BP BHEAD INT H

AN ACT Relating to gross receipts tax rates and deductions; amending RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, 82.04.280, 82.04.290, 82.16.020, 82.02.030, 82.32.030, and 70.95E.020; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; repealing RCW 82.04.2901, 82.04.2904, 82.04.300, and 82.16.040; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:

(1) As used in this section:

(a) "Combined measure of tax" means the total of the value of products, gross proceeds of sales, and gross income of the business for all activities upon which business and occupation taxes are imposed under this chapter.

(b) "Threshold amount" means:

(i) Twelve thousand dollars for taxpayers for whom at least eighty percent of the combined measure of tax for the reporting period is attributable to the business of making sales at retail.

(ii) Four thousand dollars for sole proprietors for whom at least eighty percent of the combined measure of tax for the reporting period is attributable to the business of rendering any type of service that does not constitute a sale at retail.

(iii) Seven thousand dollars for all other taxpayers.

(2) In computing the tax imposed under this chapter, there may be deducted from the combined measure of tax an amount equal to the product of the threshold amount multiplied by the number of months in the reporting period, as determined under RCW 82.32.045, reduced by the amount computed under subsection (3) of this section.

(3) For each taxpayer the amount under subsection (2) of this section shall be reduced, but not below zero, by the amount by which the combined measure of tax for a reporting period exceeds the product of the threshold amount multiplied by the number of months in the reporting period.

(4) If a taxpayer engages in more than one business activity only a single deduction using a single threshold amount applied against the combined measures of tax is allowed under this section. The taxpayer may specify how the deduction is to be divided among the measures of tax.

(5) Any person claiming a deduction under the provisions of this section may be required to file returns even though no tax may be due.

NEW SECTION. Sec. 2. A new section is added to chapter 82.16 RCW to read as follows:

(1) In computing the tax imposed under this chapter, there may be deducted from the gross income of the business an amount equal to seven thousand dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045, reduced by the amount computed under subsection (2) of this section.

(2) For each taxpayer the amount under subsection (1) of this section shall be reduced, but not below zero, by the amount by which the measure of tax for a reporting period exceeds the product of the threshold amount multiplied by the number of months in the reporting period.

(3) If a person engages in more than one business activity only a single deduction computed based on the combined measures of tax is allowed by this section.

(4) Any person claiming a deduction or deductions under the provisions of this section may be required to file returns even though no tax may be due.

Sec. 3. RCW 82.04.230 and 1971 ex.s. c 281 s 2 are each amended to read as follows:

Upon every person engaging within this state in business as an extractor; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, extracted for sale or for commercial or industrial use, multiplied by the rate of ((~~forty-four one-hundredths~~)) one-half of one percent;

The measure of the tax is the value of the products, including byproducts, so extracted, regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 4. RCW 82.04.240 and 1981 c 172 s 1 are each amended to read as follows:

Upon every person except persons taxable under subsections (2), (3), (4), (5), (7), (8), or (9) of RCW 82.04.260 engaging within this state in business as a manufacturer; as to such persons the amount of the tax with respect to such business shall be equal to the value of the products, including byproducts, manufactured, multiplied by the rate of ((~~forty-four one-hundredths~~)) one-half of one percent.

The measure of the tax is the value of the products, including byproducts, so manufactured regardless of the place of sale or the fact that deliveries may be made to points outside the state.

Sec. 5. RCW 82.04.250 and 1981 c 172 s 2 are each amended to read as follows:

(1) Upon every person except persons taxable under RCW 82.04.260(8) or subsection (2) of this section engaging within this state in the business of making sales at retail, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of ((~~forty-four one-hundredths~~)) four hundred eighty-six one-thousandths of one percent.

(2) Upon every person engaging within this state in the business of making sales at retail that are exempt from the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 82.08.0263, as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the business, multiplied by the rate of one-half of one percent.

