SENATE BILL REPORT

SB 5169

BYSenators Hansen, Barr, Gaspard, Bauer, Anderson, Bailey, Warnke, Patterson and von Reichbauer

Lowering the business and occupation tax rate on the manufacture of barley into pearl barley.

Senate Committee on Agriculture

Senate Hearing Date(s):January 20, 1987

Majority Report:  Do pass.

      Signed by Senators Hansen, Chairman; Bauer, Vice Chairman; Anderson, Bailey, Barr, Gaspard.

Senate Staff:Kaleen Cottingham (786-7415)

                  February 2, 1987

AS PASSED SENATE, FEBRUARY 2, 1987

BACKGROUND:

The pearling of barley is a process which grinds the hull off each grain of barley.  It is a process similar to milling of wheat into flour.

A recent audit by the Department of Revenue determined that the pearling of barley was taxable not at the previous rate established for the wholesaling of barley, but rather taxable at the rate set for other miscellaneous manufacturing.

The Legislature has established specific tax rates for other agricultural processes such as the manufacturing of wheat into flour, soybeans into soybean oil and peas in split peas.  This tax rate is lower than the rate set for "manufacturing--other," i.e., milling flour is taxed at the rate of one-eighth of 1 percent, whereas the "other" category is taxed at the rate of forty-four one hundredths of 1 percent.

SUMMARY:

The process of manufacturing barley into pearl barley shall be taxed at the same rate as the manufacture of wheat into flour.

Fiscal Note:      requested

Senate Committee - Testified: Joe Hulett, Wallace Grain and Pea Co.; Mike Schwisow, Department of Agriculture; Ron Rosenbloom, Department of Revenue