SENATE BILL REPORT

SSB 6033

BYSenate Committee on Ways & Means (originally sponsored by Senators Newhouse, Hansen, Benitz and Deccio)

Exempting from business and occupation tax wholesale sales of hops for shipment out of state.

Senate Committee on Ways & Means

Senate Hearing Date(s):March 2, 1987; March 3, 1987

Majority Report:  That Substitute Senate Bill No. 6033 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDermott, Chairman; Bauer, Bluechel, Cantu, Craswell, Deccio, Fleming, Hayner, Lee, McDonald, Moore, Owen, Rasmussen, Saling, Talmadge, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7437)

                  April 18, 1987

AS PASSED SENATE, MARCH 19, 1987

BACKGROUND:

Under long standing Department of Revenue practice, Business and Occupation taxes were levied on hop brokers and dealers on the value of the warehousing services and the charges for processing hops sold out of state.  Recent changes in this practice now make such brokers or dealers subject to Business and Occupation taxes on wholesaling functions and on the full value of hops processed under the "manufacturing-other" rate.

SUMMARY:

Amounts received by growers or dealers for hops shipped out of state for first use are exempt from the Business and Occupation tax, whether or not these hops have been processed or warehoused in this state.  Amounts charged for warehousing services or processing services are not exempt from the tax.

Revenue:    yes

Fiscal Note:      available

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

Senate Committee - Testified: Senator Irving Newhouse; Gary Sanderson, Halvorson and Applegate; Paul Bergevin, S.S. Steiner, Inc.

HOUSE AMENDMENT:

Amounts received by hop brokers and dealers for hops sold for first use out of state are exempt from the business and occupation tax only if the hops have first been processed in this state.  Amounts received for raw hops are not exempt.