SENATE BILL REPORT

SB 6542

BYSenators Newhouse, Moore, Bluechel, Deccio, Craswell, Stratton, Johnson, Saling, Zimmerman, Garrett, Hayner, Smitherman and Warnke

Reducing business and occupation tax rates for processors, disposers, and compactors of low-level radioactive waste.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 2, 1988

Senate Staff:Gary Benson (786-7715)

AS OF FEBRUARY 1, 1988

BACKGROUND:

The business and occupation (B&O) tax is imposed on the act or privilege of engaging in business activities in Washington.  The tax is measured by the application of various rates against a base consisting generally of gross receipts without any deductions or operating expenses.  The activity of disposing of low-level radioactive waste is subject to a B&O tax of 33 percent (a 30 percent base rate plus a 10 percent surtax).

The B&O tax rate on businesses disposing of low-level radioactive waste was raised from 1 percent to 30 percent effective August 1, 1982.  This was when Washington was one of only three states nation-wide accepting low-level radioactive waste for disposal.  Volumes buried in Washington state had sharply increased over the prior five years.

SUMMARY:

The B&O tax rate for disposing of low-level radioactive waste is reduced from 33 percent to 22 percent from January 1, 1988 through December 31, 1989.  The rate is reduced again to 11 percent in 1990 and 1991.  Thereafter, the tax rate is 5.5 percent.

The B&O tax rate for processing for disposal or compacting low- level radioactive waste is increased from 1.5 percent to 22 percent beginning January 1, 1988 through 1989.  In 1990 and 1991 the tax rate is 11 percent.  Thereafter, the rate is 5.5 percent.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested January 31, 1988

Effective Date:The bill contains an emergency clause and is effective for taxes payable beginning January 1, 1988.