BP BHEAD INT S [atlas:bill]

AN ACT Relating to the business and occupation taxation of new and used motor vehicles; adding new sections to chapter 82.04 RCW; 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) This chapter does not apply to amounts derived from wholesale sales of used motor vehicles. For purposes of this subsection, "used motor vehicles" has the same meaning as ascribed to "used vehicle" in RCW 46.04.660.

(2) This chapter does not apply to the amount derived from a retail sale of a used vehicle as defined in RCW 46.04.660, that is purchased by the lessee of the vehicle at the conclusion of a lease agreement under an option to purchase provision in that agreement.

(3) This chapter does not apply to the amount derived by a new car dealer from wholesale sales to other new car dealers of new motor vehicles of the same make where the sales enable the dealers to adjust their inventory levels as long as the amount paid by the purchasing dealer does not exceed the amount paid by the selling dealer in the acquisition of the vehicle. However, the selling dealer may add reasonable expenses for the preparation of the vehicle for sale.

NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to read as follows:

(1) The legislature hereby acknowledges that out-of-state businesses doing business or transacting business in Washington are required to comply with this state's tax registration, reporting, and payment requirements, but recognizes that it may be administratively burdensome or difficult for out-of-state businesses to comply with these tax reporting and payment requirements. Especially where out-of-state businesses only make occasional sales in the state of Washington but are nevertheless subject to this state's taxing jurisdiction.

The legislature further acknowledges that out-of-state businesses that sell motor vehicles to Washington customers using agents, brokers, instate dealers, or other representatives to facilitate the sale by preparing the vehicles for delivery and/or delivering the vehicles to the buyers in this state have a physical presence or "nexus" in this state that requires the payment of the tax imposed by this chapter even where vehicles are delivered to the customers as a courtesy to out-of-state selling dealers.

The legislature therefore finds that out-of-state dealers are required to pay the tax imposed by this chapter because they have nexus in Washington and are doing business or transacting business in this state as described above. The legislature further finds that out-of-state businesses are also entitled to an easy, simple, and efficient method to account for and pay the tax imposed by this chapter on these sales, especially in situations where the out-of-state dealer makes only occasional sales to customers in the state of Washington. It is therefore the purpose and intent of the legislature to assist these out-of-state businesses in complying with Washington's tax registration, reporting, and payment requirements, by establishing an easy, simple, and efficient method of paying the tax imposed by this chapter.

(2) In the payment of the tax imposed by this chapter on new motor vehicles sold to Washington customers by out-of-state dealers that are delivered to the customer through "courtesy dealers" located in this state, the courtesy dealer may be designated as the agent for the out-of-state dealer in reporting and paying the tax imposed by this chapter. Upon such designation, it is the duty of each courtesy dealer to pay the tax imposed by this chapter to the department when the courtesy dealer files its tax return, except where the out-of-state dealer advises the courtesy dealer in writing that it will pay the tax directly to the department. Each courtesy dealer who acts as the agent for the out-of-state dealer in reporting, paying, and remitting the tax imposed by this chapter shall at the time of paying and remitting its own taxes imposed by this chapter pay the business and occupation tax due on the transaction under this section. The courtesy dealer is authorized to withhold payment to the out-of-state seller out of the proceeds of the sale, an amount equal to the tax imposed by this chapter.

(3) As used in this section, "motor vehicle" means all motor vehicles, trailers, and semitrailers used, or of a type designed primarily to be used, upon the public streets and highways, or the convenience or pleasure of the owner, or for the conveyance, for hire or otherwise, of persons or property, including fixed loads, facilities for human habitation, and vehicles carrying exempt licenses.

(4) As used in this section, "courtesy dealer" means a licensed instate automobile and/or motor vehicle dealer, licensed auction, buyer's agent, broker, or any other person authorized to prepare and deliver the motor vehicle to the customer in this state.

(5) Out-of-state dealers liable for the tax imposed under this section shall pay the tax on all sales made to Washington customers, provided a credit against the tax due under this section may be claimed in accordance with RCW 82.04.4451.

(6) This section shall be construed as cumulative of other methods prescribed in chapters 82.04 through 82.32 RCW, inclusive, for the collection of the tax imposed by this chapter. The department shall have power to adopt rules as may be necessary to administer this section.

NEW SECTION. Sec. 3. 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 takes effect July 1, 1999.