AN
ACT Relating to consolidating business and occupation tax rates into fewer
categories; amending RCW 48.14.080, 82.04.240, 82.04.250, 82.04.260, 82.04.270,
82.04.290, and 82.04.440; adding new sections to chapter 82.04 RCW; creating a
new section; and providing an effective date.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
48.14.080 and 1993 sp.s. c 25 s 602 are each amended to read as follows:
As
to insurers, other than title insurers and taxpayers under RCW 48.14.0201, the
taxes imposed by this title shall be in lieu of all other taxes, except taxes
on real and tangible personal property, excise taxes on the sale, purchase or
use of such property, and the tax imposed in RCW 82.04.260(((15))) (12).
NEW
SECTION. Sec. 2. A
new section is added to chapter 82.04 RCW to read as follows:
This
chapter does not apply to amounts received from buying wheat, oats, dry peas, dry
beans, lentils, triticale, canola, corn, rye, and barley, but not including any
manufactured products thereof, and selling the same at wholesale.
Sec.
3. RCW
82.04.240 and 1993 sp.s. c 25 s 102 are each amended to read as follows:
Upon
every person except persons taxable under RCW 82.04.260 (1), (2), (((3),))
(4), (5), (((7), (8), or (9))) or (6) 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 0.484 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.
4. RCW
82.04.250 and 1993 sp.s. c 25 s 103 are each amended to read as follows:
(1)
Upon every person except persons taxable under RCW 82.04.260(((8))) (5)
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 0.471 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 0.484 percent.
Sec.
5. RCW
82.04.260 and 1998 c . . . s 3 (section 3 of Z‑1031.7/98)
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, canola, corn, rye and
barley, but not including any manufactured 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 0.011 percent.
(2))) Upon
every person engaging within this state in the business of manufacturing:
(a)
Wheat into flour, barley into pearl barley, soybeans into soybean oil,
canola into canola oil, canola meal, or canola byproducts, 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, oil, canola
meal, or canola byproduct manufactured, multiplied by the rate of 0.138 percent;
(b)
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 0.138 percent; and
(c)
By canning, preserving, freezing, processing, or dehydrating fresh fruits and
vegetables, or selling at wholesale fresh fruits and vegetables canned,
preserved, frozen, processed, or dehydrated by the seller and sold to
purchasers who transport in the ordinary course of business the goods out of
this state; 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,
processed, or dehydrated multiplied by the rate of 0.138 percent. As proof of
sale to a person who transports in the ordinary course of business goods out of
this state, the seller shall annually provide a statement in a form prescribed
by the department and retain the statement as a business record.
(((3)))
(2) 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 ((0.275)) 0.138 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 0.138 percent.
(5)
Upon every person engaging within this state in the business of manufacturing
by canning, preserving, freezing, processing, or dehydrating fresh fruits and
vegetables, or selling at wholesale fresh fruits and vegetables canned,
preserved, frozen, processed, or dehydrated by the seller and sold to
purchasers who transport in the ordinary course of business the goods out of
this state; 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,
processed, or dehydrated multiplied by the rate of 0.33 percent. As proof of
sale to a person who transports in the ordinary course of business goods out of
this state, the seller shall annually provide a statement in a form prescribed
by the department and retain the statement as a business record.
(6))) (3)
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 0.484 percent.
(((7)))
(4) 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 0.138 percent.
(((8)))
(5) 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 0.275 percent.
(((9)))
(6) 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 0.275 percent.
(((10)))
(7) Upon every person engaging within this state in the business of
acting as a travel agent or tour operator; 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 0.275 percent.
(((11)))
(8) 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 ((0.363))
0.275 percent.
(((12)))
(9) 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 ((0.363))
0.275 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)))
(10) 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 3.3 percent.
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)))
(11) 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
((0.55)) 0.484 percent.
(((15)))
(12) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a nonprofit
corporation or by the state or any of its political subdivisions, as to such
persons, the amount of tax with respect to such activities shall be equal to
the gross income of the business multiplied by the rate of 0.75 percent through
June 30, 1995, and 1.5 percent thereafter. The moneys collected under this
subsection shall be deposited in the health services account created under RCW
43.72.900.
Sec.
6. RCW
82.04.270 and 1994 c 124 s 2 are each amended to read as follows:
(1)
Upon every person except persons taxable under ((subsections (1) or (8) of))
RCW 82.04.260(5) or section 2 of this act 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 0.484 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. 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 0.484 percent of the value of the article so
distributed as of the time of such distribution. 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. Delivery trucks or
vans will not under the purposes of this section be considered to be retail
stores or outlets.
