SENATE BILL REPORT

SB 5946

BYSenators Williams and Saling

Changing provisions relating to county taxation of telephone access services.

Senate Committee on Energy & Utilities

Senate Hearing Date(s):February 24, 1987

Senate Staff:Deborah Senn (786-7450)

AS OF FEBRUARY 23, 1987

BACKGROUND:

In 1981 the Legislature passed a bill which gave Washington counties the authority to impose an excise tax on the use of telephone access lines up to $.50 per month.  The purpose of the excise tax was to fund the costs of 911 emergency services systems.  The tax was subject to a county referendum requiring a favorable vote of three-fifths.

Because of the increased use and reliance on PBX's by government agencies and corporations, the number of access lines upon which the tax can be levied has been reduced.  When a PBX is used, the number of access lines is based on the number of trunks connected between the PBX and the telephone company, not the number of telephones served by the PBX.  For example, a hospital may have a PBX with three trunks connecting it to the local exchange company.  It will pay the tax on the three trunks and not on all the individual phones used by the hospital.  The county agencies that administer 911 say that they are experiencing a shortfall in anticipated revenues because of this technological quirk in how access lines are defined.

SUMMARY:

The county proposal would amend the excise tax to be calculated as a 4 percent across-the-board tax on base rate or local exchange service.  If the imposition of the 4 percent tax would be greater than the $.50 flat rate charge, then the county must return for voter approval.  The net effect of the 4 percent would be as follows:  A little less on some residential customers; more on business customers, but less on business customers with PBX's than without.

Fiscal Note:      available