BILL REQ. #:  H-4107.1 

Read first time 01/17/08.   Referred to Committee on Finance.

     AN ACT Relating to the taxation of energy savings performance contracts; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; creating a new section; and providing an effective date.

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

NEW SECTION.  Sec. 1   The legislature finds that conserving energy in publicly owned buildings not only benefits Washington's overall supply of energy, but also contributes to meeting the state's greenhouse gas reduction goals. The legislature further finds that taxpayers are the direct beneficiaries of energy and water conservation in publicly owned buildings and reducing the cost of performance-based energy contracts is a means by which municipalities can achieve even greater levels of energy and water conservation. Although municipalities and the state have been using energy savings performance contracts since the mid-1980's, it is only since 2002 that the entire scope of the contract has been subject to the sales and use tax.
     Therefore, the legislature declares that it is the policy of the state to exempt performance contracts from the sales and use tax.

NEW SECTION.  Sec. 2   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 performance-based contracted energy equipment and services and energy management systems.
     (2) A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. This exemption is available only when the buyer provides 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.
     (3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Energy equipment and services" has the same meaning provided in RCW 39.35A.020.
     (b) "Energy management system" has the same meaning provided in RCW 39.35.030.
     (c) "Performance-based contract" has the same meaning provided in RCW 39.35A.020.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The tax levied by this chapter does not apply to performance-based contracted energy equipment and services and energy management systems.
     (2) A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. This exemption is available only when the buyer provides 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.
     (3) The definitions in section 2 of this act apply to this section.

NEW SECTION.  Sec. 4   This act takes effect July 1, 2008.