S-701                 _______________________________________________

                                         SENATE JOINT RESOLUTION NO. 8205

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State of Washington                              50th Legislature                              1987 Regular Session

By Senators Rinehart, Patterson, Vognild, Conner and Wojahn

Read first time 1/19/87 and referred to Committee on Ways & Means.

The Senate and House of Representatives of the State of Washington resolve as follows:

          The Senate and House of Representatives of the State of Washington recognize that many Washington State citizens and businesses believe that the current state tax system is unfair to them.  Voters should be given the opportunity to choose between the current state tax system and a new state tax system.

          Accordingly, at the November 3, 1987, state-wide general election there shall be submitted to the qualified voters of the state for their approval or rejection an amendment to Article VII of the Constitution of the State of Washington by adding a new section to read as follows:

          "(1) The rate of the state general sales and use tax may not exceed four percent without the approval of the people by a majority vote at a state-wide November general election.

          (2) The rate of the local general sales and use tax may not exceed one and six-tenths percent without the approval of the people by a majority vote at the appropriate local November general election.

          (3) No state or local unit of government may impose a sales tax on food products for human consumption off premises.

          (4) Every rate for every category of the state business and occupation tax may not exceed sixty-five percent of the rate in effect on March 31, 1982, without the approval of the people by a majority vote at a state-wide November general election.

          (5) For property taxes payable in 1988 and every year thereafter, the state shall not levy a property tax.  The state shall not take any action to compel local government to increase property tax revenues.

          (6) The income tax for individuals must be at a single rate which may not exceed four percent without the approval of the people by a majority vote at a state-wide November general election.

The rate for the individual income tax shall also be the rate for the income tax for all other taxpayers except those subject to the corporate income tax.

          (7) The corporate income tax must be at a single rate which may not exceed twelve percent without the approval of the people by a majority vote at a state-wide November general election.

The election described in subsections (1), (3), (5), and (6) of this section shall be on a measure referred to the people by the legislature.

          (8) In order to maintain a balanced tax system, the ratios between the maximum constitutional rates for:  (a) The state general sales and use tax; (b) the state business and occupation tax; (c) the individual income tax; and (d) the corporate income tax must not be altered.  If the legislature proposes a change in the maximum constitutional rates to the voters, the proposed rates must not alter this ratio.  If the legislature adopts rates below the maximum constitutional rates, the lower rates must not alter this ratio.  However, this shall not prevent the legislature from rounding rates to the nearest tenth of a percent.

          (9) Income is not property within the meaning of this Article.

          (10) No state or local government may impose a business and occupation tax on the growing or producing for sale of any agricultural or horticultural produce or crop including products from animals, birds and insects.

          (11) No local unit of government may impose an income tax.

          For the purpose of coordination with the United States income tax laws, the legislature may adopt by reference United States statutes and regulations relating to income taxes including amendments to those statutes and regulations made after such adoption."

This constitutional amendment, if approved by the required number of voters at the November 3, 1987, general election, shall take effect when the legislature enacts an implementing statute or by February 1, 1988, whichever is earlier.

          The Senate and House of Representatives further resolve that the Secretary of State shall assure that notice of this proposed constitutional amendment to adopt a new tax  system is published at least four times during the four weeks preceding the election in every legal newspaper in the state.