Sec. 6. RCW 82.04.255 and 1985 c 32 s 2 are each amended to read as follows:

Upon every person engaging within the state as a real estate broker; as to such persons, the amount of the tax with respect to such business shall be equal to the gross income of the business, multiplied by the rate of ((~~1.50~~)) one and fifty-five one-hundredths percent.

The measure of the tax on real estate commissions earned by the real estate broker shall be the gross commission earned by the particular real estate brokerage office including that portion of the commission paid to salesmen or associate brokers in the same office on a particular transaction: PROVIDED, HOWEVER, That where a real estate commission is divided between an originating brokerage office and a cooperating brokerage office on a particular transaction, each brokerage office shall pay the tax only upon their respective shares of said commission: AND PROVIDED FURTHER, That where the brokerage office has paid the tax as provided herein, salesmen or associate brokers within the same brokerage office shall not be required to pay a similar tax upon the same transaction.

Sec. 7. RCW 82.04.260 and 1991 c 272 s 15 are each amended to read as follows:

(1) Upon every person engaging within this state in the business of buying wheat, oats, dry peas, dry beans, lentils, triticale, corn, rye and barley, but not including any manufactured or processed products thereof, and selling the same at wholesale; the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of ((~~one one-hundredth~~)) eleven one-thousandths of one percent.

(2) Upon every person engaging within this state in the business of manufacturing wheat into flour, barley into pearl barley, soybeans into soybean oil, or sunflower seeds into sunflower oil; as to such persons the amount of tax with respect to such business shall be equal to the value of the flour, pearl barley, or oil manufactured, multiplied by the rate of ((~~one-eighth~~)) one hundred forty-two one-thousandths of one percent.

(3) Upon every person engaging within this state in the business of splitting or processing dried peas; as to such persons the amount of tax with respect to such business shall be equal to the value of the peas split or processed, multiplied by the rate of ((~~one-quarter~~)) two hundred eighty-four one-thousandths of one percent.

(4) Upon every person engaging within this state in the business of manufacturing seafood products which remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing by that person; as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured, multiplied by the rate of ((~~one-eighth~~)) one hundred forty-two one-thousandths of one percent.

(5) Upon every person engaging within this state in the business of manufacturing by canning, preserving, freezing or dehydrating fresh fruits and vegetables; as to such persons the amount of tax with respect to such business shall be equal to the value of the products canned, preserved, frozen or dehydrated multiplied by the rate of ((~~three-tenths~~)) three hundred forty-one one-thousandths of one percent.

(6) Upon every nonprofit corporation and nonprofit association engaging within this state in research and development, as to such corporations and associations, the amount of tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~forty-four one-hundredths~~)) one-half of one percent.

(7) Upon every person engaging within this state in the business of slaughtering, breaking and/or processing perishable meat products and/or selling the same at wholesale only and not at retail; as to such persons the tax imposed shall be equal to the gross proceeds derived from such sales multiplied by the rate of ((~~twenty-five one-hundredths of one percent through June 30, 1986, and one-eighth~~)) two hundred eighty-four one-thousandths of one percent thereafter.

(8) Upon every person engaging within this state in the business of making sales, at retail or wholesale, of nuclear fuel assemblies manufactured by that person, as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of the assemblies multiplied by the rate of ((~~twenty-five one-hundredths~~)) two hundred eighty-four one-thousandths of one percent.

(9) Upon every person engaging within this state in the business of manufacturing nuclear fuel assemblies, as to such persons the amount of tax with respect to such business shall be equal to the value of the products manufactured multiplied by the rate of ((~~twenty-five one-hundredths~~)) two hundred eighty-four one-thousandths of one percent.

(10) Upon every person engaging within this state in the business of acting as a travel agent; as to such persons the amount of the tax with respect to such activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~twenty-five one-hundredths~~)) two hundred eighty-four one-thousandths of one percent.

(11) Upon every person engaging within this state in business as an international steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent; as to such persons the amount of the tax with respect to only international activities shall be equal to the gross income derived from such activities multiplied by the rate of ((~~thirty-three one-hundredths~~)) three hundred seventy-five one-thousandths of one percent.

