H-1818              _______________________________________________

                                                   HOUSE BILL NO. 2156

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Representatives Silver, Dellwo, Day, D. Sommers, Prince, Moyer, Smith, Kremen and Rector

Read first time 2/24/89 and referred to Committee on Revenue.

AN ACT Relating to nonprofit organizations; amending RCW 82.04.365; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 7, chapter 196, Laws of 1979 ex. sess. and RCW 82.04.365 are each amended to read as follows:

          (1)(a) This chapter does not apply to amounts derived by a nonprofit, religious, charitable, or benevolent organization as a result of conducting or participating in a ((bazaar or rummage sale if:

          (a) The organization does not conduct or participate in more than two bazaars or rummage sales per year; and

          (b) Each bazaar or rummage sale does not extend over a period of more than two days; and

          (c) The gross income received by each organization from each bazaar or rummage sale does not exceed one thousand dollars)) fund-raising activity.  Fund-raising activity includes, but is not limited to, rummage sales, bazaars, public auctions, recreational, athletic, and sporting exhibitions, street fairs, dances, and serving meals, unless the meals are served more frequently than once every two weeks.

(b) Revenue from fund-raising activities must be used for the nonprofit organization's lawful purpose in order to qualify for the exemption under this section.

          (2) For purposes of this section, "nonprofit organization" means an organization that meets all of the following criteria:

          (a) The members, stockholders, officers, directors, or trustees of the organization do not receive any part of the organization's gross income, except as payment for services rendered;

          (b) The compensation received by any person for services rendered to the organization does not exceed an amount reasonable under the circumstances; and

          (c) The activities of the organization do not include a substantial amount of political activity, including but not limited to influencing legislation and participation in any campaign on behalf of any candidate for political office.

(3) Fund-raising activities, to qualify for the exemption under this section, may not be conducted by independent fund raisers, independent fund-raising entities, or nonprofit fund raisers.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.08 RCW to read as follows:

          The tax levied by RCW 82.08.020 shall not apply to fund-raising activities that qualify for an exemption under RCW 82.04.365 or to the purchase of materials and supplies related to such fund-raising activities.

NEW SECTION. Sec. 3.  A new section is added to chapter 82.12 RCW to read as follows:

          The provisions of this chapter shall not apply with respect to the use of materials and supplies related to fund-raising activities that are entitled to an exemption under section 2 of this act.

NEW SECTION. Sec. 4.     Persons and entities qualifying for exemptions under RCW 82.04.365 and sections 2 and 3 of this act shall not be liable for taxes due and payable, but not already paid, prior to the effective date of this act.  Refunds shall not be granted for taxes already paid.

NEW SECTION. Sec. 5.     This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.