BILL REQ. #:  H-1530.2 

Read first time 02/27/2007.   Referred to Committee on Finance.

     AN ACT Relating to tax incentives for businesses that process electronic waste; reenacting and amending RCW 82.04.440; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.32 RCW; providing an effective date; and providing an expiration 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) Upon every person engaging within this state in the business of processing electronic products; as to such persons the amount of the tax with respect to the business shall, in the case of manufacturers, be equal to the value of products, including byproducts, manufactured, or in the case of processors for hire, be equal to the gross income of the business, multiplied by the rate of 0.2904 percent.
     (b) Upon every person engaging within this state in the business of selling, at wholesale or retail, electronic products processed under (a) of this subsection where the person is subject to the rate in (a) of this subsection for the processing of the electronic products; as to such persons the amount of the tax with respect to the business shall be equal to the gross proceeds of sales of the products multiplied by the rate of 0.2904 percent.
     (2)(a) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information to evaluate whether the stated goals of legislation were achieved. A person taking the preferential tax rate under this section shall make an annual survey to the department as provided in section 2 of this act.
     (b) The goal of the preferential tax rate under this section is to encourage the recycling of electronic products.
     (3) The definitions in this subsection apply to this section.
     (a) "Electronic product" has the meaning provided in RCW 70.95N.020.
     (b) "Processing electronic products" means disassembling, dismantling, or shredding electronic products, at a facility owned by the person, to recover materials contained in the electronic products and prepare those materials for reclaiming or reuse in new products in accordance with processing standards established under chapter 70.95N RCW.
     (4) This section expires January 1, 2013.

NEW SECTION.  Sec. 2   A new section is added to chapter 83.32 RCW to read as follows:
     (1) Each person claiming a tax preference that requires a survey under this section must report information to the department by filing a complete annual survey. The survey is due by March 31st of the year following any calendar year in which the tax preference is taken. The department may extend the due date for timely filing of annual surveys under this section as provided in RCW 82.32.590. The survey must include the amount of the tax preference taken. The survey shall also include the following information for employment positions in Washington:
     (a) The number of total employment positions;
     (b) Full-time, part-time, and temporary employment positions as a percent of total employment;
     (c) The number of employment positions according to the following wage bands: Less than thirty thousand dollars; thirty thousand dollars or greater, but less than sixty thousand dollars; and sixty thousand dollars or greater. A wage band containing fewer than three individuals may be combined with another wage band; and
     (d) The number of employment positions that have employer-provided medical, dental, and retirement benefits, by each of the wage bands.
     (2) The department may request additional information necessary to measure the results of, or determine eligibility for, the tax preference, to be submitted at the same time as the survey.
     (3) All information collected under this section, except the amount of the tax preference taken, is deemed taxpayer information under RCW 82.32.330. Information on the amount of tax preference taken is not subject to the confidentiality provisions of RCW 82.32.330. If the amount of the tax preference taken as reported on the survey is different than the amount actually taken or otherwise allowed by the department based on the taxpayer's excise tax returns or other information known to the department, the amount actually taken or allowed may be disclosed.
     (4) If a person fails to submit an annual survey under this section by the due date of the survey or any extension under RCW 82.32.590, the department shall declare the amount of the tax preference taken for the previous calendar year to be immediately due and payable. The department shall assess interest, but not penalties, on the amounts due under this section. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and must accrue until the taxes for which the tax preference was claimed are repaid. This information is not subject to the confidentiality provisions of RCW 82.32.330.
     (5) The department shall use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers shall be included in any category. The department shall report these statistics to the legislature each year by September 1st.
     (6) For the purposes of this section, "tax preference" has the meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a survey under this section.

Sec. 3   RCW 82.04.440 and 2006 c 300 s 8 and 2006 c 84 s 6 are each reenacted and amended to read as follows:
     (1) Every person engaged in activities that are subject to tax under two or more provisions of RCW 82.04.230 through 82.04.298, inclusive, shall be taxable under each provision applicable to those activities.
     (2) Persons taxable under section 1 of this act, RCW 82.04.2909(2), 82.04.250, 82.04.270, 82.04.294(2), or 82.04.260 (1)(c), (4), (11), or (12) with respect to selling products in this state, including those persons who are also taxable under RCW 82.04.261, shall be allowed a credit against those taxes for any (a) manufacturing taxes paid with respect to the manufacturing of products so sold in this state, and/or (b) extracting taxes paid with respect to the extracting of products so sold in this state or ingredients of products so sold in this state. Extracting taxes taken as credit under subsection (3) of this section may also be taken under this subsection, if otherwise allowable under this subsection. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the sale of those products.
     (3) Persons taxable as manufacturers under section 1 of this act, RCW 82.04.240 or 82.04.260 (1)(b) or (12), including those persons who are also taxable under RCW 82.04.261, shall be allowed a credit against those taxes for any extracting taxes paid with respect to extracting the ingredients of the products so manufactured in this state. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the manufacturing of those products.
     (4) Persons taxable under section 1 of this act, RCW 82.04.230, 82.04.240, 82.04.2909(1), 82.04.294(1), 82.04.2404, or 82.04.260 (1), (2), (4), (11), or (12), including those persons who are also taxable under RCW 82.04.261, with respect to extracting or manufacturing products in this state shall be allowed a credit against those taxes for any (i) gross receipts taxes paid to another state with respect to the sales of the products so extracted or manufactured in this state, (ii) manufacturing taxes paid with respect to the manufacturing of products using ingredients so extracted in this state, or (iii) manufacturing taxes paid with respect to manufacturing activities completed in another state for products so manufactured in this state. The amount of the credit shall not exceed the tax liability arising under this chapter with respect to the extraction or manufacturing of those products.
     (5) For the purpose of this section:
     (a) "Gross receipts tax" means a tax:
     (i) Which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which the deductions allowed would not constitute the tax an income tax or value added tax; and
     (ii) Which is also not, pursuant to law or custom, separately stated from the sales price.
     (b) "State" means (i) the state of Washington, (ii) a state of the United States other than Washington, or any political subdivision of such other state, (iii) the District of Columbia, and (iv) any foreign country or political subdivision thereof.
     (c) "Manufacturing tax" means a gross receipts tax imposed on the act or privilege of engaging in business as a manufacturer, and includes (i) the taxes imposed in section 1 of this act, RCW 82.04.240, 82.04.2404, 82.04.2909(1), 82.04.260 (1), (2), (4), (11), and (12), and 82.04.294(1); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as a manufacturer; and (iii) similar gross receipts taxes paid to other states.
     (d) "Extracting tax" means a gross receipts tax imposed on the act or privilege of engaging in business as an extractor, and includes (i) the tax imposed on extractors in RCW 82.04.230 and 82.04.260(12); (ii) the tax imposed under RCW 82.04.261 on persons who are engaged in business as an extractor; and (iii) similar gross receipts taxes paid to other states.
     (e) "Business", "manufacturer", "extractor", and other terms used in this section have the meanings given in RCW 82.04.020 through 82.04.212, notwithstanding the use of those terms in the context of describing taxes imposed by other states.

NEW SECTION.  Sec. 4   This act takes effect October 1, 2007.