NEW
SECTION. Sec. 7. A
new section is added to chapter 82.04 RCW to read as follows:
Upon
every person engaging within this state in the business of providing child care
for periods of less than twenty-four hours; as to such persons the amount of
tax with respect to such business shall be equal to the gross proceeds derived
from such sales multiplied by the rate of 0.484 percent.
Sec.
8. RCW
82.04.290 and 1997 c 7 s 2 are each amended to read as follows:
(1)
Upon every person engaging within this state in the business of providing
international investment management services, as to such persons, the amount of
tax with respect to such business shall be equal to the gross income or gross
proceeds of sales of the business multiplied by a rate of 0.275 percent.
(2)
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, section 7 of this act, and 82.04.280,
and subsection (1) of this section; 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 1.5 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.
9. RCW
82.04.440 and 1994 c 124 s 4 are each amended to read as follows:
(1)
Every person engaged in activities which are within the purview of the
provisions of two or more of sections RCW 82.04.230 to 82.04.290, inclusive,
shall be taxable under each paragraph applicable to the activities engaged in.
(2)
Persons taxable under RCW 82.04.250, 82.04.270, or 82.04.260(((7))) (4)
with respect to selling products in this state shall be allowed a credit
against those taxes for any (a) manufacturing taxes paid with respect to the
manufacturing of products so sold in this state, and/or (b) extracting taxes
paid with respect to the extracting of products so sold in this state or
ingredients of products so sold in this state. Extracting taxes taken as
credit under subsection (3) of this section may also be taken under this
subsection, if otherwise allowable under this subsection. The amount of the
credit shall not exceed the tax liability arising under this chapter with
respect to the sale of those products.
(3)
Persons taxable under RCW 82.04.240 or 82.04.260 ((subsection (4))) (1)(b)
shall be allowed a credit against those taxes for any extracting taxes paid
with respect to extracting the ingredients of the products so manufactured in
this state. The amount of the credit shall not exceed the tax liability
arising under this chapter with respect to the manufacturing of those products.
(4)
Persons taxable under RCW 82.04.230, 82.04.240, or ((subsection (2), (3),
(4), (5), or (7) of)) RCW 82.04.260 (1), (2), (4), or (6) with
respect to extracting or manufacturing products in this state shall be allowed
a credit against those taxes for any (i) gross receipts taxes paid to another
state with respect to the sales of the products so extracted or manufactured in
this state, (ii) manufacturing taxes paid with respect to the manufacturing of
products using ingredients so extracted in this state, or (iii) manufacturing
taxes paid with respect to manufacturing activities completed in another state
for products so manufactured in this state. The amount of the credit shall not
exceed the tax liability arising under this chapter with respect to the
extraction or manufacturing of those products.
(5)
For the purpose of this section:
(a)
"Gross receipts tax" means a tax:
(i)
Which is imposed on or measured by the gross volume of business, in terms of gross
receipts or in other terms, and in the determination of which the deductions
allowed would not constitute the tax an income tax or value added tax; and
(ii)
Which is also not, pursuant to law or custom, separately stated from the sales
price.
(b)
"State" means (i) the state of Washington, (ii) a state of the United
States other than Washington, or any political subdivision of such other state,
(iii) the District of Columbia, and (iv) any foreign country or political
subdivision thereof.
(c)
"Manufacturing tax" means a gross receipts tax imposed on the act or
privilege of engaging in business as a manufacturer, and includes (i) the taxes
imposed in RCW 82.04.240 and ((subsections (2), (3), (4), (5), and (7) of))
RCW 82.04.260 (1), (2), and (4), and (ii) similar gross receipts taxes
paid to other states.
(d)
"Extracting tax" means a gross receipts tax imposed on the act or
privilege of engaging in business as an extractor, and includes the tax imposed
in RCW 82.04.230 and similar gross receipts taxes paid to other states.
(e)
"Business", "manufacturer", "extractor", and
other terms used in this section have the meanings given in RCW 82.04.020
through 82.04.212, notwithstanding the use of those terms in the context of
describing taxes imposed by other states.
NEW
SECTION. Sec. 10. This
act does not affect any existing right acquired or liability or obligation
incurred under the sections amended or repealed in this act or under any rule
or order adopted under those sections, nor does it affect any proceeding
instituted under those sections.
NEW
SECTION. Sec. 11. This
act takes effect July 1, 1998.
