CERTIFICATION OF ENROLLMENT

HOUSE BILL 2903

66TH LEGISLATURE

2020 REGULAR SESSION

HOUSE BILL 2903

ByRepresentatives Chapman, Stokesbary, Chambers, Gildon, Tharinger, and Senn

AN ACT Relating to providing that qualified dealer cash incentives paid to auto dealers are bona fide discounts for purposes of the business and occupation tax; adding a new section to chapter 82.04 RCW; creating a new section; and providing an effective date.

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

NEW SECTION.  Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:

(1) In computing tax under RCW 82.04.290(2), there may be deducted from the measure of tax the amount of qualified dealer cash incentives.

(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Motor vehicle" has the same meaning provided in RCW 46.04.320.

(b) "Qualified dealer cash incentive" means a payment or credit offered to a motor vehicle dealer as defined in RCW 46.70.011(17) by a manufacturer of a motor vehicle where:

(i) The amount of the payment or credit is based on the quantity of a specified type of motor vehicle to be sold at retail by the seller, regardless of whether the seller is required to sell a specified minimum number of vehicles;

(ii) The seller knew the terms of the offer before making the retail sales that generated the payment or credit from the manufacturer; and

(iii) The seller is not required to provide any services to the manufacturer in order to receive the payment or credit from the manufacturer. The documentation of the retail sale that generated the payment or credit from the manufacturer is not a service provided to the manufacturer.

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