(12) Upon every person engaging within this state in the business of stevedoring and associated activities pertinent to the movement of goods and commodities in waterborne interstate or foreign commerce; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds derived from such activities multiplied by the rate of ((~~thirty-three one hundredths~~)) three hundred seventy-five one-thousandths of one percent. Persons subject to taxation under this subsection shall be exempt from payment of taxes imposed by chapter 82.16 RCW for that portion of their business subject to taxation under this subsection. Stevedoring and associated activities pertinent to the conduct of goods and commodities in waterborne interstate or foreign commerce are defined as all activities of a labor, service or transportation nature whereby cargo may be loaded or unloaded to or from vessels or barges, passing over, onto or under a wharf, pier, or similar structure; cargo may be moved to a warehouse or similar holding or storage yard or area to await further movement in import or export or may move to a consolidation freight station and be stuffed, unstuffed, containerized, separated or otherwise segregated or aggregated for delivery or loaded on any mode of transportation for delivery to its consignee. Specific activities included in this definition are: Wharfage, handling, loading, unloading, moving of cargo to a convenient place of delivery to the consignee or a convenient place for further movement to export mode; documentation services in connection with the receipt, delivery, checking, care, custody and control of cargo required in the transfer of cargo; imported automobile handling prior to delivery to consignee; terminal stevedoring and incidental vessel services, including but not limited to plugging and unplugging refrigerator service to containers, trailers, and other refrigerated cargo receptacles, and securing ship hatch covers.

(13) Upon every person engaging within this state in the business of disposing of low-level waste, as defined in RCW 43.145.010; as to such persons the amount of the tax with respect to such business shall be equal to the gross income of the business, excluding any fees imposed under chapter 43.200 RCW, multiplied by the rate of ((~~fifteen percent.~~

~~(a) The rate specified in this subsection shall be reduced to ten percent on May 20, 1991.~~

~~(b) The rate specified in this subsection shall be further reduced to five percent on January 1, 1992.~~

~~(c) The rate specified in this subsection shall be further reduced to~~)) three and four hundred and nine one-thousandths percent on July 1, 1993.

If the gross income of the taxpayer is attributable to activities both within and without this state, the gross income attributable to this state shall be determined in accordance with the methods of apportionment required under RCW 82.04.460.

(14) Upon every person engaging within this state as an insurance agent, insurance broker, or insurance solicitor licensed under chapter 48.17 RCW; as to such persons, the amount of the tax with respect to such licensed activities shall be equal to the gross income of such business multiplied by the rate of one and one hundred thirty-six one-thousandths percent.

Sec. 8. RCW 82.04.270 and 1981 c 172 s 4 are each amended to read as follows:

(1) Upon every person except persons taxable under subsections (1) or (8) of RCW 82.04.260 engaging within this state in the business of making sales at wholesale; as to such persons the amount of tax with respect to such business shall be equal to the gross proceeds of sales of such business multiplied by the rate of ((~~forty-four one-hundredths~~)) one-half of one percent.

(2) The tax imposed by this section is levied and shall be collected from every person engaged in the business of distributing in this state articles of tangible personal property, owned by them from their own warehouse or other central location in this state to two or more of their own retail stores or outlets, where no change of title or ownership occurs, the intent hereof being to impose a tax equal to the wholesaler's tax upon persons performing functions essentially comparable to those of a wholesaler, but not actually making sales: PROVIDED, That the tax designated in this section may not be assessed twice to the same person for the same article. The amount of the tax as to such persons shall be computed by multiplying ((~~forty-four one-hundredths~~)) one-half of one percent of the value of the article so distributed as of the time of such distribution: PROVIDED, That persons engaged in the activities described in this subsection shall not be liable for the tax imposed if by proper invoice it can be shown that they have purchased such property from a wholesaler who has paid a business and occupation tax to the state upon the same articles. This proviso shall not apply to purchases from manufacturers as defined in RCW 82.04.110. The department of revenue shall prescribe uniform and equitable rules for the purpose of ascertaining such value, which value shall correspond as nearly as possible to the gross proceeds from sales at wholesale in this state of similar articles of like quality and character, and in similar quantities by other taxpayers: PROVIDED FURTHER, That delivery trucks or vans will not under the purposes of this section be considered to be retail stores or outlets.

