SENATE BILL REPORT

SB 6785

BYSenators Owen, Conner, Anderson, Johnson and DeJarnatt

Exempting certain commercial fishermen from the business and occupation tax.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 5, 1990

Senate Staff:Bill Freund (786-7715)

AS OF FEBRUARY 2, 1990

BACKGROUND:

Commercial fishermen are subject to the fish tax and the business and occupation (B&O) tax.  The fish tax is levied for funding enhancement of fisheries resources.  The tax liability is shared equally by commercial fishermen and the wholesalers to whom they sell their fish.

The B&O tax is levied for the privilege of engaging in business and is collected on gross income.  Commercial fishermen are subject to the extracting tax and the rate is .484 percent of gross income.  An exemption from tax is provided for businesses grossing less than $1000 per month.

Many commercial fishermen have been unaware of potential B&O tax liability and have not registered with the Department of Revenue.  In June 1989, the department issued a notice to commercial fishermen regarding B&O tax requirements.  In 1989 there were 6400 commercial fishermen.  Prior to June 1989, 310 were registered with the department.  Since then registrations have increased to 632.

SUMMARY:

Licensed commercial fishermen who are subject to the fish tax are exempt from B&O tax.

Appropriation:  none

Revenue:   yes

Fiscal Note:    available

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