides for the reciprocal exchange of information with other government agencies, which agreement requires confidentiality with respect to such information unless such information is required to be disclosed to the license applicant or license holder by the order of any court;
     (c) Publishing statistics so classified as to prevent the identification of particular licensing information;
     (d) Disclosing licensing information for official purposes only, to the governor or attorney general, or to any state agency, or to any committee or subcommittee of the legislature dealing with matters of taxation, revenue, trade, commerce, the control of industry or the professions, or licensing;
     (e) Permitting the department's records to be audited and examined by the proper state officer, his or her agents and employees;
     (f) Disclosing any licensing information to a peace officer as defined in RCW 9A.04.110 or county prosecuting attorney, for official purposes. The disclosure may be made only in response to a search warrant, subpoena, or other court order, unless the disclosure is for the purpose of criminal tax or license enforcement. A peace officer or county prosecuting attorney who receives the licensing information may disclose that licensing information only for use in the investigation and a related court proceeding, or in the court proceeding for which the licensing information originally was sought;
     (g) Disclosing, in a manner that is not associated with other licensing information, the name of a license applicant or license holder, entity type, registered trade name, business address, mailing address, unified business identifier number, list of licenses issued to a person through the ((master license)) business licensing system established in this chapter ((19.02 RCW)) and their issuance and expiration dates, and the dates of opening of a business((. The department is authorized to give, sell, or provide access to lists of licensing information under this subsection (3)(g) that will be used for commercial purposes));
     (h) Disclosing licensing information that is also maintained by another Washington state or local governmental agency as a public record available for inspection and copying under the provisions of chapter 42.56 RCW or is a document maintained by a court of record and is not otherwise prohibited from disclosure;
     (i) Disclosing any licensing information when the disclosure is specifically authorized under any other section of the Revised Code of Washington;
     (j) Disclosing licensing information to the proper officer of the licensing or tax department of any city, town, or county of this state, for official purposes. If the licensing information does not relate to a license issued by the city, town, or county requesting the licensing information, disclosure may be made only if the laws of the requesting city, town, or county grants substantially similar privileges to the proper officers of this state; or
     (k) Disclosing licensing information to the federal government for official purposes.
     (4) The department may refuse to disclose licensing information that is otherwise disclosable under subsection (3) of this section if such disclosure would violate federal law or any information sharing agreement between the state and federal government.
     (5) Any person acquiring knowledge of any licensing information in the course of his or her employment with the department and any person acquiring knowledge of any licensing information as provided under subsection (3)(d), (e), (f), (j), or (k) of this section, who discloses any such licensing information to another person not entitled to knowledge of such licensing information under the provisions of this section, is guilty of a misdemeanor. If the person guilty of such violation is an officer or employee of the state, such person must forfeit such office or employment and is incapable of holding any public office or employment ((in this state)) with the state or any local governmental entity in this state for a period of two years thereafter.

Sec. 327   RCW 19.02.210 and 1992 c 107 s 4 are each amended to read as follows:
     The ((master license fund)) business license account is created in the state treasury. Unless otherwise indicated in RCW 19.02.075, all receipts from handling and ((master)) business license delinquency fees ((shall)) must be deposited into the ((fund)) account. Moneys in the ((fund)) account may be spent only after appropriation beginning in fiscal year 1993. Expenditures from the ((fund)) account may be used only to administer the ((master license services)) business licensing service program.

Sec. 328   RCW 19.02.310 and 2005 c 201 s 1 are each amended to read as follows:
     (1) Subject to the availability of amounts appropriated for this specific purpose, the department ((shall)) may administer a performance-based grant program that provides funding assistance to public agencies that issue business licenses and that wish to join with the department's ((master)) business licensing service.
     (2) The department may determine among interested grant applicants the order and the amount of the grant. In making grant determinations, consideration must be given, but not limited to, the following criteria: Readiness of the public agency to participate; the number of renewable licenses; and the reduced regulatory impact to businesses subject to licensure relative to the overall investment required by the department.
     (3) The department ((shall)) must invite and encourage participation by all Washington city and county governments having interests or responsibilities relating to business licensing.
     (4) The total amount of grants provided under this section may not exceed seven hundred fifty thousand dollars in any one fiscal year.
     (5) The source of funds for this grant program is the ((master)) business license account.

Sec. 329   RCW 19.02.800 and 2011 c 298 s 10 are each amended to read as follows:
     Except as provided in RCW 43.07.200, the provisions of this chapter regarding the processing of license applications and renewals under ((a master license)) the business licensing system do not apply to those business or professional activities that are licensed or regulated under chapter 31.04, 31.12, or 31.13 RCW or under Title 30, 32, 33, or 48 RCW.

Sec. 330   RCW 19.02.890 and 1982 c 182 s 18 are each amended to read as follows:
     This chapter may be known and cited as the business ((license center)) licensing service act.

NEW SECTION.  Sec. 331   A new section is added to chapter 19.80 RCW to read as follows:
     (1) The department may cancel a trade name when it has revoked a business's certificate of registration as provided in RCW 82.32.215, when the department has closed a business's tax reporting account, or when the business's business license, as defined in RCW 19.02.020, is inactive.
     (2) The department may also provide for the cancellation of trade names under circumstances as defined by the department by rule.
     (3) The department must notify a person in writing at the person's last known address on record with the department that the person's trade name has been canceled. Except as otherwise provided in this subsection, the department must reinstate a canceled trade name if, within sixty days of sending the notice required under this subsection, the person requests that the trade name be reinstated and pays any applicable renewal fees. The department may not reinstate a trade name if the person's certificate of registration under RCW 82.32.030 is revoked and has not been reinstated or the department is aware that the person is otherwise not legally entitled to carry on, conduct, or transact business in this state.
     (4) A person whose trade name has been canceled by the department may no longer use such trade name for any purpose.
     (5) The department may remove any canceled trade names from its database of trade names after the period for reinstatement provided in subsection (3) of this section has expired.

Sec. 332   RCW 19.80.010 and 2011 c 298 s 14 are each amended to read as follows:
     Each person or persons who carries on, conducts, or transacts business in this state under any trade name must register that trade name with the department as provided in this section.
     (1) Sole proprietorship or general partnership: The registration must set forth the true and real name or names of each person conducting the same, together with the post office address or addresses of each such person and the name of the general partnership, if applicable.
     (2) Foreign or domestic limited partnership: The registration must set forth the limited partnership name as filed with the office of the secretary of state.
     (3) Foreign or domestic limited liability company: The registration must set forth the limited liability company name as filed with the office of the secretary of state.
     (4) Foreign or domestic corporation: The registration must set forth the corporate name as filed with the office of the secretary of state.
     (5) Other business entities: The registration must set forth the entity's name as required by the department.

Sec. 333   RCW 19.80.075 and 2011 c 298 s 17 are each amended to read as follows:
     All fees collected by the department under this chapter must be deposited with the state treasurer and credited to the ((master license fund)) business license account.

Sec. 334   RCW 19.94.015 and 2011 c 298 s 19 and 2011 c 103 s 38 are each reenacted and amended to read as follows:
     (1) Except as provided in subsection (4) of this section for the initial registration of an instrument or device, no weighing or measuring instrument or device may be used for commercial purposes in the state unless its commercial use is registered annually. If its commercial use is within a city that has a city sealer and a weights and measures program as provided by RCW 19.94.280, the commercial use of the instrument or device must be registered with the city if the city has adopted fees pursuant to subsection (2) of this section. If its commercial use is outside of such a city, the commercial use of the instrument or device must be registered with the department.
     (2) A city with such a sealer and program may establish an annual fee for registering the commercial use of such a weighing or measuring instrument or device with the city. The annual fee may not exceed the fee established in RCW 19.94.175 for registering the use of a similar instrument or device with the department. Fees upon weighing or measuring instruments or devices within the jurisdiction of the city that are collected under this subsection by city sealers must be deposited into the general fund, or other account, of the city as directed by the governing body of the city.
     (3) Registrations with the department are accomplished as part of the ((master license)) business licensing system under chapter 19.02 RCW. Payment of the registration fee for a weighing or measuring instrument or device under the ((master license)) business licensing system constitutes the registration required by this section.
     (4) The fees established by or under RCW 19.94.175 for registering a weighing or measuring instrument or device must be paid to the department of revenue concurrently with an application for a ((master)) business license under chapter 19.02 RCW or with the annual renewal of a ((master)) business license under chapter 19.02 RCW. A weighing or measuring instrument or device must be initially registered with the state at the time the owner applies for a ((master)) business license for a new business or at the first renewal of the license that occurs after the instrument or device is first placed into commercial use. The department of revenue must remit to the department of agriculture all fees collected under this provision less reasonable collection expenses.
     (5) Each city charging registration fees under this section must notify the department of agriculture at the time such fees are adopted and whenever changes in the fees are adopted.

Sec. 335   RCW 19.94.2582 and 2006 c 358 s 5 are each amended to read as follows:
     (1) Each request for an official registration certificate ((shall)) must be in writing, under oath, and on a form prescribed by the department and shall contain any relevant information as the director may require, including but not limited to the following:
     (a) The name and address of the person, corporation, partnership, or sole proprietorship requesting registration;
     (b) The names and addresses of all individuals requesting an official registration certificate from the department; and
     (c) The tax registration number as required under RCW 82.32.030 or uniform business identifier provided on a ((master)) business license issued under RCW 19.02.070.
     (2) Each individual when submitting a request for an official registration certificate or a renewal of such a certificate ((shall)) must pay a fee to the department in the amount of one hundred sixty dollars per individual.
     (3) The department ((shall)) must issue a decision on a request for an official registration certificate within twenty days of receipt of the request. If an individual is denied their request for an official registration certificate, the department must notify that individual in writing stating the reasons for the denial and ((shall)) must refund any payments made by that individual in connection with the request.

Sec. 336   RCW 35.21.392 and 2011 c 298 s 22 are each amended to read as follows:
     A city that issues a business license to a person required to be registered under chapter 18.27 RCW may verify that the person is registered under chapter 18.27 RCW and report violations to the department of labor and industries. The department of revenue must conduct the verification for cities that participate in the ((master license)) business licensing system.

Sec. 337   RCW 35.21.392 and 2011 c 298 s 22 are each amended to read as follows:
     A city that issues a business license to a person required to be registered under chapter 18.27 RCW may verify that the person is registered under chapter 18.27 RCW and report violations to the department of labor and industries. The department of revenue must conduct the verification for cities that participate in the ((master license)) business licensing system.

Sec. 338   RCW 35A.21.340 and 2011 c 298 s 23 are each amended to read as follows:
     A city that issues a business license to a person required to be registered under chapter 18.27 RCW may verify that the person is registered under chapter 18.27 RCW and report violations to the department of labor and industries. The department of revenue must conduct the verification for cities that participate in the ((master license)) business licensing system.

Sec. 339   RCW 36.110.130 and 1995 c 154 s 3 are each amended to read as follows:
     In the event of a failure such as a bankruptcy or dissolution, of a private sector business, industry, or nonprofit organization engaged in a free venture industry agreement, responsibility for obligations under Title 51 RCW ((shall)) must be borne by the city or county responsible for establishment of the free venture industry agreement, as if the city or county had been the employing agency. To ensure that this obligation can be clearly identified and accomplished, and to provide accountability for purposes of the department of labor and industries, a free venture jail industry agreement entered into by a city or county and private sector business, industry, or nonprofit organization should be filed under a separate ((master)) business license application in accordance with chapter 19.02 RCW, establishing a new and separate account with the department of labor and industries, and not be reported under an existing account for parties to the agreement.

Sec. 340   RCW 43.22.035 and 2007 c 287 s 2 are each amended to read as follows:
     When an employer initially files a ((master)) business license application under chapter 19.02 RCW for the purpose, in whole or in part, of registering to pay industrial insurance taxes, the department ((shall)) must send to the employer any printed material the department recommends or requires the employer to post. Any time the printed material has substantive changes in the information, the department ((shall)) must send a copy to each employer.

Sec. 341   RCW 46.72A.020 and 2011 c 374 s 2 are each amended to read as follows:
     (1) Contact by a customer or customer's agent to engage the services of a carrier's limousine must be initiated by a customer or customer's agent at a time and place different from the customer's time and place of departure. The fare for service must be agreed upon prior to departure. Under no circumstances may customers or customers' agents make arrangements to immediately engage the services of a carrier's limousine with the chauffeur, even if the chauffeur is an owner or officer of the company, with the single exception of stand-hail limousines only at a facility owned and operated by a port district in a county with a population of one million or more that are licensed and restricted by the rules and policies set forth by the port district.
     (2) At the time of the conduct of the commercial limousine business, the chauffeur of a limousine and the limousine carrier business must possess written or electronic records substantiating the prearrangement of the carrier's services for any customer carried for compensation, except for vehicles meeting the requirements of the exception for stand-hail limousines described in subsection (1) of this section. Limousine carriers and limousine chauffeurs operating as an independent business must list a physical address on their ((master)) business license issued under chapter 19.02 RCW where records substantiating the prearrangement of the carrier's services may be reviewed by an enforcement officer. A limousine carrier must retain these records for a minimum of one calendar year, and failure to do so is a class 3 civil infraction against the carrier for each record that is missing or fails to include all of the information described in rules adopted under subsection (4) of this section.
     (3) Limousine carriers and limousine chauffeurs operating as an independent business must list a telephone or pager number that is used to prearrange the carrier's services for any customer carried for compensation.
     (4) The department ((shall)) must adopt rules specifying the content and retention schedule of the records required for compliance with subsection (2) of this section.
     (5) The failure of a chauffeur who is operating a limousine to immediately provide, on demand by an enforcement officer, written or electronic records required by the department substantiating the prearrangement of the carrier's services for any customer carried for compensation, except for limousines meeting the requirements of the exception for stand-hail limousines described in subsection (1) of this section, is a class 2 civil infraction and is subject to monetary penalties under RCW 7.80.120. It is a class 1 civil infraction for a repeat offense under this subsection during the same calendar year.
     (6) The department ((shall)) must define by rule conditions under which a chauffeur is considered to be operating a limousine, including when the limousine is parked in a designated passenger load zone.

Sec. 342   RCW 50.12.290 and 2007 c 287 s 1 are each amended to read as follows:
     When an employer initially files a ((master)) business license application under chapter 19.02 RCW for the purpose, in whole or in part, of registering to pay unemployment insurance taxes, the employment security department ((shall)) must send to the employer any printed material the department recommends or requires the employer to post. Any time the printed material has substantive changes in the information, the department ((shall)) must send a copy to each employer.

Sec. 343   RCW 59.30.050 and 2011 c 298 s 31 are each amended to read as follows:
     (1) The department must annually register all manufactured/mobile home communities. Each community must be registered separately. The department must deliver by certified mail registration notifications to all known manufactured/mobile home community landlords. Registration information packets must include:
     (a) Registration forms; and
     (b) Registration assessment information, including registration due dates and late fees, and the collections procedures, liens, and charging costs to tenants.
     (2) To apply for registration, the landlord of a manufactured/mobile home community must file with the department an application for registration on a form provided by the department and must pay a registration fee as described in subsection (3) of this section. The department may require the submission of information necessary to assist in identifying and locating a manufactured/mobile home community and other information that may be useful to the state, which must include, at a minimum:
     (a) The names and addresses of the owners of the manufactured/mobile home community;
     (b) The name and address of the manufactured/mobile home community;
     (c) The name and address of the landlord and manager of the manufactured/mobile home community;
     (d) The number of lots within the manufactured/mobile home community that are subject to chapter 59.20 RCW; and
     (e) The addresses of each manufactured/mobile home lot within the manufactured/mobile home community that is subject to chapter 59.20 RCW.
     (3) Each manufactured/mobile home community landlord must pay to the department:
     (a) A one-time ((master)) business license application fee for the first year of registration and, in subsequent years, an annual ((master)) renewal application fee, as provided in RCW 19.02.075; and
     (b) An annual registration assessment of ten dollars for each manufactured/mobile home that is subject to chapter 59.20 RCW within a manufactured/mobile home community. Manufactured/mobile home community landlords may charge a maximum of five dollars of this assessment to tenants. Nine dollars of the registration assessment for each manufactured/mobile home must be deposited into the manufactured/mobile home dispute resolution program account created in RCW 59.30.070 to fund the costs associated with the manufactured/mobile home dispute resolution program. The remaining one dollar must be deposited into the ((master license fund)) business license account created in RCW 19.02.210. The annual registration assessment must be reviewed once each biennium by the department and the attorney general and may be adjusted to reasonably relate to the cost of administering this chapter. The registration assessment may not exceed ten dollars, but if the assessment is reduced, the portion allocated to the manufactured/mobile home dispute resolution program account and the ((master license fund)) business license account must be adjusted proportionately.
     (4) Initial registrations of manufactured/mobile home communities must be filed before November 1, 2007, or within three months of the availability of mobile home lots for rent within the community. The manufactured/mobile home community is subject to a delinquency fee of two hundred fifty dollars for late initial registrations. The delinquency fee must be deposited in the ((master license fund)) business license account. Renewal registrations that are not renewed by the expiration date as assigned by the department are subject to delinquency fees under RCW 19.02.085.
     (5) Thirty days after sending late fee notices to a noncomplying landlord, the department may issue a warrant under RCW 59.30.090 for the unpaid registration assessment and delinquency fee. If a warrant is issued by the department under RCW 59.30.090, the department must add a penalty of ten percent of the amount of the unpaid registration assessment and delinquency fee, but not less than ten dollars. The warrant penalty must be deposited into the ((master license fund)) business license account created in RCW 19.02.210. Chapter 82.32 RCW applies to the collection of warrants issued under RCW 59.30.090.
     (6) Registration is effective on the date determined by the department, and the department must issue a registration number to each registered manufactured/mobile home community. The department must provide an expiration date, assigned by the department, to each manufactured/mobile home community who registers.

Sec. 344   RCW 59.30.090 and 2011 c 298 s 33 are each amended to read as follows:
     (1) If any registration assessment or delinquency fee is not paid in full within thirty days after sending late fee notices to a noncomplying landlord, the department may issue a warrant in the amount of such unpaid sums, together with interest thereon from the date the warrant is issued until the date of payment.
     (2) Interest must be computed on a daily basis on the amount of outstanding registration assessment and delinquency fee imposed under RCW 59.30.050 at the rate as computed under RCW 82.32.050(2). The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year. Interest must be deposited in the ((master license fund)) business license account created in RCW 19.02.210.
     (3) The department may file a copy of the warrant with the clerk of the superior court of any county of the state in which real or personal property of the owner of the manufactured/mobile home community may be found. The clerk is entitled to a filing fee under RCW 36.18.012(10). Upon filing, the clerk must enter in the judgment docket the name of the owner of the manufactured/mobile home community mentioned in the warrant and the amount of the registration assessment and delinquency fee, or portion thereof, and any increases and penalties for which the warrant is issued, and the date when the copy is filed.
     (4) The amount of the warrant so docketed becomes a lien upon the title to, and interest in, all real and personal property of the owner of the manufactured/mobile home community against whom the warrant is issued the same as a judgment in a civil case duly docketed in the office of the clerk. The warrant so docketed is sufficient to support the issuance of writs of garnishment in favor of the state in the manner provided by law in the case of judgments wholly or partially unsatisfied.
     (5) The lien is not superior to bona fide interests of third persons that had vested prior to the filing of the warrant. The phrase "bona fide interests of third persons" does not include any mortgage of real or personal property or any other credit transaction that results in the mortgagee or the holder of the security acting as trustee for unsecured creditors of the owner of the manufactured/mobile home community mentioned in the warrant who executed the chattel or real property mortgage or the document evidencing the credit transaction.

