HOUSE BILL REPORT

HB 1

BYRepresentatives Madsen, Miller, Grimm, Sayan, Vekich, Rasmussen, Padden, Taylor, Jacobsen, Haugen and P. King 

Exempting seedlings and plantation Christmas trees from excise tax.

House Committe on Ways & Means/Revenue

Majority Report:  Do pass.  (10)

      Signed by Representatives Appelwick, Chair; Basich, Bristow, Grimm, Madsen, Rust, Schoon, Taylor, Valle and Winsley.

House Staff:Rick Wickman (786-7150)

AS PASSED HOUSE FEBRUARY 27, 1987

BACKGROUND:

Under current law, there are sales and use tax exemptions for seeds, fertilizer, and sprays used in the production of agricultural goods.  Agricultural products are also exempt from the business and occupation taxes.  Christmas tree farmers are specifically excluded from using these exemptions.

SUMMARY:

House Bill 1 would exempt from business and occupation retailing tax and retail sales tax the sale of seedlings, fertilizer, and spray used in the production of "plantation Christmas trees."  "Plantation Christmas trees" are defined in the bill as those trees which are exempt from the state timber excise tax.  "Plantation" trees are grown on land prepared by intensive cultivation and tilling, and used exclusively for Christmas tree production.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Attached.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Duane Kaiser, Northwest Christmas Tree Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Growers of plantation Christmas trees should be treated as any other agricultural producing goods enterprise and therefore be exempt from business and occupation and sales taxes on the purchases of seedlings, fertilizers, and sprays used in the growing of the trees.

House Committee - Testimony Against:      None Presented.