SENATE BILL REPORT

SB 5098

BYSenators Halsan, Owen, Bailey, Bauer, Bottiger, Smitherman, Barr, Rasmussen, Hansen, Newhouse and Gaspard

Exempting seedlings and plantation Christmas trees from excise tax.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 5, 1987

Majority Report:  Do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Cantu, Lee, McDonald, Moore, Owen, Rasmussen, Rinehart, Talmadge, Vognild, Warnke, Williams.

Senate Staff:William Bafus (786-7437)

                  February 6, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 5, 1987

BACKGROUND:

At the present time, the business and occupation tax code excludes from the definition of "retail sale" or "sale at retail" the sale of seed, feed, fertilizer, chemicals, etc. for the production of agricultural commodities.  These same items, as well as tree seedlings used in the growing of "plantation Christmas trees" are not, however, incorporated within this exclusion.  Plantation Christmas trees are defined as Christmas trees grown on land which has been prepared, cultivated, and managed for the exclusive purpose of growing Christmas trees.

Existing exclusions from the definition of "extractor" do not include persons harvesting plantation Christmas trees from their own land or from land which has been leased or rented by these individuals.  In addition, the business and occupation tax exemption applicable under RCW 82.04.330 to the production and sale at wholesale of agricultural commodities on land owned, rented or leased by the the producer does not extend to plantation Christmas tree growers.

SUMMARY:

The sale of seedlings for use in the production of plantation Christmas trees is excluded from the definition of "sale at retail" or "retail sale."  Persons falling, cutting, or taking plantation Christmas trees are excluded from the definition of "extractor" in RCW 82.04.100.  The production and sale at wholesale of plantation Christmas trees on land owned, rented or leased by the producer, to which some other right of possession pertains, is provided the same exemption from business and occupation tax liability as is granted to the production and sale of other agricultural commodities under RCW 82.04.330.

Revenue:    yes

Fiscal Note:      available

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

Senate Committee - Testified: Senator Stuart Halsan; Duane Kaiser, Plantation Christmas tree grower