SENATE BILL REPORT

ESB 5451

BYSenators Talmadge and Moore

Creating a sales and use tax exemption for certain donated clothing.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 27, 1989; March 1, 1989

Majority Report:  Do pass as amended.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bauer, Bluechel, Cantu, Fleming, Gaspard, Hayner, Johnson, Lee, Moore, Newhouse, Niemi, Owen, Saling, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Terry Wilson (786-7715)

                  February 9, 1990

AS PASSED SENATE, FEBRUARY 8, 1990

BACKGROUND:

Nonprofit corporations or associations that purchase clothing at the seller's cost for donation to the poor are presently subject to the retail sales tax (or use tax if applicable) on the purchase price of that clothing.

SUMMARY:

Sales of clothing are exempt from the retail sales or use tax if:  (1) the purchaser is a nonprofit corporation or association which is exempt from federal taxation under the Internal Revenue Code; (2) the clothing is purchased at the seller's cost; and (3) the clothing is purchased solely for donation to low-income persons.

Low-income persons receiving donated clothing from an organization exempt from tax are also exempt from tax on the clothing.

Appropriation:    none

Revenue:    yes

Fiscal Note:      available

Senate Committee - Testified: No one