Sec. 345   RCW 69.25.020 and 2011 c 306 s 1 are each reenacted and amended to read as follows:
     ((When used in this chapter the following terms shall have the indicated meanings,)) The definitions in this section apply throughout this chapter unless the context otherwise requires:
     (1) "Adulterated" applies to any egg or egg product under one or more of the following circumstances:
     (a) If it bears or contains any poisonous or deleterious substance which may render it injurious to health; but in case the substance is not an added substance, such article ((shall)) is not ((be)) considered adulterated under this clause if the quantity of such substance in or on such article does not ordinarily render it injurious to health;
     (b) If it bears or contains any added poisonous or added deleterious substance (other than one which is: (i) A pesticide chemical in or on a raw agricultural commodity; (ii) a food additive; or (iii) a color additive) which may, in the judgment of the director, make such article unfit for human food;
     (c) If it is, in whole or in part, a raw agricultural commodity and such commodity bears or contains a pesticide chemical which is unsafe within the meaning of RCW 69.04.392, as enacted or hereafter amended;
     (d) If it bears or contains any food additive which is unsafe within the meaning of RCW 69.04.394, as enacted or hereafter amended;
     (e) If it bears or contains any color additive which is unsafe within the meaning of RCW 69.04.396; however, an article which is not otherwise deemed adulterated under ((subsection (1)))(c), (d), or (e) of this ((section shall)) subsection are nevertheless ((be)) deemed adulterated if use of the pesticide chemical, food additive, or color additive, in or on such article, is prohibited by regulations of the director in official plants;
     (f) If it consists in whole or in part of any filthy, putrid, or decomposed substance, or if it is otherwise unfit for human food;
     (g) If it consists in whole or in part of any damaged egg or eggs to the extent that the egg meat or white is leaking, or it has been contacted by egg meat or white leaking from other eggs;
     (h) If it has been prepared, packaged, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health;
     (i) If it is an egg which has been subjected to incubation or the product of any egg which has been subjected to incubation;
     (j) If its container is composed, in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health;
     (k) If it has been intentionally subjected to radiation, unless the use of the radiation was in conformity with a regulation or exemption in effect pursuant to RCW 69.04.394; or
     (l) If any valuable constituent has been in whole or in part omitted or abstracted therefrom; or if any substance has been substituted, wholly or in part therefor; or if damage or inferiority has been concealed in any manner; or if any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is.
     (2) "Ambient temperature" means the atmospheric temperature surrounding or encircling shell eggs.
     (3) "At retail" means any transaction in intrastate commerce between a retailer and a consumer.
     (4) "Candling" means the examination of the interior of eggs by the use of transmitted light used in a partially dark room or place.
     (5) "Capable of use as human food" shall apply to any egg or egg product unless it is denatured, or otherwise identified, as required by regulations prescribed by the director, to deter its use as human food.
     (6) "Check" means an egg that has a broken shell or crack in the shell but has its shell membranes intact and contents not leaking.
     (7) "Clean and sound shell egg" means any egg whose shell is free of adhering dirt or foreign material and is not cracked or broken.
     (8) "Consumer" means any person who purchases eggs for his or her own family use or consumption; or any restaurant, hotel, boarding house, bakery, or other institution or concern which purchases eggs for serving to guests or patrons thereof, or for its own use in cooking or baking.
     (9) "Container" or "package" includes any box, can, tin, plastic, or other receptacle, wrapper, or cover.
     (10) "Department" means the department of agriculture of the state of Washington.
     (11) "Director" means the director of the department or his duly authorized representative.
     (12) "Dirty egg" means an egg that has a shell that is unbroken and has adhering dirt or foreign material.
     (13) "Egg" means the shell egg of the domesticated chicken, turkey, duck, goose, or guinea, or any other specie of fowl.
     (14) "Egg handler" or "dealer" means any person who produces, contracts for or obtains possession or control of any eggs or egg products for the purpose of sale to another dealer or retailer, or for processing and sale to a dealer, retailer or consumer. For the purpose of this chapter, "sell" or "sale" includes the following: Offer for sale, expose for sale, have in possession for sale, exchange, barter, trade, or as an inducement for the sale of another product.
     (15)(a) "Egg product" means any dried, frozen, or liquid eggs, with or without added ingredients, excepting products which contain eggs only in a relatively small proportion, or historically have not been, in the judgment of the director, considered by consumers as products of the egg food industry, and which may be exempted by the director under such conditions as the director may prescribe to assure that the egg ingredients are not adulterated and are not represented as egg products.
     (b) The following products are not included in the definition of "egg product" if they are prepared from eggs or egg products that have been either inspected by the United States department of agriculture or by the department under a cooperative agreement with the United States department of agriculture: Freeze-dried products, imitation egg products, egg substitutes, dietary foods, dried no-bake custard mixes, eggnog mixes, acidic dressings, noodles, milk and egg dip, cake mixes, French toast, balut and other similar ethnic delicacies, and sandwiches containing eggs or egg products.
     (16) "Immediate container" means any consumer package, or any other container in which egg products, not consumer-packaged, are packed.
     (17) "Incubator reject" means an egg that has been subjected to incubation and has been removed from incubation during the hatching operations as infertile or otherwise unhatchable.
     (18) "Inedible" means eggs of the following descriptions: Black rots, yellow rots, white rots, mixed rots (addled eggs), sour eggs, eggs with green whites, eggs with stuck yolks, moldy eggs, musty eggs, eggs showing blood rings, and eggs containing embryo chicks (at or beyond the blood ring stage).
     (19) "Inspection" means the application of such inspection methods and techniques as are deemed necessary by the director to carry out the provisions of this chapter.
     (20) "Inspector" means any employee or official of the department authorized to inspect eggs or egg products under the authority of this chapter.
     (21) "Intrastate commerce" means any eggs or egg products in intrastate commerce, whether such eggs or egg products are intended for sale, held for sale, offered for sale, sold, stored, transported, or handled in this state in any manner and prepared for eventual distribution in this state, whether at wholesale or retail.
     (22) "Leaker" means an egg that has a crack or break in the shell and shell membranes to the extent that the egg contents are exposed or are exuding or free to exude through the shell.
     (23) "Loss" means an egg that is unfit for human food because it is smashed or broken so that its contents are leaking; or overheated, frozen, or contaminated; or an incubator reject; or because it contains a bloody white, large meat spots, a large quantity of blood, or other foreign material.
     (24) "((Master license)) Business licensing system" means the mechanism established by chapter 19.02 RCW by which ((master)) business licenses, endorsed for individual state-issued licenses, are issued and renewed utilizing a ((master)) business license application and a ((master)) business license expiration date common to each renewable license endorsement.
     (25) "Misbranded" ((shall apply)) applies to egg products ((which)) that are not labeled and packaged in accordance with the requirements prescribed by regulations of the director under RCW 69.25.100.
     (26) "Official certificate" means any certificate prescribed by regulations of the director for issuance by an inspector or other person performing official functions under this chapter.
     (27) "Official device" means any device prescribed or authorized by the director for use in applying any official mark.
     (28) "Official inspection legend" means any symbol prescribed by regulations of the director showing that egg products were inspected in accordance with this chapter.
     (29) "Official mark" means the official inspection legend or any other symbol prescribed by regulations of the director to identify the status of any article under this chapter.
     (30) "Official plant" means any plant which is licensed under the provisions of this chapter, at which inspection of the processing of egg products is maintained by the United States department of agriculture or by the state under cooperative agreements with the United States department of agriculture or by the state.
     (31) "Official standards" means the standards of quality, grades, and weight classes for eggs, adopted under the provisions of this chapter.
     (32) "Pasteurize" means the subjecting of each particle of egg products to heat or other treatments to destroy harmful, viable micro-organisms by such processes as may be prescribed by regulations of the director.
     (33) "Person" means any natural person, firm, partnership, exchange, association, trustee, receiver, corporation, and any member, officer, or employee thereof, or assignee for the benefit of creditors.
     (34) "Pesticide chemical," "food additive," "color additive," and "raw agricultural commodity" ((shall)) have the same meaning for purposes of this chapter as prescribed in chapter 69.04 RCW.
     (35) "Plant" means any place of business where egg products are processed.
     (36) "Processing" means manufacturing egg products, including breaking eggs or filtering, mixing, blending, pasteurizing, stabilizing, cooling, freezing, drying, or packaging egg products.
     (37) "Restricted egg" means any check, dirty egg, incubator reject, inedible, leaker, or loss.
     (38) "Retailer" means any person in intrastate commerce who sells eggs to a consumer.
     (39) "Shipping container" means any container used in packaging a product packed in an immediate container.

Sec. 346   RCW 69.25.050 and 2011 c 306 s 2 are each amended to read as follows:
     (1)(a) No person ((shall)) may act as an egg handler or dealer without first obtaining an annual license and permanent dealer's number from the department.
     (b) Application for an egg dealer license and renewal or egg dealer branch license must be made through the ((master license)) business licensing system as provided under chapter 19.02 RCW and expires on the ((master)) business license expiration date. The annual egg dealer license fee is thirty dollars and the annual egg dealer branch license fee is fifteen dollars. A copy of the ((master)) business license issued under chapter 19.02 RCW must be posted at each location where the licensee operates. The application must include the full name of the applicant for the license, the location of each facility the applicant intends to operate, and, if applicable, documentation of compliance with RCW 69.25.065 or 69.25.103.
     (2) If an applicant is an individual, receiver, trustee, firm, partnership, association or corporation, the full name of each member of the firm or partnership or the names of the officers of the association or corporation ((shall)) must be given on the application. The application must further state the principal business address of the applicant in the state and elsewhere and the name of a person domiciled in this state authorized to receive and accept service of summons of legal notices of all kinds for the applicant and any other necessary information prescribed by the director.
     (3) The applicant must be issued a license or renewal under this section upon the approval of the application and compliance with the provisions of this chapter, including the applicable rules adopted by the department.
     (4) The license and permanent egg handler or dealer's number is nontransferable.

Sec. 347   RCW 69.25.060 and 1982 c 182 s 44 are each amended to read as follows:
     If the application for the renewal of an egg handler's or dealer's license is not filed before the ((master)) business license expiration date, the ((master)) business license delinquency fee ((shall be)) is assessed under chapter 19.02 RCW and ((shall)) must be paid by the applicant before the renewal license ((shall be)) is issued.

NEW SECTION.  Sec. 348   A new section is added to chapter 70.290 RCW to read as follows:
     (1)(a) A third-party administrator must register with the Washington vaccine association and renew its registration annually. Registrants must report a change of legal name, business name, business address, or business telephone number to the association within ten days after the change.
     (b) Any person or entity acting as or holding itself out as a third-party administrator without being registered under this section is subject to a civil penalty of not less than one thousand dollars nor more than ten thousand dollars for each violation. The civil penalty is in addition to any other penalties that may be imposed for violations of other laws of this state. Penalties imposed under this section must be deposited in the universal vaccine purchase account created under RCW 43.70.720.
     (2) The secretary may adopt rules under chapter 34.05 RCW as necessary to implement this section. Any rules must be developed in consultation with the association.

Sec. 349   RCW 70.290.030 and 2010 c 174 s 3 are each amended to read as follows:
     (1) The association is comprised of all health carriers issuing or renewing health benefit plans in Washington state and all third-party administrators conducting business on behalf of residents of Washington state or Washington health care providers and facilities. Third-party administrators are subject to registration under ((RCW 43.24.160)) section 348 of this act.
     (2) The association is a nonprofit corporation under chapter 24.03 RCW and has the powers granted under that chapter.
     (3) The board of directors includes the following voting members:
     (a) Four members, selected from health carriers or third-party administrators, excluding health maintenance organizations, that have the most fully insured and self-funded covered lives in Washington state. The count of total covered lives includes enrollment in all companies included in their holding company system. Each health carrier or third-party administrator is entitled to no more than a single position on the board to represent all entities under common ownership or control.
     (b) One member selected from the health maintenance organization having the most fully insured and self-insured covered lives in Washington state. The count of total lives includes enrollment in all companies included in its holding company system. Each health maintenance organization is entitled to no more than a single position on the board to represent all entities under common ownership or control.
     (c) One member, representing health carriers not otherwise represented on the board under (a) or (b) of this subsection, who is elected from among the health carrier members not designated under (a) or (b) of this subsection.
     (d) One member, representing Taft Hartley plans, appointed by the secretary from a list of nominees submitted by the Northwest administrators association.
     (e) One member representing Washington state employers offering self-funded health coverage, appointed by the secretary from a list of nominees submitted by the Puget Sound health alliance.
     (f) Two physician members appointed by the secretary, including at least one board certified pediatrician.
     (g) The secretary, or a designee of the secretary with expertise in childhood immunization purchasing and distribution.
     (4) The directors' terms and appointments must be specified in the plan of operation adopted by the association.
     (5) The board of directors of the association ((shall)) must:
     (a) Prepare and adopt articles of association and bylaws;
     (b) Prepare and adopt a plan of operation. The plan of operation ((shall)) must include a dispute mechanism through which a carrier or third-party administrator can challenge an assessment determination by the board under RCW 70.290.040. The board ((shall)) must include a means to bring unresolved disputes to an impartial decision maker as a component of the dispute mechanism;
     (c) Submit the plan of operation to the secretary for approval;
     (d) Conduct all activities in accordance with the approved plan of operation;
     (e) Enter into contracts as necessary or proper to collect and disburse the assessment;
     (f) Enter into contracts as necessary or proper to administer the plan of operation;
     (g) Sue or be sued, including taking any legal action necessary or proper for the recovery of any assessment for, on behalf of, or against members of the association or other participating person;
     (h) Appoint, from among its directors, committees as necessary to provide technical assistance in the operation of the association, including the hiring of independent consultants as necessary;
     (i) Obtain such liability and other insurance coverage for the benefit of the association, its directors, officers, employees, and agents as may in the judgment of the board of directors be helpful or necessary for the operation of the association;
     (j) ((By May 1, 2010, establish the estimated amount of the assessment needed for the period of May 1, 2010, through December 31, 2010, based upon the estimate provided to the association under RCW 70.290.040(1); and notify, in writing, each health carrier and third-party administrator of the health carrier's or third-party administrator's total assessment for this period by May 15, 2010;
     (k) On an annual basis, beginning no later than November 1, 2010, and)) Annually, by November 1st of each year thereafter, establish the estimated amount of the assessment;
     (((l))) (k) Notify, in writing, each health carrier and third-party administrator of the health carrier's or third-party administrator's estimated total assessment by November 15th of each year;
     (((m))) (l) Submit a periodic report to the secretary listing those health carriers or third-party administrators that failed to remit their assessments and audit health carrier and third-party administrator books and records for accuracy of assessment payment submission;
     (((n))) (m) Allow each health carrier or third-party administrator no more than ninety days after the notification required by (((l))) (k) of this subsection to remit any amounts in arrears or submit a payment plan, subject to approval by the association and initial payment under an approved payment plan;
     (((o))) (n) Deposit annual assessments collected by the association, less the association's administrative costs, with the state treasurer to the credit of the universal vaccine purchase account established in RCW 43.70.720;
     (((p))) (o) Borrow and repay such working capital, reserve, or other funds as, in the judgment of the board of directors, may be helpful or necessary for the operation of the association; and
     (((q))) (p) Perform any other functions as may be necessary or proper to carry out the plan of operation and to affect any or all of the purposes for which the association is organized.
     (6) The secretary ((shall)) must convene the initial meeting of the association board of directors.

Sec. 350   RCW 76.48.121 and 2011 c 298 s 34 are each amended to read as follows:
     Every first or secondary specialized forest products buyer purchasing specialty wood and every specialty wood processor must prominently display the ((master)) business license issued under RCW 19.02.070 and endorsed with the respective licenses or registrations or a copy of the ((master)) business license at each location where the buyer or processor receives specialty wood if the first or secondary specialized forest products buyer or specialty wood processor is required to possess a license incorporated into the ((master license)) business licensing system created in chapter 19.02 RCW.

Sec. 351   RCW 82.24.510 and 2009 c 154 s 1 are each amended to read as follows:
     (1) The licenses issuable under this chapter are as follows:
     (a) A wholesaler's license.
     (b) A retailer's license.
     (2) Application for the licenses ((shall)) must be made through the ((master license)) business licensing system under chapter 19.02 RCW. The board ((shall)) must adopt rules regarding the regulation of the licenses. The board may refrain from the issuance of any license under this chapter if the board has reasonable cause to believe that the applicant has ((wilfully)) willfully withheld information requested for the purpose of determining the eligibility of the applicant to receive a license, or if the board has reasonable cause to believe that information submitted in the application is false or misleading or is not made in good faith. In addition, for the purpose of reviewing an application for a wholesaler's license or retailer's license and for considering the denial, suspension, or revocation of any such license, the board may consider any prior criminal conduct of the applicant, including an administrative violation history record with the board and a criminal history record information check within the previous five years, in any state, tribal, or federal jurisdiction in the United States, its territories, or possessions, and the provisions of RCW 9.95.240 and chapter 9.96A RCW ((shall)) do not apply to such cases. The board may, in its discretion, grant or refuse the wholesaler's license or retailer's license, subject to the provisions of RCW 82.24.550.
     (3) No person may qualify for a wholesaler's license or a retailer's license under this section without first undergoing a criminal background check. The background check ((shall)) must be performed by the board and must disclose any criminal conduct within the previous five years in any state, tribal, or federal jurisdiction in the United States, its territories, or possessions. A person who possesses a valid license on July 22, 2001, is subject to this subsection and subsection (2) of this section beginning on the date of the person's ((master)) business license expiration under chapter 19.02 RCW, and thereafter. If the applicant or licensee also has a license issued under chapter 66.24 or 82.26 RCW, the background check done under the authority of chapter 66.24 or 82.26 RCW satisfies the requirements of this section.
     (4) Each such license ((shall)) expires on the ((master)) business license expiration date, and each such license ((shall)) must be continued annually if the licensee has paid the required fee and complied with all the provisions of this chapter and the rules of the board made pursuant thereto.
     (5) Each license and any other evidence of the license that the board requires must be exhibited in each place of business for which it is issued and in the manner required for the display of a ((master)) business license.

