H-157                _______________________________________________

                                                    HOUSE BILL NO. 496

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State of Washington                              49th Legislature                              1985 Regular Session

By Representatives Sanders, Haugen, May, Zellinsky, Patrick, Barrett, B. Williams, van Dyke, Schoon, J. Williams, Thomas, Van Luven, Betrozoff, Lewis, Brough, Padden, Chandler, G. Nelson, Bond, Fuhrman, Isaacson, L. Smith, Barnes, Hastings, Tilly, Addison, C. Smith, Miller, Ballard, Silver and Taylor

Read first time 2/4/85 and referred to Committee on Ways & Means.

AN ACT Relating to business and occupation taxes; amending  RCW 82.04.300 and 82.32.045; providing an effective date; and declaring an emergency.

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

        Sec. 1.  Section 82.04.300, chapter 15, Laws of 1961 as last amended by section 213, chapter 3, Laws of 1983 and RCW 82.04.300 are each amended to read as follows:

          This chapter shall apply to any person engaging in any business activity taxable under RCW 82.04.230, 82.04.240, 82.04.250, 82.04.260, 82.04.270, 82.04.280 and 82.04.290 other than those whose value of products, gross proceeds of sales, or gross income of the business is less than ((one thousand dollars per month:  PROVIDED, That where)) the monthly exemption.  Beginning July 1, 1985, the monthly exemption is one thousand five hundred dollars and beginning July 1, 1987, and thereafter, the monthly exemption is two thousand five hundred dollars:  PROVIDED, That the monthly exemption for persons initially engaging in any business activity is five thousand dollars for the first two-year period in which the person engages in the business activity.

For purposes of this section, a successor to a prior business, whether by purchase, corporate reorganization or merger, addition or subtraction of a partner or partners, or incorporation of a sole proprietorship or partnership, or otherwise, shall not be considered a person initially engaging in business, and a business of an affiliated, subsidiary, or substantially commonly-owned corporation, or other business entity shall not be considered a person initially engaging in business.

When one person engages in more than one business activity and the combined measures of the tax applicable to such businesses equal or exceed ((one thousand dollars per month)) the monthly exemption, no exemption or deduction from the amount of tax is allowed by this section.

          Any person claiming exemption under the provisions of this section may be required to file returns even though no tax may be due:  PROVIDED, FURTHER, That the department of revenue may allow exemptions, by general rule or regulation, in those instances in which quarterly, semiannual, or annual returns are permitted.  Exemptions for such periods shall be equivalent in amount to the total of exemptions for each month of a reporting period.

        Sec. 2.  Section 1, chapter 7, Laws of 1981 as last amended by section 63, chapter 3, Laws of 1983 2nd ex. sess. and RCW 82.32.045 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) Upon written request therefor, the department of revenue shall assign quarterly periods for tax reporting to any person whose value of products, gross proceeds of sales, or gross income of the business is less than one hundred forty-five thousand dollars for the preceding calendar year.

(4) 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.

NEW SECTION. Sec. 3.     This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect July 1, 1985.