SENATE BILL REPORT

SSB 5293

BYSenate Committee on Ways & Means (originally sponsored by Senators McDermott, Bender, McDonald, Bluechel, Wojahn and Deccio)

Revising business and occupation taxation of health and social welfare services.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 3, 1987; February 10, 1987

Majority Report:  That Substitute Senate Bill No. 5293 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDermott, Chairman; Gaspard, Vice Chairman; Bauer, Bluechel, McDonald, Owen, Rasmussen, Saling, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7437)

                  March 18, 1987

AS PASSED SENATE, MARCH 17, 1987

BACKGROUND:

Qualifying organizations providing a range of health and social welfare services, as defined in RCW 82.04.431, are presently exempt from business and occupation tax liability on revenues received as compensation for or in support of the provision of these services from the United States government or an instrumentality thereof, from the State of Washington, or from any municipality or other political subdivision of the state.  Revenues received as fees or contributions from client served, i.e., private "co-payments," are, however, subject to this tax under the business and occupation tax code as it is presently applied.

SUMMARY:

Revenues received by qualifying health and social welfare organizations from clients as fees, as compensation for, or to support a designated group of such services are exempt from business and occupation tax liability.  These services include:  mental health, drug, or alcohol counseling; activities which are for the purpose of preventing or ameliorating juvenile delinquency or child abuse, including recreational activities for this purpose; or care of orphans or foster children.

Amounts received by qualifying health or social welfare organizations for the purpose of alleviating hunger are exempt from the business and occupation tax.  Amounts received by private individuals for providing adult family home services, individual provider program (chore program) services, and care of foster children would be exempt from the business and occupation tax.

Revenue:    yes

Fiscal Note:      available

Senate Committee - Testified: Ben Lindenkugel, United Way of King County; Pierre Brown, Sundown M Ranch; Linda Grant, Association of Alcoholism Programs in Washington State; Sharon Foster, Washington Mental Health Centers; Mike Tuttle, City of Seattle; Loren Arnett, Washington State Association of Churches