BILL REQ. #:  S-4278.1 

Read first time 01/17/2006.   Referred to Committee on Ways & Means.

     AN ACT Relating to sales and use taxes related to the state route 16 corridor improvements project; amending RCW 47.46.060; adding a new section to chapter 82.08 RCW; and adding a new section to chapter 82.12 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to:
     (a) Charges made for labor and services rendered by any person in respect to the building of any street, place, road, highway, easement, right of way, bridge, tunnel, or trestle which is owned by the state or by the United States and which is used or to be used primarily for foot or vehicular traffic; or
     (b) Sales of tangible personal property that becomes an ingredient or component of the street, place, road, highway, easement, right of way, bridge, tunnel, or trestle which is owned by the state or by the United States and which is used or to be used primarily for foot or vehicular traffic during the course of the building of such street, place, road, highway, easement, right of way, bridge, tunnel, or trestle.
     (2) The exemption provided by this section does not apply:
     (a) To any project for which a sales and use tax deferral certificate has been issued by the department under RCW 47.46.060; and
     (b) Unless at least ninety percent of the cost of the project will be recovered through tolls or other direct user fees.
     (3) The buyer must provide the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the certificate for the seller's files.
     (4) For the purposes of this section, "direct user fee" means a fee charged for the specific use of the facility.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply with respect to the use of tangible personal property that becomes an ingredient or component of any street, place, road, highway, easement, right of way, bridge, tunnel, or trestle which is owned by the state or by the United States and which is used or to be used primarily for foot or vehicular traffic during the course of building.
     (2) The eligibility requirements, conditions, and definitions in section 1 of this act apply to this section.

Sec. 3   RCW 47.46.060 and 2002 c 114 s 18 are each amended to read as follows:
     (1) Any person, including the department of transportation and any private entity or entities, may apply for deferral of taxes on the site preparation for, the construction of, the acquisition of any related machinery and equipment which will become a part of, and the rental of equipment for use in the state route number 16 corridor improvements project under this chapter. Application shall be made to the department of revenue in a form and manner prescribed by the department of revenue. The application shall contain information regarding estimated or actual costs, time schedules for completion and operation, and other information required by the department of revenue. The department of revenue shall approve the application within sixty days if it meets the requirements of this section.
     (2) The department of revenue shall issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters 82.08, 82.12, and 82.14 RCW on the project.
     (3) The department of transportation or a private entity granted a tax deferral under this section shall begin paying the deferred taxes in the fifth year after the date certified by the department of revenue as the date on which the project is operationally complete. The first payment is due on December 31st of the fifth calendar year after such certified date, with subsequent annual payments due on December 31st of the following nine years. Each payment shall equal ten percent of the deferred tax. The project is operationally complete under this section when the collection of tolls is commenced for the state route number 16 improvements covered by the deferral.
     (4) The department of revenue may authorize an accelerated repayment schedule upon request of the department of transportation or a private entity granted a deferral under this section.
     (5) Interest shall not be charged on any taxes deferred under this section for the period of deferral, although all other penalties and interest applicable to delinquent excise taxes may be assessed and imposed for delinquent payments under this section. The debt for deferred taxes is not extinguished by insolvency or other failure of the private entity. Transfer of ownership does not terminate the deferral.
     (6) Applications and any other information received by the department of revenue under this section are not confidential and are subject to disclosure. Chapter 82.32 RCW applies to the administration of this section.
     (7) Taxes due under chapters 82.08 and 82.12 RCW on the site preparation for, the construction of, the acquisition of any related machinery and equipment that will become a part of, and the rental of equipment for use in the state route number 16 corridor improvements for which a deferral has been granted need not be repaid.