SENATE BILL REPORT

SB 6033

BYSenators 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)

                  March 4, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 3, 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:      requested

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

EFFECT OF PROPOSED SUBSTITUTE:

A section applying the provisions of this bill retrospectively is removed.

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