SENATE BILL REPORT

ESHB 1388

BYHouse Committee on Housing (originally sponsored by Representatives Nutley, J. Williams, Leonard, Sanders, Barnes, Wineberry, Padden, Heavey, Anderson, Jacobsen, Valle, May, Ballard, Nelson, Jesernig, Todd, Moyer, Lux, Unsoeld, Ferguson and Day)

Exempting temporary lodging for homeless persons from state and local excise taxation.

House Committe on Housing

Rereferred House Committee on Ways & Means/Revenue

Senate Committee on Ways & Means

Senate Hearing Date(s):February 27, 1988; February 29, 1988

Majority Report:  Do pass.

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

Senate Staff:William Bafus (786-7715)

                  February 29, 1988

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 29, 1988

BACKGROUND:

The use of hotel and motel facilities for emergency short term lodging (less than thirty days) of homeless persons by local nonprofit organizations is common throughout the state.  This approach to providing emergency shelter, on a short term basis, is cost-effective for many smaller emergency shelter programs.

In 1987, $509,900 was spent for the use of hotel and motel facilities by nonprofit organizations for emergency short term lodging of homeless persons.

The Department of Revenue has determined that a retail sale includes the furnishing of lodging by a hotel, rooming house, tourist court, motel, trailer camp, and the granting of any similar license to use real property, as distinguished from the renting or leasing of real property.

The state requires the collection of a retail sales tax based on the percentage of the selling price.  The current state sales tax rate is 6.5 percent, with counties and cities authorized to levy an additional combined retail sales tax not to exceed 1.3 percent.

In addition to the state and local retail sales tax, the Legislature has authorized a special excise tax on lodging in specified cities and counties.  The excise tax rate is 2 percent in Pierce and King Counties and the city of Tacoma and 5 percent in the city of Seattle.

SUMMARY:

Lodging for homeless persons would be exempt from special excise and retail sale taxation at the state and local level.  To qualify for the exemption, the lodging must be provided on an emergency basis for less than thirty days and through a shelter voucher program administered by an eligible organization.

Eligible organizations are defined as cities, towns, and counties, or their respective agencies, and groups that provide emergency food and shelter services to homeless persons.

Appropriation:    none

Revenue:    yes

Fiscal Note:      available

Effective Date:This bill takes effect July 1, 1988.

Senate Committee - Testified: Representative Nutley (for); Sylvie McGee, Washington State Coalition for the Homeless (for); Pete Peterson, Yakima County Coalition for the Homeless (for)