SENATE BILL REPORT

SB 5964

BYSenators Hayner, Newhouse, Rasmussen, Nelson, Rinehart, Matson, McDonald, Bluechel, Talmadge, Cantu, Stratton, Sellar, Johnson, Bauer and Saling

Providing a use tax exemption for personal property donated to colleges and universities.

Senate Committee on Higher Education

Senate Hearing Date(s):February 27, 1989; February 28, 1989

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

      Signed by Senators Saling, Chairman; Bauer, Cantu, Smitherman, Stratton, von Reichbauer.

Senate Staff:Scott Huntley (786-7421)

                  February 28, 1989

Senate Committee on Ways & Means

Senate Hearing Date(s):March 6, 1989

Majority Report:  That Substitute Senate Bill No. 5964 be substituted therefor, and the substitute bill do pass.

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

Senate Staff:William Bafus (786-7715)

                  March 7, 1989

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 6, 1989

BACKGROUND:

Presently, state and independent institutions of higher education are liable for the use tax on personal property donated to the institutions by individuals or corporate entities.  It is maintained that subjecting the institutions to the use tax prevents them from accepting donations of personal property, especially high-quality equipment useful in advanced instruction.

SUMMARY:

The use tax shall not apply to personal property donated to state or independent institutions of higher education.

When personal property is accepted by an institution of higher education, the institution shall have the fair market value of the property assessed by a qualified, independent expert.  If the price of the property is listed in current catalogs an independent expert need not be used.  If requested by the Department of Revenue, the assessed fair market value of the property or the listed value will be reported by the donor.

SUMMARY OF PROPOSED HIGHER EDUCATION COMMITTEE AMENDMENT:

The definition of independent colleges and universities is clarified.

EFFECT OF PROPOSED SUBSTITUTE:

The amendment adopted by the Committee on Higher Education is incorporated into the bill.  It clarifies that, in order to be eligible for the exemption, an independent college or university must be an accredited, nonprofit institution offering baccalaureate or higher degree programs.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested February 22, 1989

Senate Committee - Testified: HIGHER EDUCATION:  Tom Parker, Washington Friends of Higher Education (for)

Senate Committee - Testified: WAYS & MEANS:  No one