BILL REQ. #: S-1928.1
| State of Washington | 63rd Legislature | 2013 Regular Session |
READ FIRST TIME 03/01/13.
AN ACT Relating to simplifying definitions and classifications concerning state and local tax systems; amending RCW 35.102.030, 35.102.040, 35.102.140, 35.102.160, 82.04.060, 82.04.230, 82.04.255, 82.04.260, 82.04.280, 35.102.150, 48.14.080, 82.04.261, 82.04.270, 82.04.29002, 82.04.298, 82.04.334, 82.04.440, 82.04.4451, 82.04.4463, 82.04.460, 82.08.806, 82.32.045, and 82.45.195; reenacting and amending RCW 82.04.250 and 82.04.260; adding new sections to chapter 35.102 RCW; adding new sections to chapter 82.04 RCW; creating new sections; repealing RCW 82.04.272, 82.04.2909, 82.04.294, and 35.102.120; 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; providing effective dates; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 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. 102 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 December 31, 2013,
only the department may amend the city business and occupation tax
model ordinance. Beginning January 1, 2014, 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;)) 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 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;
(b)
(((c))) (b) Tax reporting frequencies that meet the requirements of
RCW 35.102.070;
(((d))) (c) Penalty and interest provisions that meet the
requirements of RCW 35.102.080 and 35.102.090;
(((e))) (d) Claim periods that meet the requirements of RCW
35.102.100;
(((f))) (e) Refund provisions that meet the requirements of RCW
35.102.110; ((and)) (f) Provisions consistent with RCW 82.04.480 and 82.04.520;
(g) 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)
(g)(i) 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 202 of this act.
(ii) The model ordinance may not include:
(A) Any classifications that are not used for state business and
occupation tax purposes;
(B) Any classifications for persons taxable under the state public
utility tax classification engaging in the following activities:
Hauling persons or property for hire by watercraft between points in
Washington; operating tugboats of any size and income from the sale of
transportation services by vessels over sixty-five feet; sales of
transportation services using vessels under sixty-five feet, other than
tugboats; or persons engaged in chartering or transporting persons by
water from one location in Washington to another location within this
state. This subsection (2)(g)(i)(B) does not include sightseeing tours
or activities that are in the nature of guided tours where the tour may
include some water transportation; and
(C) Any classifications for persons taxable under the state public
utility tax classifications of motor transportation or urban
transportation; and
(h)(i) A provision stating that 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. Any deviation in the model ordinance from these
definitions is only permitted when expressly provided for by statute.
If a deviation is allowed by statute, such definition must be stated in
full in the model ordinance. Further, any deviation in the definitions
allowed is subject to the publication requirements in subsection (5) of
this section.
(ii) Except as provided otherwise in this subsection, 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.
(iii) For purposes of complying with this subsection (2)(h),
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.
(iv) For purposes of complying with this subsection (2)(h),
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.
(v) 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.
(vi) 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.
(vii) Notwithstanding (h)(vi) 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.
(viii) Notwithstanding (h)(vii) 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.
(ix) 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 must be uniform among all cities and with
state business and occupation tax classifications.
(4) 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 rates, tax exemptions, tax credits, and tax
deductions.
(((4))) (5) 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 department for
publication by the department to the public((, in written and
electronic form)).
Sec. 103 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. 104 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. 105 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. 106 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).
NEW SECTION. Sec. 201 (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 II of this act to
significantly reduce state business and occupation tax classifications
by:
(a) Consolidating the extracting and extracting for hire
classifications;
(b) Consolidating the public road construction and government
contracting classifications into the wholesaling classification; and
(c) Consolidating the public and nonprofit hospital and real estate
broker classifications into the catch-all service and other business
activities classification.
(4) Parts II and III of this act is not intended to materially
affect the tax burden of any person. If any provision of part II or
III of this act would, under a plain meaning analysis, materially
impact a person's tax liability, 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. 202 A new section is added to chapter 82.04
RCW to read as follows:
(1) Except as provided otherwise in subsection (2) of this section,
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.