Sec. 352   RCW 82.24.520 and 1986 c 321 s 6 are each amended to read as follows:
     A fee of six hundred fifty dollars ((shall)) must accompany each wholesaler's license application or license renewal application. If a wholesaler sells or intends to sell cigarettes at two or more places of business, whether established or temporary, a separate license with a license fee of one hundred fifteen dollars ((shall be)) is required for each additional place of business. Each license, or certificate thereof, and such other evidence of license as the department of revenue requires, ((shall)) must be exhibited in the place of business for which it is issued and in such manner as is prescribed for the display of a ((master)) business license issued under chapter 19.02 RCW. The ((department of revenue shall)) board must require each licensed wholesaler to file with the department of revenue a bond in an amount not less than one thousand dollars to guarantee the proper performance of the duties and the discharge of the liabilities under this chapter. The bond ((shall)) must be executed by such licensed wholesaler as principal, and by a corporation approved by the department of revenue and authorized to engage in business as a surety company in this state, as surety. The bond ((shall)) must run concurrently with the wholesaler's license.

Sec. 353   RCW 82.26.150 and 2009 c 154 s 4 are each amended to read as follows:
     (1) The licenses issuable by the board under this chapter are as follows:
     (a) A distributor's license; and
     (b) A retailer's license.
     (2) Application for the licenses ((shall)) must be made through the ((master license)) business licensing system under chapter 19.02 RCW. The board may adopt rules regarding the regulation of the licenses. The board may refuse to issue any license under this chapter if the board has reasonable cause to believe that the applicant has willfully withheld information requested for the purpose of determining the eligibility of the applicant to receive a license, or if the board has reasonable cause to believe that information submitted in the application is false or misleading or is not made in good faith. In addition, for the purpose of reviewing an application for a distributor's license or retailer's license and for considering the denial, suspension, or revocation of any such license, the board may consider criminal conduct of the applicant, including an administrative violation history record with the board and a criminal history record information check within the previous five years, in any state, tribal, or federal jurisdiction in the United States, its territories, or possessions, and the provisions of RCW 9.95.240 and chapter 9.96A RCW ((shall)) do not apply to such cases. The board may, in its discretion, issue or refuse to issue the distributor's license or retailer's license, subject to the provisions of RCW 82.26.220.
     (3) No person may qualify for a distributor's license or a retailer's license under this section without first undergoing a criminal background check. The background check ((shall)) must be performed by the board and must disclose any criminal conduct within the previous five years in any state, tribal, or federal jurisdiction in the United States, its territories, or possessions. If the applicant or licensee also has a license issued under chapter 66.24 or 82.24 RCW, the background check done under the authority of chapter 66.24 or 82.24 RCW satisfies the requirements of this section.
     (4) Each license issued under this chapter ((shall)) expires on the ((master)) business license expiration date. The license ((shall)) must be continued annually if the licensee has paid the required fee and complied with all the provisions of this chapter and the rules of the board adopted pursuant to this chapter.
     (5) Each license and any other evidence of the license required under this chapter must be exhibited in each place of business for which it is issued and in the manner required for the display of a ((master)) business license.

Sec. 354   RCW 90.76.010 and 2011 c 298 s 39 are each amended to read as follows:
     (1) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (a) "Department" means the department of ecology.
     (b) "Director" means the director of the department.
     (c) "Facility compliance tag" means a marker, constructed of metal, plastic, or other durable material, that clearly identifies all qualifying underground storage tanks on the particular site for which it is issued.
     (d) "Federal act" means the federal resource conservation and recovery act, as amended (42 U.S.C. Sec. 6901, et seq.).
     (e) "Federal regulations" means the underground storage tanks regulations (40 C.F.R. Secs. 280 and 281) adopted by the United States environmental protection agency under the federal act.
     (f) "License" means the ((master)) business license underground storage tank endorsement issued by the department of revenue.
     (g) "Underground storage tank compliance act of 2005" means Title XV and subtitle B of P.L. 109-58 (42 U.S.C. Sec. 15801 et seq.) which have amended the federal resource conservation and recovery act's subtitle I.
     (h) "Underground storage tank system" means an underground storage tank, connected underground piping, underground ancillary equipment, and containment system, if any.
     (2) Except as provided in this section and any rules adopted by the department under this chapter, the definitions contained in the federal regulations apply to the terms in this chapter.

Sec. 355   RCW 90.76.020 and 2011 c 298 s 40 are each amended to read as follows:
     (1) The department must adopt rules establishing requirements for all underground storage tanks that are regulated under the federal act, taking into account the various classes or categories of tanks to be regulated. The rules must be consistent with and no less stringent than the federal regulations and the underground storage tank compliance act of 2005 and consist of requirements for the following:
     (a) New underground storage tank system design, construction, installation, and notification;
     (b) Upgrading existing underground storage tank systems;
     (c) General operating requirements;
     (d) Release detection;
     (e) Release reporting;
     (f) Out-of-service underground storage tank systems and closure;
     (g) Financial responsibility for underground storage tanks containing regulated substances; and
     (h) Groundwater protection measures, including secondary containment and monitoring for installation or replacement of all underground storage tank systems or components, such as tanks and piping, installed after July 1, 2007, and under dispenser spill containment for installation or replacement of all dispenser systems installed after July 1, 2007.
     (2) The department must adopt rules:
     (a) Establishing physical site criteria to be used in designating local environmentally sensitive areas;
     (b) Establishing procedures for local government application for this designation; and
     (c) Establishing procedures for local government adoption and department approval of rules more stringent than the statewide standards in these designated areas.
     (3) The department must establish by rule an administrative and enforcement program that is consistent with and no less stringent than the program required under the federal regulations in the areas of:
     (a) Compliance monitoring, including procedures for recordkeeping and a program for systematic inspections;
     (b) Enforcement;
     (c) Public participation;
     (d) Information sharing;
     (e) Owner and operator training; and
     (f) Delivery prohibition for underground storage tank systems or facilities that are determined by the department to be ineligible to receive regulated substances.
     (4) The department must establish a program that provides for the annual licensing of underground storage tanks. The license must take the form of a tank endorsement on the facility's annual ((master)) business license issued by the department of revenue under chapter 19.02 RCW. A tank is not eligible for a license unless the owner or operator can demonstrate compliance with the requirements of this chapter and the annual tank fees have been remitted. The department may revoke a tank license if a facility is not in compliance with this chapter, or any rules adopted under this chapter. The ((master)) business license must be displayed by the tank owner or operator in a location clearly identifiable.
     (5)(a) The department must issue a one-time "facility compliance tag" to underground storage tank facilities that have installed the equipment required to meet corrosion protection, spill prevention, overfill prevention, leak detection standards, have demonstrated financial responsibility, and have paid annual tank fees. The facility must continue to maintain compliance with corrosion protection, spill prevention, overfill prevention, and leak detection standards, financial responsibility, and have remitted annual tank fees to display a facility compliance tag. The facility compliance tag must be displayed on or near the fire emergency shutoff device, or in the absence of such a device in close proximity to the fill pipes and clearly identifiable to persons delivering regulated substance to underground storage tanks.
     (b) The department may revoke a facility compliance tag if a facility is not in compliance with the requirements of this chapter, or any rules adopted under this chapter.
     (6) The department may place a red tag on a tank at a facility if the department determines that the owner or operator is not in compliance with this chapter or the rules adopted under this chapter regarding the compliance requirements related to that tank. Removal of a red tag without authorization from the department is a violation of this chapter.
     (7) The department may establish programs to certify persons who install or decommission underground storage tank systems or conduct inspections, testing, closure, cathodic protection, interior tank lining, corrective action, site assessments, or other activities required under this chapter. Certification programs must be designed to ensure that each certification will be effective in all jurisdictions of the state.
     (8) When adopting rules under this chapter, the department must consult with the state building code council to ensure coordination with the building and fire codes adopted under chapter 19.27 RCW.

NEW SECTION.  Sec. 356   The following acts or parts of acts are each repealed:
     (1) RCW 19.02.220 (Combined licensing project -- Report -- Evaluation) and 1995 c 403 s 1006;
     (2) RCW 19.02.810 (Master license system -- Existing licenses or permits registered under, when) and 1982 c 182 s 46;
     (3) RCW 19.80.065 (RCW 42.56.070(9) inapplicable) and 2005 c 274 s 236, 2000 c 171 s 59, & 1984 c 130 s 8; and
     (4) RCW 43.24.160 (Registration of third-party administrators--Fee -- Penalty -- Rules) and 2010 c 174 s 9.

NEW SECTION.  Sec. 357   The repeals in section 356 of this act do not affect any existing right acquired or liability or obligation incurred under the statutes repealed or under any rule or order adopted under them nor does it affect any proceedings instituted under them.

NEW SECTION.  Sec. 401   (1) The legislature finds that there are currently over fifty tax classifications for purposes of the state business and occupation tax. Most of these tax classifications were created to provide a reduced tax rate to certain business activities.
     (2) The legislature further finds that the considerable number of state business and occupation tax classifications creates complexity for taxpayers, increases opportunities for disputes between taxpayers and the department of revenue, and is a major barrier to achieving significant uniformity between state and local business and occupation tax systems.
     (3) Therefore, the legislature intends Part IV of this act to significantly reduce state business and occupation tax classifications by:
     (a) Eliminating most classifications providing for a reduced tax rate and replacing the reduced tax rate with a deduction to achieve the same tax results for taxpayers;
     (b) Taxing retail sales of interstate transportation equipment and services under the general retailing classification, resulting in a tax rate reduction from 0.484 percent to 0.471 percent;
     (c) Taxing low-level waste disposal under the catch-all service and other business activities classification, resulting in a tax rate reduction from 3.3 percent to 1.8 percent through June 30, 2013, and 1.5 percent beginning July 1, 2013;
     (d) Consolidating the manufacturing and processing for hire classifications;
     (e) Consolidating the extracting and extracting for hire classifications;
     (f) Consolidating the public road construction and government contracting classifications into the wholesaling classification; and
     (g) Consolidating the public and nonprofit hospital and real estate broker classifications into the catch-all service and other business activities classification.
     (4) Except for the tax rate reductions described in subsection (3)(b) and (c) of this section, Part IV of this act is not intended to materially affect the tax burden of any person. If any provision of sections 402 through 462 of this act would, under a plain meaning analysis, materially impact a person's tax liability except as described in subsection (3)(b) or (c) of this section, the legislature expresses its intent that such provision should be deemed a mistake and interpreted to achieve a result that is consistent with the legislature's intent as described in this section.

NEW SECTION.  Sec. 402   A new section is added to chapter 82.04 RCW to read as follows:
     For purposes of reporting the tax due under this chapter in a way that provides taxpayers with more consistency between state and city-imposed business and occupation taxes or for ease of administration for the department or taxpayers, the department may classify business activities other than as provided in RCW 82.04.230 through 82.04.298. However, new classifications created under the authority of this section do not affect the tax rates applicable to the activities that come within the new classifications.

Sec. 403   RCW 82.04.060 and 2010 c 106 s 203 are each amended to read as follows:
     "Sale at wholesale" or "wholesale sale" means:
     (1) Any sale, which is not a sale at retail, of:
     (a) Tangible personal property;
     (b) Services defined as a retail sale in RCW 82.04.050(2) (a) or (g);
     (c) Amusement or recreation services as defined in RCW 82.04.050(3)(a);
     (d) Prewritten computer software;
     (e) Services described in RCW 82.04.050(6)(b);
     (f) Extended warranties as defined in RCW 82.04.050(7);
     (g) Competitive telephone service, ancillary services, or telecommunications service as those terms are defined in RCW 82.04.065; or
     (h) Digital goods, digital codes, or digital automated services;
     (2) Any charge made for labor and services rendered for persons who are not consumers, in respect to real or personal property, if such charge is expressly defined as a retail sale by RCW 82.04.050 when rendered to or for consumers. For the purposes of this subsection (2), "real or personal property" does not include any natural products named in RCW 82.04.100; ((and))
     (3) The sale of any service for resale, if the sale is excluded from the definition of "sale at retail" and "retail sale" in RCW 82.04.050(14); and
     (4) Any sale of or charge made for labor and services if the sale or charge is excluded from the definition of retail sale in RCW 82.04.050 (10) or (12). Nothing in this subsection may be construed as affecting the status of persons providing such services as consumers as provided in RCW 82.04.190.

Sec. 404   RCW 82.04.230 and 2006 c 300 s 5 are each amended to read as follows:
     (1) Upon every person engaging within this state in business as an extractor or extractor for hire, except persons taxable as an extractor or extractor for hire under any other provision in this chapter; as to such persons the amount of the tax with respect to such business ((shall be)) is, in the case of extractors, equal to the value of the products, including by-products, extracted for sale or for commercial or industrial use, and, in the case of extractors for hire, the gross income of the business of extracting for hire, multiplied by the rate of 0.484 percent.
     (2) The measure of the tax on extractors is the value of the products, including by-products, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 405   RCW 82.04.240 and 2004 c 24 s 4 are each amended to read as follows:
     (1) Upon every person engaging within this state in business as a manufacturer or processor for hire, except persons taxable as manufacturers or processors for hire under other provisions of this chapter; as to such persons the amount of the tax with respect to such business ((shall be)) is, in the case of manufacturers, equal to the value of the products, including by-products, manufactured, and, in the case of processors for hire, the gross income of the business of processing for hire, multiplied by the rate of 0.484 percent.
     (2) The measure of the tax on manufacturers is the value of the products, including by-products, so manufactured regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 406   RCW 82.04.250 and 2010 1st sp.s. c 23 s 509 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 on the business of making sales at retail, 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.
     (((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) 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. 407   RCW 82.04.255 and 2011 c 322 s 2 are each amended to read as follows:
     (1) ((Upon every person engaging within the state in)) The business of providing real estate brokerage services((; as to such persons, the amount of the tax with respect to such business is equal to the gross income of the business, multiplied by the rate of 1.5 percent)) is subject to tax under RCW 82.04.290.
     (2) The measure of the tax on real estate commissions earned by the real estate firm is the gross commission earned by the particular real estate firm including that portion of the commission paid to brokers, including designated and managing brokers, in the same firm on a particular transaction. However, when a real estate commission on a particular transaction is divided among real estate firms at the closing of the transaction, including a firm located out of state, each firm must pay the tax only upon its respective shares of said commission. Moreover, when the real estate firm has paid the tax as provided herein, brokers, including designated and managing brokers, within the same real estate firm may not be required to pay a similar tax upon the same transaction. If any firm located out of state receives a share of commission on a particular transaction, that company or broker must pay the tax based on the requirements of this section and RCW 82.04.067.
     (3) For the purposes of this section, "broker," "designated broker," "managing broker," and "real estate firm" have the same meaning as provided in RCW 18.85.011.

Sec. 408   RCW 82.04.260 and 2011 c 2 s 203 (Initiative Measure No. 1107) are each amended to read as follows:
     (1) ((Upon every person engaging within this state in the business of manufacturing:
     (a) Wheat into flour, barley into pearl barley, soybeans into soybean oil, canola into canola oil, canola meal, or canola by-products, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business is equal to the value of the flour, pearl barley, oil, canola meal, or canola by-product manufactured, multiplied by the rate of 0.138 percent;
     (b) Beginning July 1, 2012, seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; or selling manufactured seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing, to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business is equal to the value of the products manufactured or the gross proceeds derived from such sales, multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (c) Beginning July 1, 2012, dairy products that as of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135, including by-products from the manufacturing of the dairy products such as whey and casein; or selling the same to purchasers who transport in the ordinary course of business the goods out of state; as to such persons the tax imposed is equal to the value of the products manufactured or the gross proceeds derived from such sales multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (d) Beginning July 1, 2012, fruits or vegetables by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables, or selling at wholesale fruits or vegetables manufactured by the seller by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables and sold to purchasers who transport in the ordinary course of business the goods out of this state; as to such persons the amount of tax with respect to such business is equal to the value of the products manufactured or the gross proceeds derived from such sales multiplied by the rate of 0.138 percent. Sellers must keep and preserve records for the period required by RCW 82.32.070 establishing that the goods were transported by the purchaser in the ordinary course of business out of this state;
     (e) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel feedstock, as those terms are defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business is equal to the value of alcohol fuel, biodiesel fuel, or biodiesel feedstock manufactured, multiplied by the rate of 0.138 percent; and
     (f) Wood biomass fuel as defined in RCW 82.29A.135; as to such persons the amount of tax with respect to the business is equal to the value of wood biomass fuel manufactured, multiplied by the rate of 0.138 percent.
     (2) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business is equal to the value of the peas split or processed, multiplied by the rate of 0.138 percent.
     (3) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities is equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.
     (4) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed is equal to the gross proceeds derived from such sales multiplied by the rate of 0.138 percent.
     (5) Upon every person engaging within this state in the business of acting as a travel agent or tour operator; as to such persons the amount of the tax with respect to such activities is equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (6) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities is equal to the gross income derived from such activities multiplied by the rate of 0.275 percent.
     (7) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business is equal to the gross proceeds derived from such activities multiplied by the rate of 0.275 percent. Persons subject to taxation under this subsection are exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.
     (8) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business is equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
     If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state must be determined in accordance with the methods of apportionment required under RCW 82.04.460.
     (9) Upon every person engaging within this state as an insurance producer or title insurance agent licensed under chapter 48.17 RCW or a surplus line broker licensed under chapter 48.15 RCW; as to such persons, the amount of the tax with respect to such licensed activities is equal to the gross income of such business multiplied by the rate of 0.484 percent.
     (10) Upon every person engaging within this state in business as a hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit corporation or by the state or any of its political subdivisions, as to such persons, the amount of tax with respect to such activities is equal to the gross income of the business multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5 percent thereafter.
     (11)))(a) Beginning October 1, 2005, upon every person engaging within this state in the business of manufacturing commercial airplanes, or components of such airplanes, or making sales, at retail or wholesale, of commercial airplanes or components of such airplanes, manufactured by the seller, as to such persons the amount of tax with respect to such business is, in the case of manufacturers, equal to the value of the product manufactured and the gross proceeds of sales of the product manufactured, or in the case of processors for hire, equal to the gross income of the business, multiplied by the rate of:
     (i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
     (ii) 0.2904 percent beginning July 1, 2007.
     (b) Beginning July 1, 2008, upon every person who is not eligible to report under the provisions of (a) of this subsection (((11))) (1) 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))) (1), "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))) (1) must file a complete annual report with the department under RCW 82.32.534.
     (e) This subsection (((11))) (1) does not apply on and after July 1, 2024.
     (((12))) (2)(a) Until July 1, 2024, upon every person engaging within this state in the business of extracting timber or extracting timber 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))) (2)(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))) (2)(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))) (2) must file a complete annual survey with the department under RCW 82.32.585.
     (((13) Upon every person engaging within this state in inspecting, testing, labeling, and storing canned salmon owned by another person, as to such persons, the amount of tax with respect to such activities is equal to the gross income derived from such activities multiplied by the rate of 0.484 percent.
     (14))) (3)(a) Upon every person engaging within this state in the business of printing a newspaper, publishing a newspaper, or both, the amount of tax on such business is equal to the gross income of the business multiplied by the rate of 0.2904 percent.
     (b) A person reporting under the tax rate provided in this subsection (((14))) (3) must file a complete annual report with the department under RCW 82.32.534.

Sec. 409   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; or (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.

