BILL REQ. #:  H-4555.1 

Read first time 01/29/2004.   Referred to Committee on Trade & Economic Development.

     AN ACT Relating to business and occupation taxation of small businesses; and adding a new section to chapter 82.04 RCW.

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) The tax imposed under this chapter does not apply to an eligible person for a period of twenty-four consecutive months beginning with the month that the eligible person first engages in business.
     (2) The following definitions apply throughout this section, unless the context clearly requires otherwise.
     (a) "Advanced computing" means technologies used in the designing and developing of computing hardware and software, including innovations in designing the full spectrum of hardware from hand-held calculators to super computers, and peripheral equipment.
     (b) "Advanced materials" means materials with engineered properties created through the development of specialized processing and synthesis technology, including ceramics, high value-added metals, electronic materials, composites, polymers, and biomaterials.
     (c) "Biotechnology" means the application of technologies, such as recombinant DNA techniques, biochemistry, molecular and cellular biology, genetics and genetic engineering, cell fusion techniques, and new bioprocesses, using living organisms, or parts of organisms, to produce or modify products, to improve plants or animals, to develop microorganisms for specific uses, to identify targets for small molecule pharmaceutical development, or to transform biological systems into useful processes and products or to develop microorganisms for specific uses.
     (d) "Electronic device technology" means technologies involving microelectronics; semiconductors; electronic equipment and instrumentation; radio frequency, microwave, and millimeter electronics; optical and optic-electrical devices; and data and digital communications and imaging devices.
     (e) "Eligible person" means a person as defined in RCW 82.04.030, who is a small business as defined in RCW 19.85.020; and a manufacturer as defined in RCW 82.04.110 or engages in research and development in Washington in advanced computing, advanced materials, biotechnology, electronic device technology, or environmental technology. "Eligible person" does not include a business existing on the effective date of this section that incorporates, reincorporates, merges, is acquired by another business, or otherwise changes or reforms its identity after the effective date of this section.
     (f) "Environmental technology" means assessment and prevention of threats or damage to human health or the environment, environmental cleanup, and the development of alternative energy sources.
     (g) "Research and development" means activities performed to discover technological information, and technical and nonroutine activities concerned with translating technological information into new or improved products, processes, techniques, formulas, inventions, or software. The term includes exploration of a new use for an existing drug, device, or biological product if the new use requires separate licensing by the federal food and drug administration under Title 21 C.F.R. The term does not include adaptation or duplication of existing products where the products are not substantially improved by application of the technology, nor does the term include surveys and studies, social science and humanities research, market research or testing, quality control, sale promotion and service, computer software developed for internal use, and research in areas such as improved style, taste, and seasonal design.