(2) The department may not consolidate the manufacturing and
processing for hire classifications.
Sec. 203 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 to consumers as
provided in RCW 82.04.190.
Sec. 204 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. 205 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))) (8) 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. 206 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. 207 RCW 82.04.260 and 2012 2nd sp.s. c 6 s 602 and 2012 2nd
sp.s. c 6 s 204 are each reenacted and amended to read as follows:
(1) ((Upon every person engaging within this state in the business
of manufacturing:)) 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.
(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, 2015, 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, 2015, 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, 2015, 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)
(((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.)) (2) 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.
(5)
(((6))) (3) 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))) (4) 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))) (5)(a) 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.
(b) 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))) (6) 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))) (7) 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))) (8)(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))) (8)
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))) (8), "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))) (8) must file a complete annual report with the department
under RCW 82.32.534.
(e) This subsection (((11))) (8) does not apply on and after July
1, 2024.
(((12))) (9)(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))) (9)(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))) (9)(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))) (9) must file a complete annual survey with the department
under RCW 82.32.585.
(((13))) (10) 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))) (11)(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 0.365 percent through June 30, 2013,
and beginning July 1, 2013, multiplied by the rate of 0.35 percent.
(b) A person reporting under the tax rate provided in this
subsection (((14))) (11) must file a complete annual report with the
department under RCW 82.32.534.
Sec. 208 RCW 82.04.260 and 2012 2nd sp.s. c 6 s 204 are each
amended to read as follows:
(1) ((Upon every person engaging within this state in the business
of manufacturing:)) 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.
(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, 2015, 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, 2015, 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, 2015, 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)
(((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.)) (2) 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.
(5)
(((6))) (3) 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))) (4) 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))) (5)(a) 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.
(b) 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))) (6) 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))) (7) 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))) (8)(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))) (8)
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))) (8), "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))) (8) must file a complete annual report with the department
under RCW 82.32.534.
(e) This subsection (((11))) (8) does not apply on and after July
1, 2024.
(((12))) (9)(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))) (9)(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))) (9)(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))) (9) must file a complete annual survey with the department
under RCW 82.32.585.
(((13))) (10) 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))) (11)(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))) (11) must file a complete annual report with the
department under RCW 82.32.534.
Sec. 209 RCW 82.04.280 and 2010 c 106 s 205 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business
of: (a) Printing materials other than newspapers, and of publishing
periodicals or magazines; (b) ((building, repairing or improving any
street, place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
which is owned by a municipal corporation or political subdivision of
the state or by the United States and which is used or to be used,
primarily for foot or vehicular traffic including mass transportation
vehicles of any kind and including any readjustment, reconstruction or
relocation of the facilities of any public, private or cooperatively
owned utility or railroad in the course of such building, repairing or
improving, the cost of which readjustment, reconstruction, or
relocation, is the responsibility of the public authority whose street,
place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
is being built, repaired or improved; (c) extracting for hire or
processing for hire, except persons taxable as extractors for hire or
processors for hire under another section of this chapter; (d)))
operating a cold storage warehouse or storage warehouse, but not
including the rental of cold storage lockers; (((e))) (c) 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))) or (d) 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.
NEW SECTION. Sec. 210 The following acts or parts of acts are
each repealed:
(1) RCW 82.04.272 (Tax on warehousing and reselling prescription
drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
(2) RCW 82.04.2909 (Tax on aluminum smelters) and 2011 c 174 s 301;
(3) 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;
(4) RCW 35.102.120 (Definitions -- Tax classifications) and 2003 c 79
s 12;
(5) 2010 c 114 s 104;
(6) 2003 c 149 s 3;
(7) 2010 c 106 s 206;
(8) 2009 c 461 s 3;
(9) 2006 c 300 s 7; and
(10) 2003 c 149 s 4.
Sec. 211 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))) (11) and 82.04.280(1)(a) apply.
Sec. 212 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. 213 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)))
(9), a surcharge is imposed on those persons who are subject to any of
the taxes imposed under RCW 82.04.260(((11))) (9). 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))) (9)
(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. 214 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. 215 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((.)); and
(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 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).