Sec. 410   RCW 82.04.285 and 2005 c 369 s 5 are each amended to read as follows:
     (1) Upon every person engaging within this state in the business of operating contests of chance; as to such persons, the amount of tax with respect to the business of operating contests of chance is equal to the gross income of the business derived from contests of chance multiplied by the rate of 1.5 percent.
     (2) An additional tax is imposed on those persons subject to tax in subsection (1) of this section. The amount of the additional tax with respect to the business of operating contests of chance is equal to the gross income of the business derived from contests of chance multiplied by the rate of 0.1 percent through June 30, 2006, and 0.13 percent thereafter. The money collected under this subsection (2) ((shall)) must be deposited in the problem gambling account created in RCW 43.20A.892. ((This subsection does not apply to businesses operating contests of chance when the gross income from the operation of contests of chance is less than fifty thousand dollars per year.))
     (3) For the purpose of this section, "contests of chance" means any contests, games, gaming schemes, or gaming devices, other than the state lottery as defined in RCW 67.70.010, in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor in the outcome. The term includes social card games, bingo, raffle, and punchboard games, and pull-tabs as defined in chapter 9.46 RCW. The term does not include race meets for the conduct of which a license must be secured from the Washington horse racing commission, or "amusement game" as defined in RCW 9.46.0201.
     (4) "Gross income of the business" does not include the monetary value or actual cost of any prizes that are awarded, amounts paid to players for winning wagers, accrual of prizes for progressive jackpot contests, or repayment of amounts used to seed guaranteed progressive jackpot prizes.

Sec. 411   RCW 82.04.290 and 2011 c 174 s 101 are each amended to read as follows:
     (1) ((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 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))) (2) This ((subsection (2) includes)) section applies to, 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." This includes, but is not limited to, the business of inspecting, testing, labeling, and storing canned salmon owned by another person; conducting research and development for compensation; providing chemical dependency treatment services; providing travel agent or tour operator services; acting as an international steamship agent, international customs house broker, international freight forwarder, vessel or cargo charter broker in foreign commerce, or international air cargo agent; the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce as defined in section 422 of this act; performing aerospace product development for others; operating a warehouse; providing international investment management services; providing boarding home services as defined in section 429 of this act; receiving income from royalties; providing day care services; and performing insurance services as defined in section 432 of this act.
     (3) 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 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.))

NEW SECTION.  Sec. 412   The following acts or parts of acts are each repealed:
     (1) RCW 82.04.2404 (Manufacturers -- Processors for hire--Semiconductor materials) and 2010 c 114 s 105 & 2006 c 84 s 2;
     (2) RCW 82.04.272 (Tax on warehousing and reselling prescription drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
     (3) RCW 82.04.2905 (Tax on providing day care) and 1998 c 312 s 7;
     (4) RCW 82.04.2906 (Tax on certain chemical dependency services) and 2003 c 343 s 1;
     (5) 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;
     (6) 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;
     (7) RCW 82.04.2909 (Tax on aluminum smelters) and 2011 c 174 s 301;
     (8) RCW 82.04.294 (Tax on manufacturers or wholesalers of solar energy systems) and 2011 c 179 s 1, 2010 c 114 s 109, 2009 c 469 s 501, 2007 c 54 s 8, & 2005 c 301 s 2;
     (9) 2010 c 114 s 104;
     (10) 2003 c 149 s 3;
     (11) 2010 c 106 s 206;
     (12) 2009 c 461 s 3;
     (13) 2006 c 300 s 7; and
     (14) 2003 c 149 s 4.

NEW SECTION.  Sec. 413   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on engaging in the business of conducting research and development for compensation, a nonprofit corporation or nonprofit association is entitled to a deduction as provided in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The gross income of the business during the reporting period from conducting research and development for compensation; or
     (b) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of conducting research and development for compensation, the difference resulting from subtracting all other deductible amounts from the gross income of the business during the reporting period from conducting research and development for compensation.
     (3) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 414   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.240 on the business of manufacturing wood biomass fuel, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.71488 by:
     (a) The value of the wood biomass fuel manufactured by the person during the reporting period; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing wood biomass fuel, the difference resulting from subtracting all other deductible amounts from the value of the wood biomass fuel manufactured by the person during the reporting period.
     (3) "Wood biomass fuel" has the same meaning as in RCW 82.29A.135.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 415   A new section is added to chapter 82.04 RCW to read as follows:
     (1)(a) In computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of aluminum manufactured by the seller, an aluminum smelter is entitled to a deduction as determined in (b) of this subsection (1).
     (b) The amount of the deduction under this subsection (1) is determined by multiplying 0.4 by:
     (i) The gross proceeds of wholesale sales by the taxpayer, during the reporting period, of aluminum manufactured by the taxpayer; or
     (ii) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of aluminum manufactured by the taxpayer, the difference resulting from subtracting all other deductible amounts from the gross proceeds of wholesale sales by the taxpayer, during the reporting period, of aluminum manufactured by the taxpayer.
     (2)(a) In computing the tax imposed under RCW 82.04.240 on the business of manufacturing aluminum, an aluminum smelter is entitled to a deduction as determined in (b) of this subsection (2).
     (b) The amount of the deduction under this subsection (2) is determined by multiplying 0.4 by:
     (i) The value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing aluminum for hire during the reporting period; or
     (ii) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing aluminum, the difference resulting from subtracting all other deductible amounts from the value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing aluminum for hire during the reporting period.
     (3) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (4) The deductions in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (5) No deduction may be claimed under this section for reporting periods beginning January 1, 2017.

NEW SECTION.  Sec. 416   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.240 on the business of manufacturing semiconductor materials, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.43183 by:
     (a) The value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing semiconductor materials for hire during the reporting period; or
     (b) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing semiconductor materials, the difference resulting from subtracting all other deductible amounts from the value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing semiconductor materials for hire during the reporting period.
     (3) For the purposes of this section "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.
     (4) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (6) No deduction may be claimed under this section for reporting periods beginning December 1, 2018.

NEW SECTION.  Sec. 417   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.240 on the business of manufacturing semiconductor materials, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.43183 by:
     (a) The value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing semiconductor materials for hire during the reporting period; or
     (b) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing semiconductor materials, the difference resulting from subtracting all other deductible amounts from the value of the product manufactured by the taxpayer during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing semiconductor materials for hire during the reporting period.
     (3) For the purposes of this section "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips.
     (4) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (6) No deduction may be claimed under this section for reporting periods beginning the date that is twelve years after the effective date of this section.

NEW SECTION.  Sec. 418   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on the business of inspecting, testing, labeling, and storing canned salmon owned by another person, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The person's gross income of the business during the reporting period from inspecting, testing, labeling, and storing canned salmon owned by another person; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the person's business of inspecting, testing, labeling, and storing canned salmon owned by another person, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from inspecting, testing, labeling, and storing canned salmon owned by another person.
     (3) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 419   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on the business of providing eligible chemical dependency treatment services, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The person's gross income of the business during the reporting period from providing eligible chemical dependency treatment services; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of providing eligible chemical dependency treatment services, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from providing eligible chemical dependency treatment services.
     (3) For purposes of this section, "eligible chemical dependency treatment services" means intensive inpatient or recovery house residential treatment services for chemical dependency, certified by the department of social and health services, for which payment from the United States or any of its instrumentalities or from the state of Washington or any of its municipal corporations or political subdivisions is received as compensation for or to support those services.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 420   A new section is added to chapter 82.04 RCW to read as follows:
     (1)(a) In computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of qualifying solar energy systems or qualifying components by the manufacturer of the system or component, a person is entitled to a deduction as determined in (b) of this subsection (1).
     (b) The amount of the deduction under this subsection (1) is determined by multiplying 0.43183 by:
     (i) The gross proceeds of wholesale sales by the person, during the reporting period, of qualifying solar energy products or qualifying components, manufactured by the person; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of qualifying solar energy systems or qualifying components manufactured by the person, the difference resulting from subtracting all other deductible amounts from the gross proceeds of wholesale sales by the person, during the reporting period, of qualifying solar energy systems or qualifying components manufactured by the person.
     (2)(a) In computing the tax imposed under RCW 82.04.240 on the business of manufacturing qualifying solar energy systems or qualifying components, a person is entitled to a deduction as determined in (b) of this subsection (2).
     (b) The amount of the deduction under this subsection (2) is determined by multiplying 0.43183 by:
     (i) The value of the qualifying solar energy systems or qualifying components manufactured by the person during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing qualifying solar energy systems or qualifying components for hire during the reporting period; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing qualifying solar energy systems or qualifying components, the difference resulting from subtracting all other deductible amounts from the value of the qualifying solar energy systems or qualifying components manufactured by the person during the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business from processing solar energy systems or qualifying components for hire during the reporting period.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Compound semiconductor solar wafers" means a semiconductor solar wafer composed of elements from two or more different groups of the periodic table.
     (b) "Module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells and providing a single direct current electrical output.
     (c) "Photovoltaic cell" means a device that converts light directly into electricity without moving parts.
     (d) "Qualifying component" means the following products to be used exclusively in components of qualifying solar energy systems: Solar grade silicon, silicon solar wafers, silicon solar cells, thin film solar devices, or compound semiconductor solar wafers.
     (e) "Qualifying solar energy system" means a solar energy system using photovoltaic modules or stirling converters.
     (f) "Silicon solar cells" means a photovoltaic cell manufactured from a silicon solar wafer.
     (g) "Silicon solar wafers" means a silicon wafer manufactured for solar conversion purposes.
     (h) "Solar energy system" means any device or combination of devices or elements that rely upon direct sunlight as an energy source for use in the generation of electricity.
     (i) "Solar grade silicon" means high-purity silicon used exclusively in components of solar energy systems using photovoltaic modules to capture direct sunlight. "Solar grade silicon" does not include silicon used in semiconductors.
     (j) "Stirling converter" means a device that produces electricity by converting heat from a solar source utilizing a stirling engine.
     (k) "Thin film solar devices" means a nonparticipating substrate on which various semiconducting materials are deposited to produce a photovoltaic cell that is used to generate electricity.
     (4) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (5) The deductions in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (6) No deduction may be claimed under this section for reporting periods beginning July 1, 2014.

NEW SECTION.  Sec. 421   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.240 on the business of splitting or processing dried peas or of manufacturing 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; a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.71488 by:
     (a) The value of the product or products described in subsection (1) of this section and manufactured by the person during the reporting period; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of manufacturing one or more of the products described in subsection (1) of this section, the difference resulting from subtracting all other deductible amounts from the value of the product or products described in subsection (1) of this section and manufactured by the person during the reporting period.
     (3) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 422   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on qualifying travel or transportation-related activities, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.81667 by:
     (a) The person's gross income of the business during the reporting period from engaging in qualifying travel or transportation-related activities; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the person's business of engaging in qualifying travel or transportation-related activities, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from engaging in qualifying travel or transportation-related activities.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Qualifying travel or transportation-related activities" means engaging within this state in one or more of the following businesses: Travel agent, tour operator, international steamship agent, international customs house broker, international freight forwarder, vessel or cargo charter broker in foreign commerce, international air cargo agent, or stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce.
     (b) "Stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce" means 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.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 423   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.250 on the business of making qualifying retail sales, an eligible person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.38344 by:
     (a) The eligible person's gross proceeds of qualifying retail sales during the reporting period; or
     (b) If the eligible person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.250 on the business of making qualifying retail sales, the difference resulting from subtracting all other deductible amounts from the eligible person's gross proceeds of qualifying retail sales during the reporting period.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Eligible person" means a person classified by the federal aviation administration as a federal aviation regulation part 145 certificated repair station.
     (b) "Qualifying retail sales" means sales at retail that are exempt from the tax imposed under RCW 82.08.020 by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263.
     (4) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (6) No deduction may be claimed under this section for reporting periods beginning July 1, 2024.

NEW SECTION.  Sec. 424   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.250 or 82.04.270 on the business of making sales at retail or wholesale of prescription drugs, an eligible person is entitled to a deduction as determined in this subsection.
     (a) The deduction under this subsection from the gross proceeds of retail sales of prescription drugs is determined by multiplying 0.70701 by:
     (i) The gross proceeds of retail sales of prescription drugs by the eligible person during the reporting period; or
     (ii) If the eligible person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.250 on the business of making retail sales of prescription drugs, the difference resulting from subtracting all other deductible amounts from the gross proceeds of retail sales of prescription drugs by the eligible person during the reporting period.
     (b) The deduction under this subsection from the gross proceeds of wholesale sales of prescription drugs is determined by multiplying 0.71488 by:
     (i) The gross proceeds of wholesale sales of prescription drugs by the eligible person during the reporting period; or
     (ii) If the eligible person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of prescription drugs, the difference resulting from subtracting all other deductible amounts from the gross proceeds of wholesale sales of prescription drugs by the eligible person during the reporting period.
     (2) The definitions in this subsection apply throughout this section:
     (a) "Eligible person" means a person who:
     (i) Is registered with the federal drug enforcement administration and licensed by the state board of pharmacy;
     (ii) Buys prescription drugs from a manufacturer or another wholesaler and resells the drugs to persons selling at retail or to hospitals, clinics, health care providers, or other providers of health care services; and
     (iii) Owns or operates a warehouse inside or outside of this state where the person's prescription drugs are stored pending delivery to buyers.
     (b) "Prescription drugs" means drugs intended for human use pursuant to a prescription.
     (c) "Prescription" and "drug" have the same meaning as in RCW 82.08.0281.
     (3) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 425   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on the business of performing aerospace product development for others, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.4 by:
     (a) The person's gross income of the business during the reporting period from performing aerospace product development for others; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the person's business of performing aerospace product development for others, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from performing aerospace product development for others.
     (3) For purposes of this section, "aerospace product development" has the same meaning as in RCW 82.04.4461.
     (4) A person claiming a deduction under this section must file a complete annual report with the department under RCW 82.32.534. However, if legislation is enacted after 2011 that replaces the annual report under RCW 82.32.534 with the annual survey under RCW 82.32.585, a person claiming a deduction under this section must file a complete annual survey with the department under RCW 82.32.585.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.
     (6) No deduction may be claimed under this section for reporting periods beginning July 1, 2024.

NEW SECTION.  Sec. 426   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on the business of operating a qualifying warehouse, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The person's gross income of the business during the reporting period from operating a qualifying warehouse; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the person's business of operating a qualifying warehouse, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from operating a qualifying warehouse.
     (3) For purposes of this section, "qualifying warehouse" means a cold storage warehouse or storage warehouse. The term does not include cold storage lockers.
     (a) "Cold storage warehouse" means a storage warehouse used to store any combination of fresh or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, 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 of a building or structure, 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 is conducted that entitles the person conducting the activity to a deduction under section 424 of this act.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 427   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on international investment management services, a person is entitled to a deduction as determined in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.81667 by:
     (a) The person's gross income of the business during the reporting period from providing international investment management services; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the person's business of providing international investment management services, the difference resulting from subtracting all other deductible amounts from the person's gross income of the business during the reporting period from providing international investment management services.
     (3) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 428   A new section is added to chapter 82.04 RCW to read as follows:
     (1)(a) In computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of qualifying meat products, an eligible person is entitled to a deduction as determined in (b) of this subsection (1).
     (b) The amount of the deduction under this subsection (1) is determined by multiplying 0.71488 by:
     (i) The gross proceeds of wholesale sales of qualifying meat products during the reporting period by the eligible person; or
     (ii) If the eligible person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.270 on the business of making wholesale sales of qualifying meat products, the difference resulting from subtracting all other deductible amounts from the gross proceeds of wholesale sales of qualifying meat products during the reporting period by the eligible person.
     (2)(a) In computing the tax imposed under RCW 82.04.240 on the business of processing perishable meat products, a person is entitled to a deduction as determined in (b) of this subsection (2).
     (b) The amount of the deduction under this subsection (2) is determined by multiplying 0.71488 by:
     (i) The value of the meat product processed by the person for the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business for the reporting period from processing meat products for hire; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on the business of processing perishable meat products, the difference resulting from subtracting all other deductible amounts from the value of the meat product processed by the person for the reporting period, in the case of manufacturers, or, in the case of processors for hire, the gross income of the business for the reporting period from processing meat products for hire.
     (3) The definitions in this subsection apply throughout this section.
     (a) "Eligible person" means any person who sells perishable meat products at wholesale or any person who takes an animal or a perishable meat product, processes it, and sells the resulting qualifying meat product at wholesale.
     (b) "Meat product" means a product derived in whole or in part from any part of an animal carcass, except products derived from seafood or insects. The term includes only products that are intended for human consumption as food or animal consumption as feed.
     (c) "Perishable meat product" means a meat product having a high risk of spoilage within a period of thirty days without refrigeration or freezing.
     (d) "Processed," "processes," or "processing" means to engage in one or more of the following activities: Slaughtering an animal, breaking an animal carcass or part of an animal carcass into any type of smaller unit, or engaging in any other manufacturing activity when perishable meat is either the finished product or an ingredient or component of the finished product.
     (e) "Qualifying meat product" means: (i) With respect to any person, a perishable meat product; and (ii) any meat product, perishable or not, that is the result of the seller taking an animal or a perishable meat product, processing it, and selling the resulting meat product at wholesale, even if meat is only a component of the finished product.
     (4) The deductions in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 429   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on boarding home services, a licensed boarding home is entitled to a deduction as provided in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.81667 by:
     (a) The gross income of the business during the reporting period from providing boarding home services; or
     (b) If the taxpayer is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of providing boarding home services, the difference resulting from subtracting all other deductible amounts from the gross income of the business during the reporting period from providing boarding home services.
     (3) For purposes of this section, the following definitions apply:
     (a) "Boarding home services" means any services that a licensed boarding home is authorized to provide to residents of the boarding home, either directly or indirectly, and housing provided to residents of the boarding home.
     (b) "Licensed boarding home" means a boarding home licensed under chapter 18.20 RCW.
     (4) The definitions in RCW 18.20.020 apply to this section.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 430   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on the business of receiving income from royalties, a person is entitled to a deduction as provided in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The gross income from royalties during the reporting period; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of receiving income from royalties, the difference resulting from subtracting all other deductible amounts from the gross income from royalties during the reporting period.
     (3) For purposes of this section, "gross income from royalties" means compensation for the use of intangible property, including charges in the nature of royalties, regardless of where the intangible property will be used. For purposes of this subsection, "intangible property" includes copyrights, patents, licenses, franchises, trademarks, trade names, and similar items. "Gross income from royalties" does not include compensation for any natural resource, the licensing of prewritten computer software to the end user, or the licensing of digital goods, digital codes, or digital automated services to the end user as defined in RCW 82.04.190(11).
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 431   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on providing child day care, a person is entitled to a deduction as provided in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The gross income of the business during the reporting period from providing child day care; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of providing child day care, the difference resulting from subtracting all other deductible amounts from the gross income of the business during the reporting period from providing child day care.
     (3) For purposes of this section, "child day care" means providing child care for continuous periods of less than twenty-four hours.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 432   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.290 on providing insurance services, a person is entitled to a deduction as provided in subsection (2) of this section.
     (2) The amount of the deduction under this section is determined by multiplying 0.67734 by:
     (a) The gross income of the business during the reporting period from providing insurance services; or
     (b) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.290 on the business of providing insurance services, the difference resulting from subtracting all other deductible amounts from the gross income of the business during the reporting period from providing insurance services.
     (3) For purposes of this section, "insurance services" means:
     (a) 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; or
     (b) The licensed activities of insurance producers or title insurance agents licensed under chapter 48.17 RCW or surplus line brokers licensed under chapter 48.15 RCW.
     (4) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 433   A new section is added to chapter 82.04 RCW to read as follows:
     (1)(a) In computing the tax imposed under RCW 82.04.240 on qualifying manufacturing activities, a person is entitled to a deduction as determined in (b) of this subsection (1).
     (b) The amount of the deduction under this subsection is determined by multiplying 0.71488 by:
     (i) The value of the eligible product manufactured by the person during the reporting period; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.240 on qualifying manufacturing, the difference resulting from subtracting all other deductible amounts from the value of the eligible products manufactured by the person during the reporting period.
     (2) In computing the tax imposed under RCW 82.04.250 on the business of making qualifying retail sales, a person is entitled to a deduction as determined in (b) of this subsection (2).
     (a) The amount of the deduction under this subsection (2) is determined by multiplying 0.70701 by:
     (i) The gross proceeds of sales for qualifying retail sales by the person during the reporting period; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.250 on the business of making qualifying retail sales, the difference resulting from subtracting all other deductible amounts from the gross proceeds of sales for qualifying retail sales by the person during the reporting period.
     (b) Persons claiming a deduction under this subsection (2) must keep and preserve records for the period required by RCW 82.32.070 establishing that the qualifying retail sales were for eligible products that were transported by the purchaser in the ordinary course of business out of this state.
     (3) In computing the tax imposed under RCW 82.04.270 on the business of making qualifying wholesale sales, a person is entitled to a deduction as determined in (b) of this subsection (3).
     (a) The amount of the deduction under this subsection (3) is determined by multiplying 0.71488 by:
     (i) The gross proceeds of sales for qualifying wholesale sales by the person during the reporting period; or
     (ii) If the person is entitled to one or more deductions under any other statute in this chapter in computing the tax imposed under RCW 82.04.270 on the business of making qualifying wholesale sales, the difference resulting from subtracting all other deductible amounts from the gross proceeds of sales for qualifying wholesale sales by the person during the reporting period.
     (b) Persons claiming a deduction under this subsection (3) must keep and preserve records for the period required by RCW 82.32.070 establishing that the qualifying wholesale sales were for eligible products transported by the purchaser in the ordinary course of business out of this state.
     (4) The definitions in this subsection apply throughout this section.
     (a) "Eligible product" means:
     (i) Seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing;
     (ii) 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 process, such as whey and casein; and
     (iii) Fruits and vegetables that have been manufactured by canning, preserving, freezing, processing, or dehydrating fresh fruits or vegetables.
     (b) "Qualifying manufacturing" means manufacturing an eligible product.
     (c) "Qualifying retail sales" means retail sales of an eligible product described in (a)(i) or (ii) of this subsection (4) by the manufacturer of the product, but only when the product is delivered to purchasers who transport the product out of this state in the ordinary course of business.
     (d) "Qualifying wholesale sales" means wholesale sales of any eligible product described in (a) of this subsection (4) by the manufacturer of the product, but only when the product is delivered to purchasers who transport the product out of this state in the ordinary course of business.
     (5) The deduction in this section may only be claimed on a return filed electronically using the department's online tax filing service.

