BILL REQ. #:  S-3916.1 

Read first time 01/25/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to changing sales tax sourcing from destination based to origin based if congress does not enact legislation requiring remote sellers to collect sales tax; amending RCW 82.14.020 and 82.14.390; creating a new section; repealing RCW 82.14.490, 82.14.495, 82.14.500, 82.32.730, 82.32.755, and 82.32.760; and providing a contingent effective date.

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

Sec. 1   RCW 82.14.020 and 2010 c 106 s 223 are each amended to read as follows:
     For purposes of this chapter:
     (1) A retail sale consisting solely of the sale of tangible personal property is deemed to have occurred at the retail outlet at or from which delivery is made to the consumer;
     (2) A retail sale consisting essentially of the performance of personal, business, or professional services is deemed to have occurred at the place at which such services were primarily performed, except that for the performance of a tow truck service, as defined in RCW 46.55.010, the retail sale is deemed to have occurred at the place of business of the operator of the tow truck service;
     (3) A retail sale consisting of the rental of tangible personal property is deemed to have occurred (a) in the case of a rental involving periodic rental payments, at the place of primary use by the lessee during the period covered by each payment, or (b) in all other cases, at the place of first use by the lessee;
     (4) A retail sale within the scope of RCW 82.04.050(2), and a retail sale of taxable personal property to be installed by the seller is deemed to have occurred at the place where the labor and services involved were primarily performed;
     (5)(a) A retail sale consisting of the providing to a consumer of telephone service, as defined in RCW 82.04.065, other than a sale of tangible personal property under subsection (1) of this section or a rental of tangible personal property under subsection (3) of this section or a sale of mobile telecommunications services, is deemed to have occurred at the situs of the telephone or other instrument through which the telephone service is rendered;
     (b) A retail sale consisting of the providing of telecommunications services must be sourced in accordance with RCW 82.32.520;
     (6) A retail sale of linen and uniform supply services is deemed to occur as provided in RCW 82.08.0202;
     (7) A retail sale consisting of an extended warranty is deemed to have occurred at the business location of the seller if the extended warranty is received by the purchaser at that location. If an extended warranty is not received by the purchaser at the business location of the seller, a retail sale of an extended warranty is deemed to have occurred at the location where receipt by the buyer occurs;
     (8) "City" means a city or town;
     (((2))) (9) The meaning ascribed to words and phrases in chapters 82.04, 82.08, and 82.12 RCW, as now or hereafter amended, insofar as applicable, has full force and effect with respect to taxes imposed under authority of this chapter. However, the terms "retail sale" and "sale at retail" have only the meaning provided in RCW 82.08.010 for the purposes of this chapter, unless the context clearly requires that a different definition apply;
     (((3))) (10) "Taxable event" means any retail sale, or any use, upon which a state tax is imposed pursuant to chapter 82.08 or 82.12 RCW, as they now exist or may hereafter be amended. However, the term does not include a retail sale taxable pursuant to RCW 82.08.150, as now or hereafter amended; and
     (((4))) (11) "Treasurer or other legal depository" means the treasurer or legal depository of a county or city.