Sec. 9. RCW 82.04.280 and 1986 c 226 s 2 are each amended to read as follows:

Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals or magazines; (2) building, repairing or improving any street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle which is owned by a municipal corporation or political subdivision of the state or by the United States and which is used or to be used, primarily for foot or vehicular traffic including mass transportation vehicles of any kind and including any readjustment, reconstruction or relocation of the facilities of any public, private or cooperatively owned utility or railroad in the course of such building, repairing or improving, the cost of which readjustment, reconstruction, or relocation, is the responsibility of the public authority whose street, place, road, highway, easement, right of way, mass public transportation terminal or parking facility, bridge, tunnel, or trestle is being built, repaired or improved; (3) extracting for hire or processing for hire; (4) operating a cold storage warehouse or storage warehouse, but not including the rental of cold storage lockers; (5) representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions of RCW 48.05.310; (6) radio and television broadcasting, excluding network, national and regional advertising computed as a standard deduction based on the national average thereof as annually reported by the Federal Communications Commission, or in lieu thereof by itemization by the individual broadcasting station, and excluding that portion of revenue represented by the out-of-state audience computed as a ratio to the station's total audience as measured by the 100 micro-volt signal strength and delivery by wire, if any; (7) engaging in activities which bring a person within the definition of consumer contained in RCW 82.04.190(6), as now or hereafter amended; as to such persons, the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of ((~~forty-four one hundredths~~)) one-half of one percent.

As used in this section, "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.

As used in this section, "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance.

Sec. 10. RCW 82.04.290 and 1985 c 32 s 3 are each amended to read as follows:

Upon every person engaging within this state in any business activity other than or in addition to those enumerated in RCW 82.04.230, 82.04.240, 82.04.250, 82.04.255, 82.04.260, 82.04.270, and 82.04.280; as to such persons the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of ((~~1.50~~)) one and fifty-five one-hundredths percent. This section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his principal or supplier to be used for informational, educational and promotional purposes shall not be considered a part of the agent's remuneration or commission and shall not be subject to taxation under this section.

Sec. 11. RCW 82.16.020 and 1989 c 302 s 204 are each amended to read as follows:

(1) There is levied and there shall be collected from every person a tax for the act or privilege of engaging within this state in any one or more of the businesses herein mentioned. The tax shall be equal to the gross income of the business, multiplied by the rate set out after the business, as follows:

(a) Railroad, express, railroad car, sewerage collection, and telegraph businesses: Three and ((~~six-tenths~~)) nine hundred seventy-nine one-thousandths percent;

(b) Light and power business: Three and ((~~sixty-two one-hundredths~~)) four percent;

(d) Urban transportation business: ((~~Six-tenths~~)) six hundred sixty-three one-thousandths of one percent;

(e) Vessels under sixty-five feet in length, except tugboats, operating upon the waters within the state: ((~~Six-tenths~~)) six hundred sixty-three one-thousandths of one percent;

(f) Motor transportation and tugboat businesses, and all public service businesses other than ones mentioned above: One and ((~~eight-tenths~~)) ninety-nine one-hundredths of one percent;

(g) Water distribution business: ((~~Four and seven-tenths~~)) Five and one hundred ninety-five one-thousandths percent.

(2) ((~~An additional tax is imposed equal to the rate specified in RCW 82.02.030 multiplied by the tax payable under subsection (1) of this section.~~

~~(3) Twenty~~)) Nineteen and four-tenths percent of the moneys collected under subsection (1) of this section on water distribution businesses and ((~~sixty~~)) fifty-eight and one-tenth percent of the moneys collected under subsection (1) of this section on sewerage collection businesses shall be deposited in the public works assistance account created in RCW 43.155.050.

