SENATE BILL REPORT

SHB 1336

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Ballard, Grimm, Rayburn, McLean, Ferguson, Lewis, Silver, Amondson, Kremen, Betrozoff, Bristow, Rasmussen, Doty, Baugher, Fuhrman and Smith)

Revising sales and use tax provisions on the packing of horticultural products.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 24, 1988; February 25, 1988

Majority Report:  Do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bauer, Bluechel, Cantu, Deccio, Gaspard, Hayner, Johnson, Lee, Moore, Newhouse, Saling, Smith, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7715)

                  February 26, 1988

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 25, 1988

BACKGROUND:

Materials and supplies used in manufacturing and processing which are not resold are subject to sales and use taxes.  For many years, there has been confusion over the application of the use tax to materials used in the packing of fresh horticultural products by agents or contractors defined under RCW 82.04.4287.

Fruit packing and warehouse companies utilize cartons and pallets to secure loads of fresh fruit without using twine or other materials that would bruise the fruit.  The fruit is then shipped for sale to outlets.

SUMMARY:

Materials and supplies directly used in packing of fresh horticultural products are exempt from sales and use taxes.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Representative McLean (for); Frank De Long, Washington State Horticultural Association (for); Karl Kottman, Washington State Council of Farmer Cooperatives (for)