SB 6653



BYSenators Kreidler, Metcalf and Benitz



Clarifying provisions relating to excise taxation of core deposits.



Senate Committee on Environment & Natural Resources


     Senate Hearing Date(s):January 30, 1990


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

     Signed by Senators Metcalf, Chairman; Amondson, Vice Chairman; Barr, Benitz, DeJarnatt, Kreidler, Owen, Patterson, Sutherland.


     Senate Staff:Dawn P. Vyvyan (786-7717)

                February 1, 1990



Senate Committee on Ways & Means


     Senate Hearing Date(s):February 2, 1990;  February 6, 1990


Majority Report:     Do pass.

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


     Senate Staff:Bill Freund (786-7715)

                February 10, 1990



                  AS PASSED SENATE, FEBRUARY 9, 1990




Vehicle batteries are considered a solid waste, and as such, their disposal is regulated by the Solid Waste Management program.  At the time of sale of a battery, starter, brake, and other products which are used for recycling, reuse, or remanufacturing, a core deposit is paid by the consumer to the retailer.  This core deposit is refunded to the consumer upon the product's return to the retailer.


The core deposit is not considered to be part of the sales transaction, but part of a "flow through" deposit system in the distribution of the product from the manufacturer to the consumer.  The core deposit is an amount which is charged by the manufacturer to the distributor, by the distributor to the wholesaler, and then by the wholesaler to the retailer.  This amount is ultimately charged to the consumer at the time of sale. 


When the product is returned by the consumer to the retailer, the deposit is fully refunded to the consumer.  This refund works its way all the way back through the distribution line to the manufacturer.  The manufacturer is taxed on the reuse of the product when it is recycled or remanufactured.


The Governor vetoed the section of a 1989 bill which removed the business and occupation tax application on automotive parts core deposits.


A substantive amendment is being introduced to clarify that the core deposit paid by the consumer to the retailer is exempt from the gross proceeds of sales of the retailer or wholesaler for the purpose of taxation.




Core deposits are exempt from the business and occupation tax at the retail and wholesale level.


Appropriation:  none


Revenue:   yes


Fiscal Note:    available


Senate Committee - Testified:   ENVIRONMENT & NATURAL RESOURCES:  Jan Gee, Washington Retail Association (pro); Larry Stevens, Washington Automotive Wholesalers Association (pro)


Senate Committee - Testified:   WAYS & MEANS:  Jan Gee, Washington Retail Association (pro); Larry Stevens, Gary Nelson, Washington Automotive Wholesalers Association (pro)