Sec. 12. RCW 82.02.030 and 1990 c 42 s 319 are each amended to read as follows:

(1) The rate of the additional taxes under RCW 54.28.020(2), 54.28.025(2), 66.24.210(2), 66.24.290(2), ((~~82.04.2901, 82.16.020(2),~~)) 82.26.020(2), 82.27.020(5), and 82.29A.030(2) shall be seven percent; and

(2) The rate of the additional taxes under RCW 82.08.150(4) shall be fourteen percent.

Sec. 13. RCW 82.32.030 and 1992 c 206 s 8 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, if any person engages in any business or performs any act upon which a tax is imposed by the preceding chapters, he or she shall, under such rules as the department of revenue shall prescribe, apply for and obtain from the department a registration certificate upon payment of fifteen dollars. Such registration certificate shall be personal and nontransferable and shall be valid as long as the taxpayer continues in business and pays the tax accrued to the state. In case business is transacted at two or more separate places by one taxpayer, a separate registration certificate for each place at which business is transacted with the public shall be required, but, for such additional certificates no additional payment shall be required. Each certificate shall be numbered and shall show the name, residence, and place and character of business of the taxpayer and such other information as the department of revenue deems necessary and shall be posted in a conspicuous place at the place of business for which it is issued. Where a place of business of the taxpayer is changed, the taxpayer must return to the department the existing certificate, and a new certificate will be issued for the new place of business free of charge. No person required to be registered under this section shall engage in any business taxable hereunder without first being so registered. The department, by rule, may provide for the issuance of certificates of registration, without requiring payment, to temporary places of business or to persons who are completely exempt from tax under ((~~RCW 82.04.300~~)) section 1 of this act.

(2) Registration under this section is not required if the following conditions are met:

(a) A person's value of products, gross proceeds of sales, or gross income of the business is ((~~below the tax reporting threshold provided in RCW 82.04.300~~)) less than or equal to the deduction allowed under section 1 of this act;

(b) The person is not required to collect or pay to the department of revenue any other tax which the department is authorized to collect; and

(c) The person is not otherwise required to obtain a license subject to the master application procedure provided in chapter 19.02 RCW.

Sec. 14. RCW 70.95E.020 and 1990 c 114 s 12 are each amended to read as follows:

A fee is imposed for the privilege of generating or potentially generating hazardous waste in the state. The annual amount of the fee shall be thirty-five dollars upon every known generator or potential generator doing business in Washington in the current calendar year or any part thereof. This fee shall be collected by the department of revenue. A potential generator shall be exempt from the fee imposed under this section if the potential generator is ((~~entitled to the exemption in RCW 82.04.300~~)) completely exempt from tax under section 1 of this act in the current calendar year. The department shall, subject to appropriation, use the funds collected from the fees assessed in this subsection to support the activities of the office of waste reduction as specified in RCW 70.95C.030. The fee imposed pursuant to this section shall be first due on July 31, 1990, for any generator or potential generator operating in Washington from March 21, 1990, to December 31, 1990, or any part thereof.

NEW SECTION. Sec. 15. The following acts or parts of acts are each repealed:

(1) RCW 82.04.2901 and 1985 c 32 s 4;

(2) RCW 82.04.2904 and 1985 c 32 s 5, 1983 2nd ex.s. c 3 s 3, & 1983 c 9 s 3;

(3) RCW 82.04.300 and 1983 c 3 s 213, 1979 ex.s. c 196 s 4, 1975 1st ex.s. c 278 s 41, 1961 c 293 s 3, & 1961 c 15 s 82.04.300; and

(4) RCW 82.16.040 and 1961 c 15 s 82.16.040.

NEW SECTION. Sec. 16. 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 July 1, 1993.