NEW SECTION.  Sec. 434   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under RCW 82.04.285(2), a credit is allowed for eligible persons. The credit equals the full amount of tax otherwise due under RCW 82.04.285(2) for the reporting period.
     (2) For purposes of this section, "eligible person" means a person subject to tax under RCW 82.04.285 and whose gross income of the business from the operation of contests of chance is less than fifty thousand dollars in the tax year in which the credit under this section is claimed.

Sec. 435   RCW 35.102.150 and 2011 c 174 s 201 are each amended to read as follows:
     Notwithstanding RCW 35.102.130, a city that imposes a business and occupation tax must allocate a person's gross income from the activities of printing, and of publishing newspapers, periodicals, or magazines, to the principal place in this state from which the taxpayer's business is directed or managed. As used in this section, the activities of printing, and of publishing newspapers, periodicals, or magazines are those activities to which the tax rates in RCW 82.04.260(((13))) (3) and 82.04.280(1)(a) apply.

Sec. 436   RCW 48.14.080 and 2010 1st sp.s. c 23 s 520 are each amended to read as follows:
     (1) As to insurers, other than title insurers and taxpayers under RCW 48.14.0201, the taxes imposed by this title are in lieu of all other taxes, except as otherwise provided in this section.
     (2) Subsection (1) of this section does not apply with respect to:
     (a) Taxes on real and tangible personal property;
     (b) Excise taxes on the sale, purchase, use, or possession of (i) real property; (ii) tangible personal property; (iii) extended warranties; (iv) services, including digital automated services as defined in RCW 82.04.192; and (v) digital goods and digital codes as those terms are defined in RCW 82.04.192; and
     (c) The tax imposed in ((RCW 82.04.260(9), regarding)) chapter 82.04 RCW on public and nonprofit hospitals.
     (3) For the purposes of this section, the term "taxes" includes taxes imposed by the state or any county, city, town, municipal corporation, quasi-municipal corporation, or other political subdivision.

Sec. 437   RCW 82.04.051 and 1999 c 212 s 2 are each amended to read as follows:
     (1) As used in RCW 82.04.050, the term "services rendered in respect to" means those services that are directly related to the constructing, building, repairing, improving, and decorating of buildings or other structures and that are performed by a person who is responsible for the performance of the constructing, building, repairing, improving, or decorating activity. The term does not include services such as engineering, architectural, surveying, flagging, accounting, legal, consulting, or administrative services provided to the consumer of, or person responsible for performing, the constructing, building, repairing, improving, or decorating services.
     (2) A contract or agreement under which a person is responsible for both services that would otherwise be subject to tax as a service under RCW 82.04.290(((2))) and also constructing, building, repairing, improving, or decorating activities that would otherwise be subject to tax under another section of this chapter is subject to the tax that applies to the predominant activity under the contract or agreement.
     (3) Unless otherwise provided by law, a contract or agreement under which a person is responsible for activities that are subject to tax as a service under RCW 82.04.290(((2))), and a subsequent contract or agreement under which the same person is responsible for constructing, building, repairing, improving, or decorating activities subject to tax under another section of this chapter, ((shall)) may not be combined and taxed as a single activity if at the time of the first contract or agreement it was not contemplated by the parties, as evidenced by the facts, that the same person would be awarded both contracts.
     (4) As used in this section "responsible for the performance" means that the person is obligated to perform the activities, either personally or through a third party. A person who reviews work for a consumer, retailer, or wholesaler but does not supervise or direct the work is not responsible for the performance of the work. A person who is financially obligated for the work, such as a bank, but who does not have control over the work itself is not responsible for the performance of the work.

Sec. 438   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.
     (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. 439   RCW 82.04.261 and 2010 1st sp.s. c 23 s 510 are each amended to read as follows:
     (1) In addition to the taxes imposed under RCW 82.04.260(((11))) (2), a surcharge is imposed on those persons who are subject to any of the taxes imposed under RCW 82.04.260(((11))) (2). Except as otherwise provided in this section, the surcharge is equal to 0.052 percent. The surcharge is added to the rates provided in RCW 82.04.260(((11))) (2) (a), (b), (c), and (d). The surcharge and this section expire July 1, 2024.
     (2) All receipts from the surcharge imposed under this section must be deposited into the forest and fish support account created in RCW 76.09.405.
     (3)(a) The surcharge imposed under this section is suspended if:
     (i) Receipts from the surcharge total at least eight million dollars during any fiscal biennium; or
     (ii) The office of financial management certifies to the department that the federal government has appropriated at least two million dollars for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington for any federal fiscal year.
     (b)(i) The suspension of the surcharge under (a)(i) of this subsection (3) takes effect on the first day of the calendar month that is at least thirty days after the end of the month during which the department determines that receipts from the surcharge total at least eight million dollars during the fiscal biennium. The surcharge is imposed again at the beginning of the following fiscal biennium.
     (ii) The suspension of the surcharge under (a)(ii) of this subsection (3) takes effect on the later of the first day of October of any federal fiscal year for which the federal government appropriates at least two million dollars for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington, or the first day of a calendar month that is at least thirty days following the date that the office of financial management makes a certification to the department under subsection (5) of this section. The surcharge is imposed again on the first day of the following July.
     (4)(a) If, by October 1st of any federal fiscal year, the office of financial management certifies to the department that the federal government has appropriated funds for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington but the amount of the appropriation is less than two million dollars, the department must adjust the surcharge in accordance with this subsection.
     (b) The department must adjust the surcharge by an amount that the department estimates will cause the amount of funds deposited into the forest and fish support account for the state fiscal year that begins July 1st and that includes the beginning of the federal fiscal year for which the federal appropriation is made, to be reduced by twice the amount of the federal appropriation for participation in forest and fish report-related activities by federally recognized Indian tribes located within the geographical boundaries of the state of Washington.
     (c) Any adjustment in the surcharge takes effect at the beginning of a calendar month that is at least thirty days after the date that the office of financial management makes the certification under subsection (5) of this section.
     (d) The surcharge is imposed again at the rate provided in subsection (1) of this section on the first day of the following state fiscal year unless the surcharge is suspended under subsection (3) of this section or adjusted for that fiscal year under this subsection.
     (e) Adjustments of the amount of the surcharge by the department are final and may not be used to challenge the validity of the surcharge imposed under this section.
     (f) The department must provide timely notice to affected taxpayers of the suspension of the surcharge or an adjustment of the surcharge.
     (5) The office of financial management must make the certification to the department as to the status of federal appropriations for tribal participation in forest and fish report-related activities.

Sec. 440   RCW 82.04.270 and 2004 c 24 s 5 are each amended to read as follows:
     Upon every person engaging within this state in the business of making sales at wholesale, except persons taxable ((as wholesalers)) under other provisions of this chapter on the business of making sales at wholesale; as to such persons the amount of tax with respect to such business ((shall be)) is equal to the gross proceeds of sales of such business multiplied by the rate of 0.484 percent.

Sec. 441   RCW 82.04.29001 and 2003 c 168 s 602 are each amended to read as follows:
     (1) The creation and distribution of custom software is a service taxable under RCW 82.04.290(((2))). Duplication of the software for the same person, or by the same person for its own use, does not change the character of the software.
     (2) The customization of prewritten computer software is a service taxable under RCW 82.04.290(((2))).

Sec. 442   RCW 82.04.29002 and 2010 1st sp.s. c 23 s 1101 are each amended to read as follows:
     (1) Beginning May 1, 2010, through June 30, 2013, an additional rate of tax of 0.30 percent is added to the rate provided for in RCW ((82.04.255,)) 82.04.285((,)) and 82.04.290(((2)(a))).
     (2)(((a))) The additional rate in subsection (1) of this section does not apply to:
     (a) Persons engaging within this state in business as a hospital. "Hospital" has the meaning provided in chapter 70.41 RCW but also includes any hospital that comes within the scope of chapter 71.12 RCW if the hospital is also licensed under chapter 70.41 RCW((.));
     (b) ((The additional rate in subsection (1) of this section does not apply to)) Amounts received from performing scientific research and development services including but not limited to aerospace product development, as defined in RCW 82.04.4461, performed for others, and research and development in the physical, engineering, and life sciences (such as agriculture, bacteriological, biotechnology, chemical, life sciences, and physical science research and development laboratories or services);
     (c) Amounts received by nonprofit corporations or nonprofit associations engaging in the business of conducting research and development for compensation;
     (d) Amounts received from inspecting, testing, labeling, and storing canned salmon owned by another person;
     (e) Amounts received from providing eligible chemical dependency treatment services as defined in section 419 of this act;
     (f) Amounts received from providing qualifying travel or transportation-related activities as defined in section 422 of this act;
     (g) Amounts received from operating a qualifying warehouse as defined in section 426 of this act;
     (h) Amounts received from providing international investment management services;
     (i) Amounts received by boarding homes licensed under chapter 18.20 RCW for providing boarding home services as defined in section 429 of this act;
     (j) Amounts received from providing child day care as defined in section 431 of this act;
     (k) Amounts received from providing insurance services as defined in section 432 of this act; and
     (l) Gross income from royalties as defined in section 430 of this act.

Sec. 443   RCW 82.04.293 and 1997 c 7 s 3 are each amended to read as follows:
     For purposes of ((RCW 82.04.290)) this chapter:
     (1) A person is engaged in the business of providing international investment management services, if:
     (a) Such person is engaged primarily in the business of providing investment management services; and
     (b) At least ten percent of the gross income of such person is derived from providing investment management services to any of the following: (i) Persons or collective investment funds residing outside the United States; or (ii) persons or collective investment funds with at least ten percent of their investments located outside the United States.
     (2) "Investment management services" means investment research, investment consulting, portfolio management, fund administration, fund distribution, investment transactions, or related investment services.
     (3) "Collective investment fund" includes:
     (a) A mutual fund or other regulated investment company, as defined in section 851(a) of the internal revenue code of 1986, as amended;
     (b) An "investment company," as that term is used in section 3(a) of the investment company act of 1940, as well as any entity that would be an investment company for this purpose but for the exemptions contained in section 3(c)(1) or (11);
     (c) An "employee benefit plan," which includes any plan, trust, commingled employee benefit trust, or custodial arrangement that is subject to the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq., or that is described in sections 125, 401, 403, 408, 457, and 501(c)(9) and (17) through (23) of the internal revenue code of 1986, as amended, or a similar plan maintained by a state or local government, or a plan, trust, or custodial arrangement established to self-insure benefits required by federal, state, or local law;
     (d) A fund maintained by a tax-exempt organization, as defined in section 501(c)(3) of the internal revenue code of 1986, as amended, for operating, quasi-endowment, or endowment purposes;
     (e) Funds that are established for the benefit of such tax-exempt organizations, such as charitable remainder trusts, charitable lead trusts, charitable annuity trusts, or other similar trusts; or
     (f) Collective investment funds similar to those described in (a) through (e) of this subsection created under the laws of a foreign jurisdiction.
     (4) Investments are located outside the United States if the underlying assets in which the investment constitutes a beneficial interest reside or are created, issued or held outside the United States.

Sec. 444   RCW 82.04.297 and 2010 c 111 s 303 are each amended to read as follows:
     (1) The provision of internet access is subject to tax under RCW 82.04.290(((2))).
     (2)(a) Except as provided in (b) of this subsection, "internet" and "internet access" have the same meaning as those terms are defined in the federal internet tax freedom act, Title 47 U.S.C. Sec. 151 note, as existing on July 1, 2009.
     (b) "Internet access" does not include telecommunications service purchased, used, or sold by a person that provides a service that enables users to connect to the internet to access content, information, or other services offered over the internet, to the extent such telecommunications service is purchased, used, or sold: (i) To provide such service; or (ii) to otherwise enable users to access content, information, or other services offered over the internet.
     (3) Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

Sec. 445   RCW 82.04.298 and 2011 c 2 s 204 (Initiative Measure No. 1107) are each amended to read as follows:
     (1) The amount of tax with respect to a qualified grocery distribution cooperative's sales of groceries or related goods for resale, excluding ((items subject to tax under RCW 82.04.260(4))) qualifying meat products, to customer-owners of the grocery distribution cooperative is equal to the gross proceeds of sales of the grocery distribution cooperative multiplied by the rate of one and one-half percent.
     (2) A qualified grocery distribution cooperative is allowed a deduction from the gross proceeds of sales of groceries or related goods for resale, excluding ((items subject to tax under RCW 82.04.260(4))) qualifying meat products, to customer-owners of the grocery distribution cooperative that is equal to the portion of the gross proceeds of sales for resale that represents the actual cost of the merchandise sold by the grocery distribution cooperative to customer-owners.
     (3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Grocery distribution cooperative" means an entity that sells groceries and related items to customer-owners of the grocery distribution cooperative and has customer-owners, in the aggregate, who own a majority of the outstanding ownership interests of the grocery distribution cooperative or of the entity controlling the grocery distribution cooperative. "Grocery distribution cooperative" includes an entity that controls a grocery distribution cooperative.
     (b) "Qualified grocery distribution cooperative" means:
     (i) A grocery distribution cooperative that has been determined by a court of record of the state of Washington to be not engaged in wholesaling or making sales at wholesale, within the meaning of RCW 82.04.270 or any similar provision of a municipal ordinance that imposes a tax on gross receipts, gross proceeds of sales, or gross income, with respect to purchases made by customer-owners, and subsequently changes its form of doing business to make sales at wholesale of groceries or related items to its customer-owners; or
     (ii) A grocery distribution cooperative that has acquired substantially all of the assets of a grocery distribution cooperative described in (b)(i) of this subsection.
     (c) "Customer-owner" means a person who has an ownership interest in a grocery distribution cooperative and purchases groceries and related items at wholesale from that grocery distribution cooperative.
     (d) "Controlling" means holding fifty percent or more of the voting interests of an entity and having at least equal power to direct or cause the direction of the management and policies of the entity, whether through the ownership of voting securities, by contract, or otherwise.
     (e) "Qualifying meat product" has the same meaning as provided in section 428 of this act.

Sec. 446   RCW 82.04.334 and 2010 1st sp.s. c 23 s 512 are each amended to read as follows:
     This chapter does not apply to any sale of standing timber excluded from the definition of "sale" in RCW 82.45.010(3). The definitions in RCW 82.04.260(((11))) (2) apply to this section.

Sec. 447   RCW 82.04.360 and 2010 1st sp.s. c 23 s 702 are each amended to read as follows:
     (1) This chapter does not apply to any person in respect to his or her employment in the capacity of an employee or servant as distinguished from that of an independent contractor. For the purposes of this section, the definition of employee includes those persons that are defined in section 3121(d)(3)(B) of the federal internal revenue code of 1986, as amended through January 1, 1991.
     (2) Until July 1, 2010, this chapter does not apply to amounts received by an individual from a corporation as compensation for serving as a member of that corporation's board of directors. Beginning on July 1, 2010, such amounts are taxable under RCW 82.04.290(((2))).
     (3) A booth renter is an independent contractor for purposes of this chapter. For purposes of this section, "booth renter" means any person who:
     (a) Performs cosmetology, barbering, esthetics, or manicuring services for which a license is required under chapter 18.16 RCW; and
     (b) Pays a fee for the use of salon or shop facilities and receives no compensation or other consideration from the owner of the salon or shop for the services performed.

