SENATE BILL REPORT

SB 5847

BYSenators Barr, McCaslin, West, Newhouse, Lee and Owen

Providing a business and occupation tax deduction for amounts by political subdivisions to independent contractors who provide refuse collection services.

Senate Committee on Governmental Operations

Senate Hearing Date(s):February 23, 1989

Majority Report:  Do pass and be referred to Committee on Ways & Means.

      Signed by Senators McCaslin, Chairman; Pullen, Sutherland.

Senate Staff:Desley Brooks (786-7443); Eugene Green (786-7405)

                  February 23, 1989

AS REPORTED BY COMMITTEE ON GOVERNMENTAL OPERATIONS, FEBRUARY 23, 1989

BACKGROUND:

In 1985, the public works trust fund was created to finance improvements of infrastructure systems.  Revenues for the fund were generated by raising taxes.  For example, the measure imposed a new 3.6 percent refuse collection tax on consumers and shifted the state's public utility tax on garbage collection activities to a business and occupation tax. 

It has been suggested that due to an oversight in the tax measure, double B&O taxation can and does result in instances where municipal garbage collection services are contracted out to a private company.

SUMMARY:

Political subdivisions may deduct from their tax assessment amounts paid to independent contractors as compensation for providing refuse collection services.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested February 14, 1989

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

Senate Committee - Testified: Stan Finkelstein, Association of Washington Cities (pro); Jim Reinbold, City of Cheney (pro)