SENATE BILL REPORT

SB 6561

BYSenators Saling, Gaspard, Bailey, Patterson, Deccio, Barr and Garrett

Exempting from use tax certain property acquired by institutions of higher education.

Senate Committee on Higher Education

Senate Hearing Date(s):February 2, 1988

Majority Report:  Do pass and refer to Ways & Means.

      Signed by Senators Saling, Chairman; Patterson, Vice Chairman; Anderson, Hansen, McMullen, Smitherman, von Reichbauer.

Senate Staff:Scott Huntley (786-7421)

                  February 2, 1988

Senate Committee on Ways & Means

Senate Hearing Date(s):February 4, 1988; February 5, 1988

Majority Report:  That Substitute Senate Bill No. 6561 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bauer, Cantu, Deccio, Fleming, Gaspard, Johnson, Lee, Moore, Newhouse, Saling, Talmadge, Vognild, Warnke, Williams, Wojahn, Zimmerman.

Senate Staff:William Bafus (786-7437)

                  February 5, 1988

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 5, 1988

BACKGROUND:

In the past there has been confusion over whether or not institutions of higher education are liable for the use tax on equipment which they receive through intergovernmental transfer or loan.  Some of the institutions have maintained records and paid the tax on this loaned equipment while others have not.  A memorandum written by the Attorney General's Office in 1979 originally raised questions about whether colleges and universities are liable for the use tax on such equipment.  It is argued that clarification is needed about the liability of institutions of higher education for the use tax on equipment which they receive through intergovernmental transfer or loan, and that the use of equipment received through such transfers and loans should be exempted from the use tax provisions.

SUMMARY:

An exemption from the use tax is provided to public and private institutions of higher education for equipment which is acquired through intergovernmental transfer or loan and is accepted by the institution for direct use in instruction or research.

EFFECT OF PROPOSED SUBSTITUTE:

Language is added clarifying that the equipment must be acquired by loan or other transfer without title passing to the education institution at any time.

Appropriation:    none

Revenue:    yes

Fiscal Note:      available

Senate Committee - Testified: HIGHER EDUCATION:  Reid Miller, Washington State University (for)

Senate Committee - Testified: WAYS & MEANS:  Bob Smith, WSU (for)