Sec. 448   RCW 82.04.440 and 2011 c 2 s 205 (Initiative Measure No. 1107) are each amended to read as follows:
     (1) Every person engaged in activities that are subject to tax under two or more provisions of RCW 82.04.230 through 82.04.298, inclusive, is taxable under each provision applicable to those activities.
     (2) Persons taxable under RCW ((82.04.2909(2),)) 82.04.250, 82.04.270, ((82.04.294(2),)) or 82.04.260 (1)(((b), (c), or (d), (4), (11), or (12))) or (2)(c) with respect to selling products in this state, including those persons who are also taxable under RCW 82.04.261, are allowed a credit against those taxes for any (a) manufacturing taxes paid with respect to the manufacturing of products so sold in this state, and/or (b) extracting taxes paid with respect to the extracting of products so sold in this state or ingredients of products so sold in this state. Extracting taxes taken as credit under subsection (3) of this section may also be taken under this subsection, if otherwise allowable under this subsection. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the sale of those products.
     (3) Persons taxable as manufacturers under RCW 82.04.240 or 82.04.260 (((1)(b) or (12))) (2), including those persons who are also taxable under RCW 82.04.261, are allowed a credit against those taxes for any extracting taxes paid with respect to extracting the ingredients of the products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the manufacturing of those products.
     (4) Persons taxable under RCW 82.04.230, 82.04.240, ((82.04.2909(1), 82.04.294(1), 82.04.2404,)) or 82.04.260 (1)((, (2), (4), (11), or (12))) or (2), including those persons who are also taxable under RCW 82.04.261, with respect to extracting or manufacturing products in this state are allowed a credit against those taxes for any (i) gross receipts taxes paid to another state with respect to the sales of the products so extracted or manufactured in this state, (ii) manufacturing taxes paid with respect to the manufacturing of products using ingredients so extracted in this state, or (iii) manufacturing taxes paid with respect to manufacturing activities completed in another state for products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under this chapter with respect to the extraction or manufacturing of those products.
     (5) For the purpose of this section:
     (a) "Gross receipts tax" means a tax:
     (i) Which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which the deductions allowed would not constitute the tax an income tax or value added tax; and
     (ii) Which is also not, pursuant to law or custom, separately stated from the sales price.
     (b) "State" means (i) the state of Washington, (ii) a state of the United States other than Washington, or any political subdivision of such other state, (iii) the District of Columbia, and (iv) any foreign country or political subdivision thereof.
     (c) "Manufacturing tax" means a gross receipts tax imposed on the act or privilege of engaging in business as a manufacturer, and includes (i) the taxes imposed on persons who are engaged in business as a manufacturer in RCW 82.04.240((, 82.04.2404, 82.04.2909(1),)) and 82.04.260 (1)((, (2), (4), (11), and (12), and 82.04.294(1))) or (2); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as a manufacturer; and (iii) similar gross receipts taxes paid to other states.
     (d) "Extracting tax" means a gross receipts tax imposed on the act or privilege of engaging in business as an extractor, and includes (i) the tax imposed on extractors in RCW 82.04.230 and 82.04.260(((12))) (2); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as an extractor; and (iii) similar gross receipts taxes paid to other states.
     (e) "Business", "manufacturer", "extractor", and other terms used in this section have the meanings given in RCW 82.04.020 through ((82.04.212 [82.04.217])) 82.04.217, notwithstanding the use of those terms in the context of describing taxes imposed by other states.

Sec. 449   RCW 82.04.4451 and 2010 1st sp.s. c 23 s 1102 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed against the amount of tax otherwise due under this chapter, as provided in this section. Except for taxpayers that report at least fifty percent of their taxable amount under RCW ((82.04.255,)) 82.04.290(((2)(a),)) and 82.04.285, the maximum credit for a taxpayer for a reporting period is thirty-five dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045. For a taxpayer that reports at least fifty percent of its taxable amount under RCW ((82.04.255,)) 82.04.290(((2)(a),)) and 82.04.285, the maximum credit for a reporting period is seventy dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.
     (2) When the amount of tax otherwise due under this chapter is equal to or less than the maximum credit, a credit is allowed equal to the amount of tax otherwise due under this chapter.
     (3) When the amount of tax otherwise due under this chapter exceeds the maximum credit, a reduced credit is allowed equal to twice the maximum credit, minus the tax otherwise due under this chapter, but not less than zero.
     (4) The department may prepare a tax credit table consisting of tax ranges using increments of no more than five dollars and a corresponding tax credit to be applied to those tax ranges. The table ((shall)) must be prepared in such a manner that no taxpayer will owe a greater amount of tax by using the table than would be owed by performing the calculation under subsections (1) through (3) of this section. A table prepared by the department under this subsection must be used by all taxpayers in taking the credit provided in this section.

Sec. 450   RCW 82.04.44525 and 2009 c 535 s 1104 are each amended to read as follows:
     (1) Subject to the limits in this section, an eligible person is allowed a credit against the tax due under this chapter. The credit is based on qualified employment positions in eligible areas. The credit is available to persons who are engaged in international services as defined in this section. In order to receive the credit, the international service activities must take place at a business within the eligible area.
     (2)(a) The credit ((shall)) equals three thousand dollars for each qualified employment position created after July 1, 1998, in an eligible area. A credit is earned for the calendar year the person is hired to fill the position, plus the four subsequent consecutive years, if the position is maintained for those four years.
     (b) Credit may not be taken for hiring of persons into positions that exist on July 1, 1998. Credit is authorized for new employees hired for new positions created after July 1, 1998. New positions filled by existing employees are eligible for the credit under this section only if the position vacated by the existing employee is filled by a new hire.
     (c) When a position is newly created, if it is filled before July 1st, this position is eligible for the full yearly credit. If it is filled after June 30th, this position is eligible for half of the credit.
     (d) Credit may be accrued and carried over until it is used. No refunds may be granted for credits under this section.
     (3) For the purposes of this section:
     (a) "Eligible area" means: (i) A community empowerment zone under RCW 43.31C.020; or (ii) a contiguous group of census tracts that meets the unemployment and poverty criteria of RCW 43.31C.030 and is designated under subsection (4) of this section;
     (b) "Eligible person" means a person, as defined in RCW 82.04.030, who in an eligible area at a specific location is engaged in the business of providing international services;
     (c)(i) "International services" means the provision of a service, as defined under (c)(iii) of this subsection, that is subject to tax under RCW 82.04.290 (((2) or (3))), and either:
     (A) Is for a person domiciled outside the United States; or
     (B) The service itself is for use primarily outside of the United States.
     (ii) "International services" excludes ((any service taxable under RCW 82.04.290(1))) international investment management services.
     (iii) Eligible services are: Computer; data processing; information; legal; accounting and tax preparation; engineering; architectural; business consulting; business management; public relations and advertising; surveying; geological consulting; real estate appraisal; or financial services. For the purposes of this section these services mean the following:
     (A) "Computer services" are services such as computer programming, custom software modification, customization of canned software, custom software installation, custom software maintenance, custom software repair, training in the use of software, computer systems design, and custom software update services;
     (B) "Data processing services" are services such as word processing, data entry, data retrieval, data search, information compilation, payroll processing, business accounts processing, data production, and other computerized data and information storage or manipulation. "Data processing services" also includes the use of a computer or computer time for data processing whether the processing is performed by the provider of the computer or by the purchaser or other beneficiary of the service;
     (C) "Information services" are services such as electronic data retrieval or research that entails furnishing financial or legal information, data or research, internet access as defined in RCW 82.04.297, general or specialized news, or current information;
     (D) "Legal services" are services such as representation by an attorney, or other person when permitted, in an administrative or legal proceeding, legal drafting, paralegal services, legal research services, and court reporting services, arbitration, and mediation services;
     (E) "Accounting and tax preparation services" are services such as accounting, auditing, actuarial, bookkeeping, or tax preparation services;
     (F) "Engineering services" are services such as civil, electrical, mechanical, petroleum, marine, nuclear, and design engineering, machine designing, machine tool designing, and sewage disposal system designing services;
     (G) "Architectural services" are services such as structural or landscape design or architecture, interior design, building design, building program management, and space planning services;
     (H) "Business consulting services" are services such as primarily providing operating counsel, advice, or assistance to the management or owner of any business, private, nonprofit, or public organization, including but not limited to those in the following areas: Administrative management consulting; general management consulting; human resource consulting or training; management engineering consulting; management information systems consulting; manufacturing management consulting; marketing consulting; operations research consulting; personnel management consulting; physical distribution consulting; site location consulting; economic consulting; motel, hotel, and resort consulting; restaurant consulting; government affairs consulting; and lobbying;
     (I) "Business management services" are services such as administrative management, business management, and office management. "Business management services" does not include property management or property leasing, motel, hotel, and resort management, or automobile parking management;
     (J) "Public relations and advertising services" are services such as layout, art direction, graphic design, copy writing, mechanical preparation, opinion research, marketing research, marketing, or production supervision;
     (K) "Surveying services" are services such as land surveying;
     (L) "Geological consulting services" are services rendered for the oil, gas, and mining industry and other earth resource industries, and other services such as soil testing;
     (M) "Real estate appraisal services" are services such as market appraisal and other real estate valuation; and
     (N) "Financial services" are services such as banking, loan, security, investment management, investment advisory, mortgage servicing, contract collection, and finance leasing services, engaged in by financial businesses, or businesses similar to or in competition with financial businesses; and
     (d) "Qualified employment position" means a permanent full-time position to provide international services. If an employee is either voluntarily or involuntarily separated from employment, the employment position is considered filled on a full-time basis if the employer is either training or actively recruiting a replacement employee.
     (4) By ordinance, the legislative authority of a city, or legislative authorities of contiguous cities by ordinance of each city's legislative authority, with population greater than eighty thousand, located in a county containing no community empowerment zones as designated under RCW 43.31C.020, may designate a contiguous group of census tracts within the city or cities as an eligible area under this section. Each of the census tracts must meet the unemployment and poverty criteria of RCW 43.31C.030. Upon making the designation, the city or cities ((shall)) must transmit to the department of revenue a certification letter and a map, each explicitly describing the boundaries of the census tract. This designation must be made by December 31, 1998.
     (5) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section. This information includes:
     (a) Employment records for the previous six years;
     (b) Information relating to description of international service activity engaged in at the eligible location by the person; and
     (c) Information relating to customers of international service activity engaged in at that location by the person.
     (6) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used ((shall be)) is immediately due. The department ((shall)) must assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest ((shall be)) is assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, ((shall be)) is assessed retroactively to the date the tax credit was taken, and ((shall)) accrues until the taxes for which a credit has been used are repaid.
     (7) The employment security department ((shall)) must provide to the department of revenue such information needed by the department of revenue to verify eligibility under this section.

Sec. 451   RCW 82.04.4463 and 2010 1st sp.s. c 23 s 515 are each amended to read as follows:
     (1) In computing the tax imposed under this chapter, a credit is allowed for property taxes and leasehold excise taxes paid during the calendar year.
     (2) The credit is equal to:
     (a)(i)(A) Property taxes paid on buildings, and land upon which the buildings are located, constructed after December 1, 2003, and used exclusively in manufacturing commercial airplanes or components of such airplanes; and
     (B) Leasehold excise taxes paid with respect to buildings constructed after January 1, 2006, the land upon which the buildings are located, or both, if the buildings are used exclusively in manufacturing commercial airplanes or components of such airplanes; and
     (C) Property taxes or leasehold excise taxes paid on, or with respect to, buildings constructed after June 30, 2008, the land upon which the buildings are located, or both, and used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(i)(A) and (B) of this subsection (2) and are taxable under RCW ((82.04.290(3),)) 82.04.260(((10))) (1)(b)((,)) or ((82.04.250(3))) are eligible for a deduction under section 423 or 425 of this act; or
     (ii) Property taxes attributable to an increase in assessed value due to the renovation or expansion, after: (A) December 1, 2003, of a building used exclusively in manufacturing commercial airplanes or components of such airplanes; and (B) June 30, 2008, of buildings used exclusively for aerospace product development, manufacturing tooling specifically designed for use in manufacturing commercial airplanes or their components, or in providing aerospace services, by persons not within the scope of (a)(ii)(A) of this subsection (2) and are taxable under RCW ((82.04.290(3),)) 82.04.260(((10))) (1)(b)((, or 82.04.250(3))) or are eligible for a deduction under section 423 or 425 of this act; and
     (b) An amount equal to:
     (i)(A) Property taxes paid, by persons taxable under RCW 82.04.260(((10))) (1)(a), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
     (B) Property taxes paid, by persons taxable under RCW 82.04.260(((10))) (1)(b), on machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 and acquired after June 30, 2008; or
     (C) Property taxes paid, by persons ((taxable under RCW 82.04.250(3) or 82.04.290(3))) eligible for the deduction provided in section 423 or 425 of this act, on computer hardware, computer peripherals, and software exempt under RCW 82.08.975 or 82.12.975 and acquired after June 30, 2008.
     (ii) For purposes of determining the amount eligible for credit under (i)(A) and (B) of this subsection (2)(b), the amount of property taxes paid is multiplied by a fraction.
     (A) The numerator of the fraction is the total taxable amount subject to the tax imposed under RCW 82.04.260(((10))) (1) (a) or (b) on the applicable business activities of manufacturing commercial airplanes, components of such airplanes, or tooling specifically designed for use in the manufacturing of commercial airplanes or components of such airplanes.
     (B) The denominator of the fraction is the total taxable amount subject to the tax imposed under all manufacturing classifications in chapter 82.04 RCW.
     (C) For purposes of both the numerator and denominator of the fraction, the total taxable amount refers to the total taxable amount required to be reported on the person's returns for the calendar year before the calendar year in which the credit under this section is earned. The department may provide for an alternative method for calculating the numerator in cases where the tax rate provided in RCW 82.04.260(((10))) (1) for manufacturing was not in effect during the full calendar year before the calendar year in which the credit under this section is earned.
     (D) No credit is available under (b)(i)(A) or (B) of this subsection (2) if either the numerator or the denominator of the fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
     (E) As used in (b)(ii)(C) of this subsection (2), "returns" means the tax returns for which the tax imposed under this chapter is reported to the department.
     (3) The definitions in this subsection apply throughout this section, unless the context clearly indicates otherwise.
     (a) "Aerospace product development" has the same meaning as provided in RCW 82.04.4461.
     (b) "Aerospace services" has the same meaning given in RCW 82.08.975.
     (c) "Commercial airplane" and "component" have the same meanings as provided in RCW 82.32.550.
     (4) A credit earned during one calendar year may be carried over to be credited against taxes incurred in a subsequent calendar year, but may not be carried over a second year. No refunds may be granted for credits under this section.
     (5) In addition to all other requirements under this title, a person claiming the credit under this section must file a complete annual report with the department under RCW 82.32.534.
     (6) This section expires July 1, 2024.

Sec. 452   RCW 82.04.4483 and 2010 c 114 s 119 are each amended to read as follows:
     (1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under this chapter for persons engaged in a rural county in the business of manufacturing computer software or programming, as those terms are defined in this section.
     (2) A person who partially or totally relocates a business from one rural county to another rural county is eligible for any new qualifying employment positions created as a result of the relocation but is not eligible to receive credit for the jobs moved from one county to the other.
     (3)(a) To qualify for the credit, the qualifying activity of the person must be conducted in a rural county and the new qualified employment position must be located in the rural county.
     (b) If an activity is conducted both from a rural county and outside of a rural county, the credit is available if at least ninety percent of the qualifying activity is conducted within a rural county. If the qualifying activity is a service taxable activity, the place where the work is performed is the place at which the activity is conducted.
     (4)(a) The credit under this section ((shall)) equals one thousand dollars for each new qualified employment position created after January 1, 2004, in an eligible area. A credit is earned for the calendar year the person is hired to fill the position. Additionally a credit is earned for each year the position is maintained over the subsequent consecutive years, up to four years. The county must meet the definition of a rural county at the time the position is filled. If the county does not have a rural county status the following year or years, the position is still eligible for the remaining years if all other conditions are met.
     (b) Participants who claimed credit under RCW 82.04.4456 for qualified employment positions created before December 31, 2003, are eligible to earn credit for each year the position is maintained over the subsequent consecutive years, for up to four years, which four years include any years claimed under RCW 82.04.4456. Those persons who did not receive a credit under RCW 82.04.4456 before December 31, 2003, are not eligible to earn credit for qualified employment positions created before December 31, 2003.
     (c) Credit is authorized for new employees hired for new qualified employment positions created on or after January 1, 2004. New qualified employment positions filled by existing employees are eligible for the credit under this section only if the position vacated by the existing employee is filled by a new hire. A business that is a sole proprietorship without any employees is equivalent to one employee position and this type of business is eligible to receive credit for one position.
     (d) If a position is filled before July 1st, the position is eligible for the full yearly credit for that calendar year. If it is filled after June 30th, the position is eligible for half of the credit for that calendar year.
     (5) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section. This information includes information relating to description of qualifying activity conducted in the rural county and outside the rural county by the person as well as detailed records on positions and employees.
     (6) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been claimed is immediately due. The department must assess interest, but not penalties, on the taxes for which the person is not eligible. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, applies retroactively to the date the tax credit was taken, and accrues until the taxes for which a credit has been used are repaid.
     (7) The credit under this section may be used against any tax due under this chapter, but in no case may a credit earned during one calendar year be carried over to be credited against taxes incurred in a subsequent calendar year. A person is not eligible to receive a credit under this section if the person is receiving credit for the same position under chapter 82.62 RCW or RCW 82.04.44525 or is taking a credit under this chapter for information technology help desk services conducted from a rural county. No refunds may be granted for credits under this section.
     (8) Transfer of ownership does not affect credit eligibility. However, the successive credits are available to the successor for remaining periods in the five years only if the eligibility conditions of this section are met.
     (9) A person claiming a tax credit under this section must file a complete annual survey with the department under RCW 82.32.585.
     (10) As used in this section:
     (a) "Computer software" has the meaning as defined in RCW 82.04.215 after June 30, 2004, and includes "software" as defined in RCW 82.04.215 before July 1, 2004.
     (b) "Manufacturing" means the same as "to manufacture" under RCW 82.04.120. Manufacturing includes the activities of both manufacturers and processors for hire.
     (c) "Programming" means the activities that involve the creation or modification of computer software, as that term is defined in this chapter, and that are taxable as a service under RCW 82.04.290(((2))) or as a retail sale under RCW 82.04.050.
     (d) "Qualifying activity" means manufacturing of computer software or programming.
     (e) "Qualified employment position" means a permanent full-time position doing programming of computer software or manufacturing of computer software. This excludes administrative, professional, service, executive, and other similar positions. If an employee is either voluntarily or involuntarily separated from employment, the employment position is considered filled on a full-time basis if the employer is either training or actively recruiting a replacement employee. Full-time means a position for at least thirty-five hours a week.
     (f) "Rural county" means the same as in RCW 82.14.370.
     (11) No credit may be taken or accrued under this section on or after January 1, 2011.