Sec. 216 RCW 82.04.298 and 2011 c 2 s 204 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 306 of this act.
Sec. 217 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))) (9) apply to this section.
Sec. 218 RCW 82.04.440 and 2011 c 2 s 205 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))) (8) or (9)(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))) (9), 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))) (8) or (9), 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))) (8) or
(9); (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)))
(9); (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. 219 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. 220 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))) (8)(b), or 82.04.250(3); 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))) (8)(b), or 82.04.250(3); and
(b) An amount equal to:
(i)(A) Property taxes paid, by persons taxable under RCW
82.04.260(((10))) (8)(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))) (8)(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), 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))) (8) (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))) (8) 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. 221 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;)) RCW 82.04.260 ((
(ii)(3), (4), (5), (6), (7), (8), (9), and
(12))) (2) through (8) and (11);
(((iii))) (ii) RCW 82.04.280(1)(((e))) (c);
(((iv))) (iii) RCW 82.04.285;
(((v))) (iv) RCW 82.04.286;
(((vi))) (v) RCW 82.04.290;
(((vii))) (vi) RCW 82.04.2907;
(((viii))) (vii) RCW 82.04.2908;
(((ix))) (viii) 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))) (vii) of this subsection (4) if the tax
classification in RCW 82.04.263 did not exist; and
(((x))) (ix) RCW 82.04.260(((13))) (11) 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. 222 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))) (11) 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.
Sec. 223 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. 224 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)))
(9)(d).
NEW SECTION. Sec. 301 A new section is added to chapter 82.04
RCW to read as follows:
(2) The amount of the credit under this section is determined by
multiplying 0.71488 by the tax otherwise due during the reporting
period on the business of manufacturing wood biomass fuel. The
department must administer the credit in this section in a way that
results in a tax liability that is comparable to what it would have
been under the tax rate in effect for the business of manufacturing
wood biomass fuel immediately preceding the effective date of this
section.
(3) "Wood biomass fuel" has the same meaning as in RCW 82.29A.135.
(4) The credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 302 A new section is added to chapter 82.04
RCW to read as follows:
(b) The amount of the credit under this subsection (1) is
determined by multiplying 0.4 by the tax otherwise due on the business
of making wholesale sales by the taxpayer, during the reporting period,
of aluminum manufactured by the taxpayer. The department must
administer the credit in this subsection in a way that results in a tax
liability that is comparable to what it would have been under the tax
rate in effect for the business of making wholesale sales, during the
reporting period, of aluminum by the manufacturer, immediately
preceding the effective date of this section.
(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 credit as determined in (b) of this subsection (2).
(b) The amount of the credit under this subsection (2) is
determined by multiplying 0.4 by the tax otherwise due during the
reporting period on the business of manufacturing aluminum, which
includes the activities of both manufacturers and processors for hire.
The department must administer the credit in this subsection in a way
that results in a tax liability that is comparable to what it would
have been under the tax rate in effect for the business of
manufacturing aluminum.
(3) A person claiming a credit under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2013 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a credit under this section must file a complete
annual survey with the department under RCW 82.32.585.
(4) The credits in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(5) No credit may be claimed under this section for reporting
periods beginning January 1, 2017.
NEW SECTION. Sec. 303 A new section is added to chapter 82.04
RCW to read as follows:
(b) The amount of the credit under this subsection (1) is
determined by multiplying 0.43183 by the tax otherwise due, during the
reporting period, on the business of making wholesale sales of
qualifying solar energy products or qualifying components, manufactured
by the person. The department must administer the credit in this
subsection in a way that results in a tax liability that is comparable
to what it would have been under the tax rate in effect for the
business of making wholesale sales, during the reporting period, of
qualifying solar energy products or qualifying components, manufactured
by the taxpayer.
(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 credit as determined in (b) of
this subsection (2).
