1361 AMS SHED RDM 018

1361 AMS SHED RDM 018

HB 1361 - S AMD 281

By Senators T. Sheldon, Rossi and Shin

WITHDRAWN 04/12/01

On page 17, after line 18, insert the following:

"Sec. 18. RCW 82.04.4281 and 1980 c 37 s 2 are each amended to read as follows:

(1) In computing tax there may be deducted from the measure of tax:

(a) Amounts derived ((~~by persons, other than those engaging in banking, loan, security, or other financial businesses,~~)) from investments or the use of money ((~~as such, and also~~)); and

(b) Amounts derived as dividends by a parent from its subsidiary corporations.

(2) The following persons are not entitled to the deduction provided in subsection (1)(a) of this section:

(a) Persons who engage in business as a banking, loan, or other financial institution chartered under:

(i) Title 30, 31, 32, or 33 RCW;

(ii) The national bank act, as amended; or

(iii) The homeowners loan act, as amended;

(b) A holding company of any person described in (a) of this subsection that is subject to:

(i) The bank holding company act, as amended; or

(ii) The homeowners loan act, as amended;

(c) Persons who engage in business as a lender approved by the United States secretary of housing and urban development for participation in any mortgage insurance program under the national housing act, as amended;

(d) Persons who engage in business as a subsidiary of or affiliate owned or controlled by one or more persons described in (a), (b), or (c) of this subsection;

(e) Persons who engage in business as an underwriter and distributor of securities issued by other persons, a seller of securities to the public, a broker of securities, or any combination of these activities, whose gross income is normally derived principally from these activities. However, this subsection shall not be construed to deny the deduction provided in subsection (1) of this section to the entity that issues any of the securities that are underwritten, distributed, sold, or brokered by any of the persons identified in this subsection. In addition, this subsection shall not be construed to deny the deduction provided in subsection (1) of this section to any collective investment entity such as a mutual fund, venture capital fund, hedge fund, deferred compensation trust or account, or any similar fund or account;

(f) Persons who engage in business as a provider of revolving credit accounts. However, this subsection shall only be construed to deny the deduction provided in subsection (1) of this section to interest income derived from the provision of the revolving credit accounts. If the person providing revolving credit accounts is also engaged in business as a person identified in (a), (b), (c), or (d) of this subsection, that person shall be denied the deduction provided in subsection (1) of this section in its entirety;

(g) Persons who make installment sales through installment sales contracts. However, this subsection shall only be construed to deny the deduction provided in subsection (1) of this section to interest income derived from the installment sales contracts. In addition, a person making installment sales through installment sales contracts shall not be deemed to be engaged in business for the purposes of this subsection unless they hold two or more installment sales contracts; and

(h) Persons whose primary business activity is substantially identical to the activities of any person listed in (a) through (g) of this subsection. However, this subsection shall not be construed to deny the deduction provided in subsection (1) of this section to any person who qualifies as a personal holding company as defined in section 542 of the internal revenue code, nor any person who would meet the definition of a personal holding company if that person were a corporation."

Renumber the sections consecutively and correct any internal references accordingly.

HB 1361 - S AMD 281

By Senators T. Sheldon, Rossi and Shin

WITHDRAWN 04/12/01

On page 1, on line 2 of the title, after "82.04.2907," insert "82.04.4281,"