Sec. 453   RCW 82.04.460 and 2011 c 174 s 203 are each amended to read as follows:
     (1) Except as otherwise provided in this section, any person earning apportionable income taxable under this chapter and also taxable in another state must, for the purpose of computing tax liability under this chapter, apportion to this state, in accordance with RCW 82.04.462, that portion of the person's apportionable income derived from business activities performed within this state.
     (2) The department must by rule provide a method of apportioning the apportionable income of financial institutions, where such apportionable income is taxable under RCW 82.04.290. The rule adopted by the department must, to the extent feasible, be consistent with the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions as existing on June 1, 2010, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this section, except that:
     (a) The department's rule must provide for a single factor apportionment method based on the receipts factor; and
     (b) The definition of "financial institution" contained in appendix A to the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions is advisory only.
     (3) The department may by rule provide a method or methods of apportioning or allocating gross income derived from sales of telecommunications service and competitive telephone service taxed under this chapter, if the gross proceeds of sales subject to tax under this chapter do not fairly represent the extent of the taxpayer's income attributable to this state. The rule must provide for an equitable and constitutionally permissible division of the tax base.
     (4) For purposes of this section, the following definitions apply unless the context clearly requires otherwise:
     (a) "Apportionable income" means gross income of the business generated from engaging in apportionable activities, including income received from apportionable activities performed outside this state if the income would be taxable under this chapter if received from activities in this state, less the exemptions and deductions allowable under this chapter. For purposes of this subsection, "apportionable activities" means only those activities taxed under:
     (i) ((RCW 82.04.255;
     (ii) RCW 82.04.260 (3), (4), (5), (6), (7), (8), (9), and (12);
     (iii) RCW 82.04.280 (1)(e);
     (iv))) RCW 82.04.285;
     (((v))) (ii) RCW 82.04.286;
     (((vi))) (iii) RCW 82.04.290;
     (((vii) RCW 82.04.2907;
     (viii) RCW 82.04.2908;
     (ix))) (iv) RCW 82.04.263, but only to the extent of any activity that would be taxable under ((any of the provisions enumerated under (a)(i) through (viii) of this subsection (4))) RCW 82.04.290 if the tax classification in RCW 82.04.263 did not exist; and
     (((x))) (v) RCW 82.04.260(((13))) (3) and 82.04.280(1)(a), but only with respect to advertising.
     (b)(i) "Taxable in another state" means that the taxpayer is subject to a business activities tax by another state on its income received from engaging in apportionable activities; or the taxpayer is not subject to a business activities tax by another state on its income received from engaging in apportionable activities, but any other state has jurisdiction to subject the taxpayer to a business activities tax on such income under the substantial nexus standards in RCW 82.04.067(1).
     (ii) For purposes of this subsection (4)(b), "business activities tax" and "state" have the same meaning as in RCW 82.04.462.

Sec. 454   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) 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 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.

Sec. 455   RCW 82.04.620 and 2007 c 447 s 1 are each amended to read as follows:
     In computing tax there may be deducted from the measure of tax imposed by RCW 82.04.290(((2))) amounts received by physicians or clinics for drugs for infusion or injection by licensed physicians or their agents for human use pursuant to a prescription, but only if the amounts: (1) Are separately stated on invoices or other billing statements; (2) do not exceed the then current federal rate; and (3) are covered or required under a health care service program subsidized by the federal or state government. The federal rate means the rate at or below which the federal government or its agents reimburse providers for prescription drugs administered to patients as provided for in the medicare, part B, drugs average sales price information resource as published by the United States department of health and human services, or any successor index thereto.

Sec. 456   RCW 82.08.806 and 2011 c 174 s 204 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to sales, to a printer or publisher, of computer equipment, including repair parts and replacement parts for such equipment, when the computer equipment is used primarily in the printing or publishing of any printed material, or to sales of or charges made for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the computer equipment. This exemption applies only to computer equipment not otherwise exempt under RCW 82.08.02565.
     (2) A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. This exemption is available only when the purchaser provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
     (3) The definitions in this subsection (3) apply throughout this section, unless the context clearly requires otherwise.
     (a) "Computer" has the same meaning as in RCW 82.04.215.
     (b) "Computer equipment" means a computer and the associated physical components that constitute a computer system, including monitors, keyboards, printers, modems, scanners, pointing devices, and other computer peripheral equipment, cables, servers, and routers. "Computer equipment" also includes digital cameras and computer software.
     (c) "Computer software" has the same meaning as in RCW 82.04.215.
     (d) "Primarily" means greater than fifty percent as measured by time.
     (e) "Printer or publisher" means a person, as defined in RCW 82.04.030, who is subject to tax under RCW 82.04.260(((13))) (3) or 82.04.280(1)(a).
     (4) "Computer equipment" does not include computer equipment that is used primarily for administrative purposes including but not limited to payroll processing, accounting, customer service, telemarketing, and collection. If computer equipment is used simultaneously for administrative and nonadministrative purposes, the administrative use must be disregarded during the period of simultaneous use for purposes of determining whether the computer equipment is used primarily for administrative purposes.

NEW SECTION.  Sec. 457   A new section is added to chapter 82.16 RCW to read as follows:
     Persons engaged in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce, as that term is defined in section 422 of this act, are exempt from payment of taxes imposed by this chapter for that portion of their business subject to taxation under RCW 82.04.290(1).

Sec. 458   RCW 82.16.100 and 2001 c 320 s 8 are each amended to read as follows:
     The business of collection, receipt, transfer, including transportation between any locations, storage, or disposal of solid waste is not subject to this chapter. Any such business activities are subject to taxation under the classification in RCW 82.04.290(((2))). "Solid waste" for purposes of this section is defined in RCW 82.18.010.

Sec. 459   RCW 82.32.045 and 2010 1st sp.s. c 23 s 1103 are each amended to read as follows:
     (1) Except as otherwise provided in this chapter, payments of the taxes imposed under chapters 82.04, 82.08, 82.12, 82.14, and 82.16 RCW, along with reports and returns on forms prescribed by the department, are due monthly within twenty-five days after the end of the month in which the taxable activities occur.
     (2) The department of revenue may relieve any taxpayer or class of taxpayers from the obligation of remitting monthly and may require the return to cover other longer reporting periods, but in no event may returns be filed for a period greater than one year. For these taxpayers, tax payments are due on or before the last day of the month next succeeding the end of the period covered by the return.
     (3) The department of revenue may also require verified annual returns from any taxpayer, setting forth such additional information as it may deem necessary to correctly determine tax liability.
     (4) Notwithstanding subsections (1) and (2) of this section, the department may relieve any person of the requirement to file returns if the following conditions are met:
     (a) The person's value of products, gross proceeds of sales, or gross income of the business, from all business activities taxable under chapter 82.04 RCW, is less than:
     (i) Twenty-eight thousand dollars per year; or
     (ii) Forty-six thousand six hundred sixty-seven dollars per year for persons generating at least fifty percent of their taxable amount from activities taxable under RCW ((82.04.255,)) 82.04.290(((2)(a),)) and 82.04.285;
     (b) The person's gross income of the business from all activities taxable under chapter 82.16 RCW is less than twenty-four thousand dollars per year; and
     (c) The person is not required to collect or pay to the department of revenue any other tax or fee which the department is authorized to collect.

Sec. 460   RCW 82.32.533 and 2010 c 111 s 801 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section, no person may be held liable for the failure to collect or pay state and local sales and use taxes accrued before July 26, 2009, on the sale or use of digital goods or of services defined as a retail sale in RCW 82.04.050(2)(a) and rendered in respect to digital goods.
     (2) Subsection (1) of this section does not relieve any person from liability for state and local sales taxes that the person collected from buyers but did not remit to the department of revenue.
     (3) Nothing in this section may be construed as authorizing the refund of state and local sales and use taxes properly paid on the sale or use, before July 26, 2009, of digital goods or of services defined as a retail sale in RCW 82.04.050(2)(a) and rendered in respect to digital goods.
     (4) A person is not entitled to a credit or refund of any business and occupation tax paid in excess of that properly due as a result of the person paying tax on its income earned from the sale of eligible digital products and services at the tax rate provided in RCW 82.04.290(((2)(a))) rather than the tax rate provided in RCW 82.04.250(((1))), unless the person requesting the credit or refund has paid the proper amount of state and local sales taxes due on the sales of the eligible digital products and services that generated the income in respect to which the business and occupation tax credit or refund is sought. For purposes of this subsection, "eligible digital products and services" means: (a) Digital goods; and (b) services defined as a retail sale in RCW 82.04.050(2)(a) and rendered in respect to digital goods.
     (5) For purposes of this section, "digital goods" has the same meaning as in RCW 82.04.192.

Sec. 461   RCW 82.32.790 and 2010 c 114 s 201 and 2010 c 106 s 401 are each reenacted and amended to read as follows:
     (1)(a) Section ((206, chapter 106, Laws of 2010, sections 104,)) 417, chapter . . ., Laws of 2012 (section 417 of this act), sections 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, ((section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and section 4)) and sections 1, 2, 5 through 10, and 12, chapter 149, Laws of 2003 are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington.
     (b) For the purposes of this section:
     (i) "Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965.
     (ii) "Semiconductor microchip fabrication" means "manufacturing semiconductor microchips" as defined in RCW 82.04.426.
     (iii) "Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least one billion dollars.
     (2) Section 417, chapter . . ., Laws of 2012 (section 417 of this act), sections 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, and sections 1, 2, 5 through 10, and 12, chapter 149, Laws of 2003 take((s)) effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, as determined by the director of the department of revenue.
     (3)(a) The department of revenue must provide notice of the effective date of ((sections 104,)) section 417, chapter . . ., Laws of 2012 (section 417 of this act), sections 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010(([,] section 3, chapter 461, Laws of 2009, section 7, chapter 300, Laws of 2006, and section 4)), and sections 1, 2, 5 through 10, and 12, chapter 149, Laws of 2003 to affected taxpayers, the legislature, and others as deemed appropriate by the department.
     (b) If, after making a determination that a contract has been signed and chapter 149, Laws of 2003 is effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department must make a determination that section 417, chapter . . ., Laws of 2012 (section 417 of this act), sections 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010 and sections 1, 2, 5 through 10, and 12, chapter 149, Laws of 2003 ((is)) are no longer effective, and all taxes that would have been otherwise due are deemed deferred taxes and are immediately assessed and payable from any person ((reporting tax under RCW 82.04.240(2) or)) claiming an exemption, deduction, or credit under ((section 2 or 5 through 10, chapter 149, Laws of 2003)) section 417 of this act or RCW 82.04.426, 82.04.448, 82.08.965, 82.08.970, 82.12.965, 82.12.970, or 84.36.645. The department is not authorized to make a second determination regarding the effective date of section 417, chapter . . ., Laws of 2012 (section 417 of this act), sections 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, and sections 1, 2, 5 through 10, and 12, chapter 149, Laws of 2003.

Sec. 462   RCW 82.45.195 and 2010 1st sp.s. c 23 s 518 are each amended to read as follows:
     A sale of standing timber is exempt from tax under this chapter if the gross income from such sale is taxable under RCW 82.04.260(((11))) (2)(d).

NEW SECTION.  Sec. 501   It is the legislature's intent that the department of revenue administer local business and occupation taxes in a manner similar to the administration and collection of local sales and use taxes.

NEW SECTION.  Sec. 502   A new section is added to chapter 35.102 RCW to read as follows:
     (1) Except as provided in subsection (2) of this section, no city may impose or continue to impose a business and occupation tax after December 31, 2014, unless it consents to having the department collect and administer its tax in accordance with the provisions of this chapter.
     (2) The department may delay or phase-in the collection and administration of city business and occupation taxes beyond January 1, 2015, if funding or other resources are insufficient to enable the department to meet the deadline in subsection (1) of this section or as necessary to ensure the department is adequately prepared to assume collection and administration of city business and occupation taxes and that the transition to department collection and administration of city business and occupation taxes is as seamless as possible. To that end, the department, working with affected cities, is authorized to establish a schedule for assuming the collection and administration of city business and occupation taxes. Cities scheduled to transition to having the department collect and administer their business and occupation taxes on or after January 1, 2015, may continue to collect and administer their business and occupation taxes until the date the department will begin collecting and administering the city's business and occupation tax as determined by the department and communicated to the city.
     (3)(a) The department must charge a fee to a city to collect and administer its business and occupation tax. The fee may be set in an amount necessary to reasonably approximate the department's anticipated costs of collecting and administering city business and occupation taxes, defray the costs incurred by the department to make changes to its infrastructure and information technology systems to accommodate the collection and administration of city business and occupation taxes, and to generate revenue for infrastructure and information technology system improvements used for the collection and administration of city business and occupation taxes. However, the fee may not exceed one percent of the business and occupation taxes collected by the department on behalf of a city. The department may adjust the fee but not more frequently than once per year. Fees imposed under this subsection must be uniform for all cities imposing a business and occupation tax collected and administered by the department. The department's determination of the amount of fee charged to a city may not be overturned by a court except upon a showing by clear and convincing evidence that the department acted arbitrarily.
     (b) The local business and occupation tax collection and administration account is created in the state treasury. All fees collected under the authority of this subsection must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only to collect and administer city business and occupation taxes.
     (4) The department may collect and administer a city's business and occupation tax without entering into a contract with the city. However, if the department and a city choose to enter into a contract for the collection and administration of the city's business and occupation tax, the contract must include provisions to resolve disputes using a nonjudicial process before resorting to litigation. A contract also must include a procedure for notifying the other party that a violation of the contract is believed to have occurred, a nonjudicial procedure for establishing whether a violation has in fact occurred, an opportunity to correct such violation, and, should the violation fail to be resolved through this process, a provision that litigation to resolve the dispute must be brought in the superior court for Thurston county.

NEW SECTION.  Sec. 503   A new section is added to chapter 35.102 RCW to read as follows:
     The department may take any lawful action it deems advisable to effectively and efficiently carry out its duties under this chapter.

NEW SECTION.  Sec. 504   A new section is added to chapter 35.102 RCW to read as follows:
     (1) Business and occupation taxes collected by the department on behalf of a city, less the amount of the department's collection and administration fee, must be deposited into the city business and occupation tax account hereby created in the state treasury. Moneys in the local business and occupation tax account may be withdrawn only for:
     (a) Distribution to the cities entitled to the tax proceeds; and
     (b) Making refunds of overpaid taxes.
     (2) Penalties and interest on city business and occupation taxes collected by the department belong to the state and must be deposited into the general fund.
     (3) If a return or payment is submitted with less than the full amount of taxes, interest, and penalties due, the department may allocate payments among applicable funds so as to minimize administrative costs to the extent practicable.
     (4) All administrative provisions in chapters 82.01, 82.03, 82.04, 82.32, and 82.32A RCW, insofar as they are applicable to state business and occupation taxes and not inconsistent with the provisions of this chapter, are applicable to city business and occupation taxes collected and administered by the department.
     (5) Except as provided in RCW 43.08.190, all earnings of investments of balances in the local business and occupation tax account must be credited to the local business and occupation tax account and distributed monthly to the cities whose business and occupation taxes are collected and administered by the department.

NEW SECTION.  Sec. 505   A new section is added to chapter 35.102 RCW to read as follows:
     (1) Collection and administration of local business and occupation taxes by the department includes the authority for the department to conduct audits for any city imposing a business and occupation tax. However, a city may also conduct its own business and occupation tax audits subject to the limitations in this section.
     (2) Cities conducting their own business and occupation tax audits may not conduct an audit for any period of time included in an audit of the city's business and occupation tax conducted by the department. Also, cities may not, without consent from the department, conduct an audit of any business if (a) the department has notified the business of the department's intent to conduct an audit of the business, and the city's business and occupation tax is within the scope of the audit or (b) the department's current audit plan includes the business, and the city's business and occupation tax is within the scope of the planned audit.
     (3) Cities conducting their own business and occupation tax audits must use any format and template required by the department. To assist cities in complying with this requirement, the department must provide any required template and instructions on any required format to cities conducting their own business and occupation tax audits. Cities conducting their own business and occupation tax audits must also forward the results of any such audit to the department in a form and format acceptable to the department so that the department, and not the city, may issue any resulting assessment, credit, or refund to the taxpayer as deemed appropriate by the department. The department may make an independent determination of whether a city's business and occupation tax audit justifies the issuance of an assessment, refund, credit, future reporting instructions, or other appropriate action including entering into a closing agreement with the taxpayer.
     (4) Nothing in this section may be construed as giving cities the authority to conduct state business and occupation tax audits.

NEW SECTION.  Sec. 506   A new section is added to chapter 35.102 RCW to read as follows:
     (1) At such time as the department begins collecting and administering a city's business and occupation tax, the department may provide official written advice and written tax reporting instructions to taxpayers concerning the city's business and occupation tax. If the department determines that input from the city would be helpful, the department may notify the affected city or cities of the taxpayer's request and provide a reasonable opportunity for the city or cities to provide input. When the department notifies a city of a taxpayer's request for official written guidance or written tax reporting instructions, the department must advise the city of any internal deadline for responding to the taxpayer's request. The department may, but need not, extend any internal deadline for responding to a taxpayer's request to accommodate a city's opportunity under this subsection to provide input. Failure to notify a city of a taxpayer's request for official written advice or written tax reporting instructions does not invalidate the department's official written advice or written tax reporting instructions.
     (2) At such time as the department begins collecting and administering a city's business and occupation tax, RCW 82.32.160, 82.32.170, and chapter 82.03 RCW provide the sole administrative review of the amount of city business and occupation taxes, penalties, or interest paid by the taxpayer or assessed by the department. In appeals before the department involving a city's business and occupation tax, the department will provide a meaningful opportunity for the city to present its views to the department when the department determines that input from the city will assist the department in resolving the appeal. Input by a city must be in writing, and the city must provide a copy of its input to the taxpayer. A taxpayer will have a reasonable opportunity, as determined by the department, to respond to the city's input. This subsection applies even to disputes over an assessment issued as a result of a city's own business and occupation tax audit of a taxpayer.
     (3) At such time as the department begins collecting and administering a city's business and occupation tax, the provisions of RCW 82.03.180, 82.32.150, and 82.32.180 govern judicial proceedings seeking refunds of that city's business and occupation tax, penalties, or interest; to restrain or enjoin the collection of that city's business and occupation tax, penalties, or interest; or review of a decision of the board of tax appeals concerning the city's business and occupation tax, penalties, or interest. This subsection applies even to disputes over an assessment issued as a result of a city's own business and occupation tax audit of a taxpayer.

Sec. 507   RCW 35.102.070 and 2003 c 79 s 7 are each amended to read as follows:
     (1)(a) A city that imposes a business and occupation tax ((shall)) must allow reporting and payment of tax on a monthly, quarterly, or annual basis. Except as provided in subsection (2) of this section, the frequency for any particular person may be assigned at the discretion of the city((, except that monthly reporting may be assigned only if it can be demonstrated that the taxpayer is remitting excise tax to the state on a monthly basis. For persons assigned a monthly frequency, payment is due within the same time period provided for monthly taxpayers under RCW 82.32.045. For persons assigned a quarterly or annual frequency,)).
     (b) Payment is due within the same time period as provided ((for quarterly or annual frequency)) under RCW 82.32.045.
     (2)(a) Monthly reporting may be assigned only if it can be demonstrated that the taxpayer is remitting excise tax to the state on a monthly basis.
     (b) A person's frequency for reporting city business and occupation taxes must coincide with the person's frequency for reporting state business and occupation taxes at such time as the department collects and administers the city's business and occupation tax.

Sec. 508   RCW 35.102.080 and 2003 c 79 s 8 are each amended to read as follows:
     (1) ((A city that imposes a business and occupation tax shall compute)) Interest charged a taxpayer on an underpaid ((tax or penalty)) city business and occupation tax liability must be computed in accordance with RCW 82.32.050.
     (2) ((A city that imposes a business and occupation tax shall compute)) Interest paid on refunds or credits of amounts paid or other recovery allowed a taxpayer with respect to a city's business and occupation taxes, penalties, and interest must be computed in accordance with RCW 82.32.060.