Sec. 2   RCW 82.14.390 and 2011 1st sp.s. c 50 s 973 are each amended to read as follows:
     (1) Except as provided in subsection (((7))) (6) of this section, the governing body of a public facilities district (a) created before July 31, 2002, under chapter 35.57 or 36.100 RCW that commences construction of a new regional center, or improvement or rehabilitation of an existing new regional center, before January 1, 2004; (b) created before July 1, 2006, under chapter 35.57 RCW in a county or counties in which there are no other public facilities districts on June 7, 2006, and in which the total population in the public facilities district is greater than ninety thousand that commences construction of a new regional center before February 1, 2007; (c) created under the authority of RCW 35.57.010(1)(d); or (d) created before September 1, 2007, under chapter 35.57 or 36.100 RCW, in a county or counties in which there are no other public facilities districts on July 22, 2007, and in which the total population in the public facilities district is greater than seventy thousand, that commences construction of a new regional center before January 1, 2009, or before January 1, 2011, in the case of a new regional center in a county designated by the president as a disaster area in December 2007, may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the public facilities district. The rate of tax may not exceed 0.033 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.
     (((2)(a) The governing body of a public facilities district imposing a sales and use tax under the authority of this section may increase the rate of tax up to 0.037 percent if, within three fiscal years of July 1, 2008, the department determines that, as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020, a public facilities district's sales and use tax collections for fiscal years after July 1, 2008, have been reduced by a net loss of at least 0.50 percent from the fiscal year before July 1, 2008. The fiscal year in which this section becomes effective is the first fiscal year after July 1, 2008.
     (b) The department must determine sales and use tax collection net losses under this section as provided in RCW 82.14.500 (2) and (3). The department must provide written notice of its determinations to public facilities districts. Determinations by the department of a public facilities district's sales and use tax collection net losses as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020 are final and not appealable.
     (c) A public facilities district may increase its rate of tax after it has received written notice from the department as provided in (b) of this subsection. The increase in the rate of tax must be made in 0.001 percent increments and must be the least amount necessary to mitigate the net loss in sales and use tax collections as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020. The increase in the rate of tax is subject to RCW 82.14.055.
     (3))) The tax imposed under subsection (1) of this section must be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department of revenue must perform the collection of such taxes on behalf of the county at no cost to the public facilities district. ((During the 2011-2013 fiscal biennium, distributions by the state to a public facilities district based on the additional rate authorized in subsection (2) of this section must be reduced by 3.4 percent.
     (4))) (3) No tax may be collected under this section before August 1, 2000. The tax imposed in this section expires when the bonds issued for the construction of the regional center and related parking facilities are retired, but not more than twenty-five years after the tax is first collected.
     (((5))) (4) Moneys collected under this section may only be used for the purposes set forth in RCW 35.57.020 and must be matched with an amount from other public or private sources equal to thirty-three percent of the amount collected under this section; however, amounts generated from nonvoter approved taxes authorized under chapter 35.57 RCW or nonvoter approved taxes authorized under chapter 36.100 RCW do not constitute a public or private source. For the purpose of this section, public or private sources includes, but is not limited to cash or in-kind contributions used in all phases of the development or improvement of the regional center, land that is donated and used for the siting of the regional center, cash or in-kind contributions from public or private foundations, or amounts attributed to private sector partners as part of a public and private partnership agreement negotiated by the public facilities district.
     (((6))) (5) The combined total tax levied under this section may not be greater than ((0.037)) 0.033 percent. If both a public facilities district created under chapter 35.57 RCW and a public facilities district created under chapter 36.100 RCW impose a tax under this section, the tax imposed by a public facilities district created under chapter 35.57 RCW must be credited against the tax imposed by a public facilities district created under chapter 36.100 RCW.
     (((7))) (6) A public facilities district created under chapter 36.100 RCW is not eligible to impose the tax under this section if the legislative authority of the county where the public facilities district is located has imposed a sales and use tax under RCW 82.14.0485 or 82.14.0494.

NEW SECTION.  Sec. 3   The following acts or parts of acts are each repealed:
     (1) RCW 82.14.490 (Sourcing -- Sales and use taxes) and 2007 c 6 s 503;
     (2) RCW 82.14.495 (Streamlined sales and use tax mitigation account -- Creation) and 2010 1st sp.s. c 37 s 952, 2009 c 4 s 907, & 2007 c 6 s 902;
     (3) RCW 82.14.500 (Streamlined sales and use tax mitigation account -- Funding -- Determination of losses) and 2011 1st sp.s. c 50 s 974 & 2007 c 6 s 903;
     (4) RCW 82.32.730 (Sourcing -- Streamlined sales and use tax agreement) and 2010 c 106 s 229;
     (5) RCW 82.32.755 (Sourcing compliance -- Taxpayer relief -- Interest and penalties -- Streamlined sales and use tax agreement) and 2007 c 6 s 1601; and
     (6) RCW 82.32.760 (Sourcing compliance -- Taxpayer relief -- Credits--Streamlined sales and use tax agreement) and 2007 c 6 s 1602.

NEW SECTION.  Sec. 4   This act takes effect January 1, 2014, if congress does not pass legislation by July 1, 2013, requiring remote sellers to collect the retail sales tax, use tax, or other similar tax from states to which they sell, but do not have a physical presence in such state.

NEW SECTION.  Sec. 5   Prior to August 1, 2013, the department of revenue must provide notice of whether the contingency in section 4 of this act occurs to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.