AN
ACT Relating to excise tax treatment of linen and uniform supply services;
amending RCW 82.14.020; adding a new section to chapter 82.08 RCW; creating a
new section; providing an effective date; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. The
legislature finds that because of the mixed retailing nature of linen and
uniform supply services, they have been incorrectly sited for tax purposes. As
a result, some companies that perform some activities related to this activity
outside the state of Washington have not been required to collect retail sales
taxes upon linen and uniform supply services provided to Washington customers.
The activity has aspects of both the rental of tangible personal property and
retail services related to tangible personal property. This error in tax
treatment provides an incentive for businesses to locate some of their
functions out of state. In-state businesses cannot compete if their
out-of-state competitors are not required to collect sales tax for services
provided to the same customers.
The
purpose of this act is to clarify the taxable situs and nature of linen and
uniform supply services.
NEW
SECTION. Sec. 2. A
new section is added to chapter 82.08 RCW to read as follows:
For
purposes of this chapter, a retail sale of linen and uniform supply services is
deemed to occur at the place of delivery to the customer. "Linen and
uniform supply services" means the activity of providing customers with a
supply of clean linen, towels, uniforms, gowns, protective apparel, clean room
apparel, mats, rugs, and similar items, whether ownership of the item is in the
person operating the linen and uniform supply service or in the customer. The
term includes supply services operating their own cleaning establishments as
well as those contracting with other laundry or dry cleaning businesses.
Sec.
3. RCW
82.14.020 and 1997 c 201 s 1 are each amended to read as follows:
For
purposes of this chapter:
(1)
A retail sale consisting solely of the sale of tangible personal property shall
be deemed to have occurred at the retail outlet at or from which delivery is
made to the consumer;
(2)
A retail sale consisting essentially of the performance of personal business or
professional services shall be deemed to have occurred at the place at which
such services were primarily performed, except that for the performance of a
tow truck service, as defined in RCW 46.55.010, the retail sale shall be deemed
to have occurred at the place of business of the operator of the tow truck
service;
(3)
A retail sale consisting of the rental of tangible personal property shall be
deemed to have occurred (a) in the case of a rental involving periodic rental
payments, at the primary place of use by the lessee during the period covered
by each payment, or (b) in all other cases, at the place of first use by the
lessee;
(4)
A retail sale within the scope of ((the second paragraph of)) RCW
82.04.050(2), and a retail sale of taxable personal property to be
installed by the seller shall be deemed to have occurred at the place where the
labor and services involved were primarily performed;
(5)
A retail sale consisting of the providing to a consumer of telephone service,
as defined in RCW 82.04.065, other than a sale of tangible personal property
under subsection (1) of this section or a rental of tangible personal property
under subsection (3) of this section, shall be deemed to have occurred at the
situs of the telephone or other instrument through which the telephone service
is rendered;
(6)
A retail sale of linen and uniform supply services is deemed to occur as
provided in section 2 of this act.
(7)
"City" means a city or town;
(((7)))
(8) The meaning ascribed to words and phrases in chapters 82.04, 82.08
and 82.12 RCW, as now or hereafter amended, insofar as applicable, shall have
full force and effect with respect to taxes imposed under authority of this
chapter;
(((8)))
(9) "Taxable event" shall mean any retail sale, or any use of
an article of tangible personal property, upon which a state tax is imposed
pursuant to chapter 82.08 or 82.12 RCW, as they now exist or may hereafter be
amended: PROVIDED, HOWEVER, That the term shall not include a retail sale
taxable pursuant to RCW 82.08.150, as now or hereafter amended;
(((9)))
(10) "Treasurer or other legal depository" shall mean the
treasurer or legal depository of a county or city.
NEW
SECTION. Sec. 4. 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, 2001.
