BILL REQ. #:  S-3826.1 

Read first time 01/27/14.   Referred to Committee on Ways & Means.

     AN ACT Relating to providing a sales and use tax exemption for certain new building construction by maintenance repair operators for commercial airplanes; amending RCW 82.08.980, 82.08.980, 82.12.980, and 82.12.980; providing a contingent effective date; and providing contingent expiration dates.

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

Sec. 1   RCW 82.08.980 and 2010 c 114 s 126 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to charges made for labor and services rendered in respect to the constructing of new buildings by: (a) A manufacturer engaged in the manufacturing of superefficient airplanes ((or by)); (b) a port district, to be leased to a manufacturer engaged in the manufacturing of superefficient airplanes; or (c) a maintenance repair operator engaged in the maintenance of commercial airplanes or the fuselages or wings of commercial airplanes, to sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The exemption is available only when the buyer 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. For the purposes of this subsection (1), "maintenance repair operator" means a repair station under 14 C.F.R. Part 145 and "commercial airplane" has the same meaning as provided in RCW 82.32.550.
     (2) No application is necessary for the tax exemption in this section, however in order to qualify under this section before starting construction the port district must have entered into an agreement with the manufacturer to build such a facility. A person claiming the exemption under this section is subject to all the requirements of chapter 82.32 RCW. In addition, the person must file a complete annual report with the department under RCW 82.32.534.
     (3) The exemption in this section applies to buildings, or parts of buildings, that are used exclusively in the manufacturing of superefficient airplanes, including buildings used for the storage of raw materials and finished product.
     (4) For the purposes of this section, "superefficient airplane" has the meaning given in RCW 82.32.550.
     (5) This section expires July 1, 2024.

Sec. 2   RCW 82.08.980 and 2013 3rd sp.s. c 2 s 3 are each amended to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to:
     (a) Charges, for labor and services rendered in respect to the constructing of new buildings, made to (i) a manufacturer or maintenance repair operator engaged in the manufacturing or maintaining of commercial airplanes or the fuselages or wings of commercial airplanes or (ii) a port district, political subdivision, or municipal corporation, to be leased to a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes. For the purposes of this subsection (1)(a), "maintenance repair operator" means a repair station under 14 C.F.R. Part 145;
     (b) Sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing; or
     (c) Charges made for labor and services rendered in respect to installing, during the course of constructing such buildings, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
     (2) The exemption is available only when the buyer 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) No application is necessary for the tax exemption in this section. However, in order to qualify under this section before starting construction, the port district, political subdivision, or municipal corporation must have entered into an agreement with the manufacturer to build such a facility. A person claiming the exemption under this section is subject to all the requirements of chapter 82.32 RCW. In addition, the person must file a complete annual report with the department under RCW 82.32.534.
     (4) The exemption in this section applies to buildings or parts of buildings, including buildings or parts of buildings used for the storage of raw materials or finished product, that are used primarily in the manufacturing of any one or more of the following products:
     (a) Commercial airplanes;
     (b) Fuselages of commercial airplanes; or
     (c) Wings of commercial airplanes.
     (5) For the purposes of this section, "commercial airplane" has the meaning given in RCW 82.32.550.
     (6) This section expires July 1, 2040.

Sec. 3   RCW 82.12.980 and 2010 c 114 s 132 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of tangible personal property that will be incorporated as an ingredient or component of new buildings: (a) By a manufacturer engaged in the manufacturing of superefficient airplanes ((or)); (b) owned by a port district and to be leased to a manufacturer engaged in the manufacturing of superefficient airplanes; or (c) by a maintenance repair operator engaged in the maintenance of commercial airplanes or the fuselages of commercial airplanes, during the course of constructing such buildings, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
     (2) The eligibility requirements, conditions, and definitions in RCW 82.08.980 apply to this section, including the filing of a complete annual report with the department under RCW 82.32.534.
     (3) This section expires July 1, 2024.

Sec. 4   RCW 82.12.980 and 2013 3rd sp.s. c 2 s 4 are each amended to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of:
     (a) Tangible personal property that will be incorporated as an ingredient or component in constructing new buildings for (i) a manufacturer or maintenance repair operator engaged in the manufacturing or maintaining of commercial airplanes or the fuselages or wings of commercial airplanes or (ii) a port district, political subdivision, or municipal corporation, to be leased to a manufacturer engaged in the manufacturing of commercial airplanes or the fuselages or wings of commercial airplanes; or
     (b) Labor and services rendered in respect to installing, during the course of constructing such buildings, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
     (2) The eligibility requirements, conditions, and definitions in RCW 82.08.980 apply to this section, including the filing of a complete annual report with the department under RCW 82.32.534.
     (3) This section expires July 1, 2040.

NEW SECTION.  Sec. 5   Sections 1 and 3 of this act expire July 1, 2024, subject to the contingency stated in section 2, chapter 2, Laws of 2013 3rd sp. sess.

NEW SECTION.  Sec. 6   Sections 2 and 4 of this act take effect subject to the contingency stated in section 2, chapter 2, Laws of 2013 3rd sp. sess.

NEW SECTION.  Sec. 7   Sections 2 and 4 of this act expire July 1, 2040, subject to the contingency stated in section 2, chapter 2, Laws of 2013 3rd sp. sess.