[atlas:bill]

AN ACT Relating to tax incentives to encourage telecommuting; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; and providing an effective date.

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) An employer is allowed a credit against tax due under this chapter for telecommuting expenditures. A credit claimed under this section may not exceed the amount of tax that would otherwise be due under this chapter. The credit must be claimed in the year in which the expenditure is made. The employer must make the expenditure the year in which the credit is approved by the department. Approved credit may not be carried over to subsequent calendar years. The credit must be claimed by the due date of the last tax return for the calendar year in which the expenditure is made. Any unused credit expires. A refund shall not be given in place of a credit. Total credits claimed by a person under this section and section 2 of this act may not exceed fifteen thousand dollars for any tax year. Expenditures made before the effective date of this section are not eligible for credit. If a person has used a credit approved under section 2 of this act against tax under chapter 82.16 RCW, that same credit cannot be used against tax under this chapter.

(2) Application for credits under this section shall be made before making a telecommuting expenditure. Applications shall be made to the department in a form and manner as required by the department. The department shall approve or deny applications for credits using the criteria under this subsection. The department shall keep a running total of all credits approved under this subsection during each calendar year, and shall deny any credit application that would cause the tabulation for any calendar year to exceed three million dollars. A person claiming a credit must keep records as necessary for the department to verify eligibility under this section, including records showing that an employee was regularly scheduled to telecommute from his or her home two or more days per week.

(3) The definitions in this subsection apply for the purposes of this section.

(a) "Telecommuting" means a work arrangement whereby employees are regularly scheduled two or more days per week to perform the normal duties and responsibilities of their positions at home, through use of computers or telecommunications. The term includes only work arrangements made by employers for employees and excludes persons who are self-employed.

(b) "Telecommuting equipment" means:

(i) Desktop computers, computer-related hardware, facsimile machines, modems, and similar data processing or telecommunication equipment used only at an employee's home for telecommuting purposes; and

(ii) Equipment installed at an employer's place of business that is used exclusively to provide remote voice access to telecommuting employees.

(c) "Telecommuting expenditures" means amounts spent, including sales or use taxes paid, to purchase telecommuting equipment or for telecommuting installation costs. The term includes only expenditures for equipment and services reasonably necessary to facilitate telecommuting.

(d) "Telecommuting installation costs" means one-time expenditures for installation of telecommunication access lines at an employee's home for the purpose of telecommuting.

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

An employer is allowed a credit against tax due under this chapter for telecommuting expenditures, as defined in section 1 of this act. A credit may be claimed under this section in the same manner as provided for credits under section 1 of this act. Credits under this section are subject to the same conditions and limitations as credits under section 1 of this act.

NEW SECTION. Sec. 3. This act takes effect October 1, 1999.