Sec. 509   RCW 35.102.090 and 2003 c 79 s 9 are each amended to read as follows:
     ((A city that imposes a business and occupation tax shall provide for the imposition of)) Penalties on municipal business and occupation taxes must be imposed in accordance with chapter 82.32 RCW.

Sec. 510   RCW 35.102.145 and 2010 c 106 s 101 are each amended to read as follows:
     A city that imposes a business and occupation tax may by ordinance provide that return or tax information is confidential, privileged, and subject to disclosure in the manner provided by RCW 82.32.330. When the department is responsible for collecting and administering a city's business and occupation tax, RCW 82.32.330 applies to that city's business and occupation tax information.

NEW SECTION.  Sec. 511   A new section is added to chapter 35.102 RCW to read as follows:
     When the department begins to collect and administer a city's business and occupation tax, the city has the right to periodically examine the records of the department as they concern the city's business and occupation tax or the taxpayers of the city subject to the city's business and occupation tax. The department may establish reasonable parameters around a city's right under this section to examine the department's records as the department deems necessary to avoid an undue burden on the department. Chapter 42.56 RCW does not apply to requests by a city for records of the department described in this section.

NEW SECTION.  Sec. 512   A new section is added to chapter 35.102 RCW to read as follows:
     (1) For city business and occupation taxes collected and administered by the department, the department will, upon ten days' notice to the affected cities, redistribute taxes distributed in error from the city that received the original distribution to the city entitled to the tax. However, no such redistribution may be made as to amounts originally distributed more than six monthly distribution periods before the monthly distribution period in which the department obtains knowledge of the improper distribution. For purposes of this subsection, "obtains knowledge of the improper distribution" includes information from a city or other person calling into question in any way the amount of a distribution of city business and occupation taxes.
     (2) Subsection (1) of this section does not affect in any way a person's liability for unpaid or underpaid city business and occupation tax liability or of a person's right to a refund or credit of overpaid city business and occupation taxes, if such unpaid, underpaid, or overpaid liability is discovered within the limits prescribed in RCW 35.102.100, 35.102.110, and chapter 82.32 RCW.

NEW SECTION.  Sec. 513   A new section is added to chapter 35.102 RCW to read as follows:
     Cities imposing a business and occupation tax that is collected and administered by the department in accordance with this chapter must defend and hold the department and state harmless from claims that challenge the authority of the city to impose its business and occupation tax. In the event there is a legal challenge to the validity of the ordinances imposing a city's business and occupation tax relating to the authority of the city to impose the tax, the department is not obligated to represent the city or otherwise to defend the city's position in any proceeding relating to such challenge.

NEW SECTION.  Sec. 514   A new section is added to chapter 35.102 RCW to read as follows:
     A business and occupation tax change enacted by a city whose business and occupation taxes are collected and administered by the department takes effect (1) no sooner than seventy-five days after the department receives notice of the change and (2) only on the first day of January, April, July, or October.

NEW SECTION.  Sec. 515   A new section is added to chapter 35.102 RCW to read as follows:
     The department may refuse to administer and enforce any provision of the city's business and occupation tax that is inconsistent with this chapter. Within five working days following the department's refusal to administer a provision of a city's business and occupation tax ordinance, the department must provide notice to the city of the department's refusal and the reasons therefore.

Sec. 516   RCW 82.32.080 and 2011 c 24 s 1 and 2010 2nd sp.s. c 2 s 2 are each reenacted and amended to read as follows:
     (1) When authorized by the department, payment of the tax may be made by uncertified check under such rules as the department prescribes, but, if a check so received is not paid by the bank on which it is drawn, the taxpayer, by whom such check is tendered, will remain liable for payment of the tax and for all legal penalties, the same as if such check had not been tendered.
     (2)(a) Except as otherwise provided in this subsection, payment of the tax must be made by electronic funds transfer, as defined in RCW 82.32.085. As an alternative to electronic funds transfer, the department may authorize other forms of electronic payment, such as payment by credit card. All state and local taxes administered by this chapter are subject to this requirement, except that the department may exclude any taxes not reported on the combined excise tax return or any successor return from the electronic payment requirement in this subsection.
     (b) The department may waive the electronic payment requirement in this subsection for any taxpayer or class of taxpayers, for good cause or for whom the department has assigned a reporting frequency that is less than quarterly. In the discretion of the department, a waiver under this subsection may be made temporary or permanent, and may be made on the department's own motion.
     (c) The department is authorized to accept payment of taxes by electronic funds transfer or other acceptable forms of electronic payment from taxpayers that are not subject to the mandatory electronic payment requirements in this subsection.
     (3)(a) Except as otherwise provided in this subsection, returns must be filed electronically using the department's online tax filing service or other method of electronic reporting as the department may authorize.
     (b) The department may waive the electronic filing requirement in this subsection for any taxpayer or class of taxpayers, for good cause or for whom the department has assigned a reporting frequency that is less than quarterly. In the discretion of the department, a waiver under this subsection may be made temporary or permanent, and may be made on the department's own motion.
     (c) The department is authorized to allow electronic filing of returns from taxpayers that are not subject to the mandatory electronic filing requirements in this subsection.
     (4)(a)(i) The department, for good cause shown, may extend the time for making and filing any return, and may grant such reasonable additional time within which to make and file returns as it may deem proper, but any permanent extension granting the taxpayer a reporting date without penalty more than ten days beyond the due date, and any extension in excess of thirty days must be conditional on deposit with the department of an amount to be determined by the department which is approximately equal to the estimated tax liability for the reporting period or periods for which the extension is granted. In the case of a permanent extension or a temporary extension of more than thirty days the deposit must be deposited within the state treasury with other tax funds and a credit recorded to the taxpayer's account which may be applied to taxpayer's liability upon cancellation of the permanent extension or upon reporting of the tax liability where an extension of more than thirty days has been granted.
     (ii) The department must review the requirement for deposit at least annually and may require a change in the amount of the deposit required when it believes that such amount does not approximate the tax liability for the reporting period or periods for which the extension is granted.
     (b) During a state of emergency declared under RCW 43.06.010(12), the department, on its own motion or at the request of any taxpayer affected by the emergency, may extend the time for making or filing any return as the department deems proper. The department may not require any deposit as a condition for granting an extension under this subsection (4)(b).
     (5) The department must keep full and accurate records of all funds received and disbursed by it. Subject to the provisions of RCW 82.32.105, 82.32.052, and 82.32.350, the department must apply the payment of the taxpayer first against penalties and interest, and then upon the tax, without regard to any direction of the taxpayer.
     (6) The department may refuse to accept any return that is not accompanied by a remittance of the tax shown to be due thereon or that is not filed electronically as required in this section. When such return is not accepted, the taxpayer is deemed to have failed or refused to file a return and is subject to the procedures provided in RCW 82.32.100 and to the penalties provided in RCW 82.32.090. The above authority to refuse to accept a return may not apply when a return is timely filed electronically and a timely payment has been made by electronic funds transfer or other form of electronic payment as authorized by the department.
     (7) Except for returns and remittances required to be transmitted to the department electronically under this section and except as otherwise provided in this chapter, a return or remittance that is transmitted to the department by United States mail is deemed filed or received on the date shown by the post office cancellation mark stamped upon the envelope containing it. A return or remittance that is transmitted to the department electronically is deemed filed or received according to procedures set forth by the department.
     (8)(a) For purposes of subsections (2) and (3) of this section, "good cause" means the inability of a taxpayer to comply with the requirements of subsection (2) or (3) of this section because:
     (i) The taxpayer does not have the equipment or software necessary to enable the taxpayer to comply with subsection (2) or (3) of this section;
     (ii) The equipment or software necessary to enable the taxpayer to comply with subsection (2) or (3) of this section is not functioning properly;
     (iii) The taxpayer does not have access to the internet using the taxpayer's own equipment;
     (iv) The taxpayer does not have a bank account or a credit card;
     (v) The taxpayer's bank is unable to send or receive electronic funds transfer transactions; or
     (vi) Some other circumstance or condition exists that, in the department's judgment, prevents the taxpayer from complying with the requirements of subsection (2) or (3) of this section.
     (b) "Good cause" also includes any circumstance that, in the department's judgment, supports the efficient or effective administration of the tax laws of this state, including providing relief from the requirements of subsection (2) or (3) of this section to any taxpayer that is voluntarily collecting and remitting this state's sales or use taxes on sales to Washington customers but has no legal requirement to be registered with the department.

Sec. 517   RCW 34.05.328 and 2011 c 298 s 21 and 2011 c 149 s 1 are each reenacted and amended to read as follows:
     (1) Before adopting a rule described in subsection (5) of this section, an agency must:
     (a) Clearly state in detail the general goals and specific objectives of the statute that the rule implements;
     (b) Determine that the rule is needed to achieve the general goals and specific objectives stated under (a) of this subsection, and analyze alternatives to rule making and the consequences of not adopting the rule;
     (c) Provide notification in the notice of proposed rule making under RCW 34.05.320 that a preliminary cost-benefit analysis is available. The preliminary cost-benefit analysis must fulfill the requirements of the cost-benefit analysis under (d) of this subsection. If the agency files a supplemental notice under RCW 34.05.340, the supplemental notice must include notification that a revised preliminary cost-benefit analysis is available. A final cost-benefit analysis must be available when the rule is adopted under RCW 34.05.360;
     (d) Determine that the probable benefits of the rule are greater than its probable costs, taking into account both the qualitative and quantitative benefits and costs and the specific directives of the statute being implemented;
     (e) Determine, after considering alternative versions of the rule and the analysis required under (b), (c), and (d) of this subsection, that the rule being adopted is the least burdensome alternative for those required to comply with it that will achieve the general goals and specific objectives stated under (a) of this subsection;
     (f) Determine that the rule does not require those to whom it applies to take an action that violates requirements of another federal or state law;
     (g) Determine that the rule does not impose more stringent performance requirements on private entities than on public entities unless required to do so by federal or state law;
     (h) Determine if the rule differs from any federal regulation or statute applicable to the same activity or subject matter and, if so, determine that the difference is justified by the following:
     (i) A state statute that explicitly allows the agency to differ from federal standards; or
     (ii) Substantial evidence that the difference is necessary to achieve the general goals and specific objectives stated under (a) of this subsection; and
     (i) Coordinate the rule, to the maximum extent practicable, with other federal, state, and local laws applicable to the same activity or subject matter.
     (2) In making its determinations pursuant to subsection (1)(b) through (h) of this section, the agency must place in the rule-making file documentation of sufficient quantity and quality so as to persuade a reasonable person that the determinations are justified.
     (3) Before adopting rules described in subsection (5) of this section, an agency must place in the rule-making file a rule implementation plan for rules filed under each adopting order. The plan must describe how the agency intends to:
     (a) Implement and enforce the rule, including a description of the resources the agency intends to use;
     (b) Inform and educate affected persons about the rule;
     (c) Promote and assist voluntary compliance; and
     (d) Evaluate whether the rule achieves the purpose for which it was adopted, including, to the maximum extent practicable, the use of interim milestones to assess progress and the use of objectively measurable outcomes.
     (4) After adopting a rule described in subsection (5) of this section regulating the same activity or subject matter as another provision of federal or state law, an agency must do all of the following:
     (a) Coordinate implementation and enforcement of the rule with the other federal and state entities regulating the same activity or subject matter by making every effort to do one or more of the following:
     (i) Deferring to the other entity;
     (ii) Designating a lead agency; or
     (iii) Entering into an agreement with the other entities specifying how the agency and entities will coordinate implementation and enforcement.
     If the agency is unable to comply with this subsection (4)(a), the agency must report to the legislature pursuant to (b) of this subsection;
     (b) Report to the joint administrative rules review committee:
     (i) The existence of any overlap or duplication of other federal or state laws, any differences from federal law, and any known overlap, duplication, or conflict with local laws; and
     (ii) Make recommendations for any legislation that may be necessary to eliminate or mitigate any adverse effects of such overlap, duplication, or difference.
     (5)(a) Except as provided in (b) of this subsection, this section applies to:
     (i) Significant legislative rules of the departments of ecology, labor and industries, health, revenue, social and health services, and natural resources, the employment security department, the forest practices board, the office of the insurance commissioner, and to the legislative rules of the department of fish and wildlife implementing chapter 77.55 RCW; and
     (ii) Any rule of any agency, if this section is voluntarily made applicable to the rule by the agency, or is made applicable to the rule by a majority vote of the joint administrative rules review committee within forty-five days of receiving the notice of proposed rule making under RCW 34.05.320.
     (b) This section does not apply to:
     (i) Emergency rules adopted under RCW 34.05.350;
     (ii) Rules relating only to internal governmental operations that are not subject to violation by a nongovernment party;
     (iii) Rules adopting or incorporating by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule;
     (iv) Rules that only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect;
     (v) Rules the content of which is explicitly and specifically dictated by statute;
     (vi) Rules that set or adjust fees under the authority of RCW 19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW 19.80.045;
     (vii) Rules of the department of social and health services relating only to client medical or financial eligibility and rules concerning liability for care of dependents; ((or))
     (viii) Rules of the department of revenue that adopt a uniform expiration date for reseller permits as authorized in RCW 82.32.780 and 82.32.783;
     (ix) The schedule developed by the department of revenue under section 502 of this act for assuming the collection and administration of city business and occupation taxes;
     (x) The schedule developed by the department of revenue under section 202 of this act for assuming the issuance and renewal of city business licenses through the business licensing system; and
     (xi) Amendments made by the department of revenue to the model ordinance for city business and occupation taxes.
     (c) For purposes of this subsection:
     (i) A "procedural rule" is a rule that adopts, amends, or repeals (A) any procedure, practice, or requirement relating to any agency hearings; (B) any filing or related process requirement for making application to an agency for a license or permit; or (C) any policy statement pertaining to the consistent internal operations of an agency.
     (ii) An "interpretive rule" is a rule, the violation of which does not subject a person to a penalty or sanction, that sets forth the agency's interpretation of statutory provisions it administers.
     (iii) A "significant legislative rule" is a rule other than a procedural or interpretive rule that (A) adopts substantive provisions of law pursuant to delegated legislative authority, the violation of which subjects a violator of such rule to a penalty or sanction; (B) establishes, alters, or revokes any qualification or standard for the issuance, suspension, or revocation of a license or permit; or (C) adopts a new, or makes significant amendments to, a policy or regulatory program.
     (d) In the notice of proposed rule making under RCW 34.05.320, an agency must state whether this section applies to the proposed rule pursuant to (a)(i) of this subsection, or if the agency will apply this section voluntarily.
     (6) By January 31, 1996, and by January 31st of each even-numbered year thereafter, the office of regulatory assistance, after consulting with state agencies, counties, and cities, and business, labor, and environmental organizations, must report to the governor and the legislature regarding the effects of this section on the regulatory system in this state. The report must document:
     (a) The rules proposed to which this section applied and to the extent possible, how compliance with this section affected the substance of the rule, if any, that the agency ultimately adopted;
     (b) The costs incurred by state agencies in complying with this section;
     (c) Any legal action maintained based upon the alleged failure of any agency to comply with this section, the costs to the state of such action, and the result;
     (d) The extent to which this section has adversely affected the capacity of agencies to fulfill their legislatively prescribed mission;
     (e) The extent to which this section has improved the acceptability of state rules to those regulated; and
     (f) Any other information considered by the office of financial management to be useful in evaluating the effect of this section.

Sec. 518   RCW 43.84.092 and 2011 1st sp.s. c 16 s 6, 2011 1st sp.s. c 7 s 22, 2011 c 369 s 6, 2011 c 339 s 1, 2011 c 311 s 9, 2011 c 272 s 3, 2011 c 120 s 3, and 2011 c 83 s 7 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     (a) The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the budget stabilization account, the capital vessel replacement account, the capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the cleanup settlement account, the Columbia river basin water supply development account, the Columbia river basin taxable bond water supply development account, the Columbia river basin water supply revenue recovery account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the county sales and use tax equalization account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the Interstate 405 express toll lanes operations account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the hospital safety net assessment fund, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the city business and occupation tax account, the marine resources stewardship trust account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multiagency permitting team account, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural mobility grant program account, the rural Washington loan fund, the site closure account, the skilled nursing facility safety net trust fund, the small city pavement and sidewalk account, the special category C account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the state patrol highway account, the state route number 520 civil penalties account, the state route number 520 corridor account, the state wildlife account, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state economic development commission account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts.
     (b) Any state agency that has independent authority over accounts or funds not statutorily required to be held in the state treasury that deposits funds into a fund or account in the state treasury pursuant to an agreement with the office of the state treasurer shall receive its proportionate share of earnings based upon each account's or fund's average daily balance for the period.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 519   (1) Nothing in sections 501 through 518 of this act authorizes the department of revenue to collect and administer city business and occupation taxes that were originally due before the effective date that the department of revenue begins collecting and administering the city's business and occupation tax. Even after the department has assumed responsibility for collecting and administering a city's business and occupation tax, the city retains the authority to collect and administer its business and occupation taxes with respect to taxes originally due before the effective date that the department began collecting and administering the city's business and occupation tax. This retained authority of the city includes auditing taxpayers, engaging in collection activities, processing tax payments, and participating in administrative, quasi-judicial, and judicial proceedings involving liability for a city's business and occupation tax.
     (2) Nothing in sections 501 through 518 of this act affects administrative, quasi-judicial, and judicial proceedings that are ongoing as of the effective date that the department of revenue assumes responsibility for collecting and administering the city's business and occupation tax. The same administrative, quasi-judicial, and judicial remedies available before January 1, 2015, to cities and taxpayers with respect to city business and occupation taxes also apply with respect to taxes that were originally due before the effective date that the department began collecting and administering a city's business and occupation tax.
     (3) For purposes of this section, "taxes that were originally due before the effective date that the department of revenue began collecting and administering a city's business and occupation tax" includes business and occupation taxes assessed by a city, or reported by a taxpayer, after the date that the department began collecting and administering the city's business and occupation tax but that were required to have been reported and paid before such date.

NEW SECTION.  Sec. 601   Section 112 of this act applies both prospectively and retroactively to June 1, 2010.

NEW SECTION.  Sec. 602   (1) Except as otherwise provided in this section, this act takes effect July 1, 2012.
     (2) Section 302 of this act takes effect July 1, 2014.
     (3) Sections 345 and 346 of this act take effect August 1, 2012.
     (4) Sections 401 through 416 and 418 through 462 of this act take effect January 1, 2013.
     (5) Section 417 of this act takes effect if the contingency in section 461 of this act occurs.

NEW SECTION.  Sec. 603   Section 301 of this act expires July 1, 2014.

NEW SECTION.  Sec. 604   The provisions of this act are to be liberally construed to effectuate the intent, policies, and purpose of this act to reduce the complexity of state and local business and occupation taxes and to make it easier for businesses to meet their local licensing and business and occupation tax filing obligations.

NEW SECTION.  Sec. 605   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 606   This act may be known and cited as the tax and licensing simplification act.