(b) The amount of the credit under this subsection (2) is
determined by multiplying 0.43183 by the tax otherwise due on the
business of manufacturing qualifying solar energy systems or qualifying
components during the reporting period. The department must administer
the credit in this subsection in a way that results in a tax liability
that is comparable to what it would have been under the tax rate in
effect for the business of manufacturing qualifying solar energy
products or qualifying components 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 credit under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2013 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a credit under this section must file a complete
annual survey with the department under RCW 82.32.585.
(5) No credit may be claimed under this section for reporting
periods beginning July 1, 2014.
(6) The credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 304 A new section is added to chapter 82.04
RCW to read as follows:
(2) The amount of the credit under this section is determined by
multiplying 0.71488 by the tax otherwise due on the manufacturing of
the product or products described in subsection (1) of this section
during the reporting period. The department must administer the credit
in this subsection in a way that results in a tax liability that is
comparable to what it would have been under the tax rate in effect for
the business of manufacturing the product or products described in
subsection (1) of this section during the reporting period.
(3) The credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 305 A new section is added to chapter 82.04
RCW to read as follows:
(b) The credit under this subsection from the gross proceeds of
retail sales of prescription drugs is determined by multiplying 0.70701
by the tax otherwise due on making wholesale sales of prescription
drugs by the eligible person during the reporting period. The
department must administer the credit in this subsection (1)(b) in a
way that results in a tax liability that is comparable to what it would
have been under the tax rate in effect for the business of making
wholesale sales of prescription drugs during the reporting period.
(2) The definitions in this subsection apply throughout this
section unless the context clearly requires otherwise.
(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 credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 306 A new section is added to chapter 82.04
RCW to read as follows:
(b) The amount of the credit under this subsection (1) is
determined by multiplying 0.71488 by the tax otherwise due on wholesale
sales of qualifying meat products made during the reporting period by
the eligible person. The department must administer the credit in this
subsection in a way that results in a tax liability that is comparable
to what it would have been under the tax rate in effect for the
business of making wholesale sales of qualifying meat products during
the reporting period.
(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 credit as determined in (b) of this subsection (2).
(b) The amount of the credit 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 credits 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 credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 307 A new section is added to chapter 82.04
RCW to read as follows:
(b) The amount of the credit under this subsection is determined by
multiplying 0.71488 by the tax otherwise due on the manufacturing of
eligible products by the person during the reporting period. The
department must administer the credit in this subsection in a way that
results in a tax liability that is comparable to what it would have
been under the tax rate in effect for the business of manufacturing
eligible products 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
credit as determined in (b) of this subsection (2).
(a) The amount of the credit under this subsection (2) is
determined by multiplying 0.70701 by the tax otherwise due on making
qualifying retail sales by the person during the reporting period. The
department must administer the credit in this subsection in a way that
results in a tax liability that is comparable to what it would have
been under the tax rate in effect for the business of making qualifying
retail sales during the reporting period.
(b) Persons claiming a credit 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 credit as determined in (b) of this subsection (3).
(a) The amount of the credit under this subsection (3) is
determined by multiplying 0.71488 by the tax otherwise due on making
qualifying wholesale sales by the person during the reporting period.
The department must administer the credit in this subsection in a way
that results in a tax liability that is comparable to what it would
have been under the tax rate in effect for the business of making
qualifying wholesale sales during the reporting period.
(b) Persons claiming a credit 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 unless the context clearly requires otherwise.
(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 an
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 credit in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 401 The department of revenue must convene a
group of affected stakeholders to develop recommendations to further
reduce, refine, and simplify the number of tax classifications under
chapter 82.04 RCW, the business and occupation tax. By January 1,
2014, and in compliance with RCW 43.01.036, the department must report
the group's recommendations to the governor, the senate committee on
trade and economic development, and the house of representatives
committee on technology and economic development.
NEW SECTION. Sec. 402 (1) Except as provided otherwise in this
section, this act takes effect January 1, 2014.
(2) Section 208 of this act takes effect July 1, 2015.
(3) Section 401 of this act takes effect August 1, 2013.
NEW SECTION. Sec. 403 Section 207 of this act expires July 1,
2015.
NEW SECTION. Sec. 404 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. 405 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.