BILL REQ. #: H-0686.1

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HOUSE BILL 1516
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State of Washington

60th Legislature

2007 Regular Session

By Representatives Roach, Hurst, Orcutt, Dunn, McDonald, Warnick, Haler, McCune, Rodne, Ericksen, Chase, Kristiansen, Morrell and Rolfes

Read first time 01/22/2007. Referred to Committee on Community & Economic Development & Trade.

AN ACT Relating to business and occupation tax exemptions for new businesses; adding a new section to chapter 82.04 RCW; and providing an effective date.

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)(a) This chapter does not apply to a new business during the first twelve months of operation of the business.
     (b) This chapter does not apply to a new business during the first twenty-four months of operation of the business if the new business has less than twenty-five employment positions at the time it begins to engage in the normal course of business. During the next thirty-six months of operation of the business, the business is exempt from taxes due under this chapter according to the following schedule:

Year	% of Tax Exempt
3	75%
4	50%
5	25%
after year 5	0

     (2) A new business may not take an exemption under this section during any reporting period in an amount that exceeds eight thousand three hundred thirty-three dollars, multiplied by the number of months in the reporting period.
     (3) As used in this section:
     (a)(i) "New business" means a business that obtained or was required to obtain a registration certificate under RCW 82.32.030 for the first time during the calendar year for which exemption is first claimed under this section.
     (ii) "New business" does not include:
     (A) A business that has been restructured, reorganized, or transferred, unless the majority of the activities to be conducted after restructuring, reorganization, or transferral are significantly different from the activities previously conducted;
     (B) A new branch location or other facility except by an existing out-of-state entity first doing business in this state;
     (C) A business that is substantially similar to a business currently operated, or operated within the past five years, by the same principals.
     (b) "Employment position" means a full-time, permanent employee of the new business.
     (4) A new business must file an application, in a form and manner required by the department, before taking a credit under this section. The department shall rule on the application within twenty days.

NEW SECTION. Sec. 2 This act takes effect August 1, 2007.

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