H-2787.1  _______________________________________________

                 HOUSE CONCURRENT RESOLUTION 4412

          _______________________________________________

State of Washington      54th Legislature     1995 Regular Session

By Representatives Boldt, Mulliken, Pennington, Carrell, Chandler, Elliot, Thompson, Sheldon, Benton, McMahan and L. Thomas

Read first time 04/23/95.  Referred to Committee on Finance.

Creating a joint select committee on business tax reform.

    WHEREAS, Washington is the only state to impose a business and occupation tax upon gross income as its primary business tax; and

    WHEREAS, The business and occupation tax is unrelated to a business's ability to pay; and

    WHEREAS, The business and occupation tax arbitrarily penalizes businesses with low-profit margins, such as new businesses, high turnover businesses, and small, nonvertically integrated businesses; and

    WHEREAS, The business and occupation tax results in double taxation by taxing full gross income at manufacturing, wholesaling, and retailing of a product; and

    WHEREAS, The business and occupation tax does not encourage economic development;

    NOW, THEREFORE, BE IT RESOLVED, By the House of Representatives of the state of Washington, the Senate concurring, That there is hereby created a joint select committee on business tax reform composed of twelve members, with six members of the senate, three from each of the two largest caucuses, to be appointed by the president of the senate; and six members of the house of representatives, three from each of the two largest caucuses, to be appointed by the speaker of the house of representatives.  The speaker of the house of representatives and the president of the senate shall designate cochairs of the committee.  The expenses of the committee members shall be paid by the legislature under chapter 44.04 RCW.  Staff support for the committee shall be provided by senate committee services and house of representatives office of program research as mutually agreed by the cochairs of the joint select committee.  The committee may also use the research services provided to the legislature by the department of revenue under RCW 82.01.060(4); and

    BE IT FURTHER RESOLVED, That the joint select committee on  business tax reform shall complete a thorough review of Washington's business tax system.  The committee shall examine alternatives to the current business and occupation tax and recommend changes that would increase the overall fairness of the state's business tax system and encourage economic development; and

    BE IT FURTHER RESOLVED, That the joint select committee on business tax reform shall submit its final report to the legislature by December 31, 1995.

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