BILL REQ. #: H-3732.4
| State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 02/02/12. Referred to Committee on Ways & Means.
AN ACT Relating to tax expenditure reform to provide transparency and accountability in fiscal matters; amending RCW 82.04.4282, 43.136.045, 82.04.050, 82.04.062, 82.08.010, 82.66.020, 82.04.110, 82.04.120, 82.04.257, 82.04.260, 82.04.280, 82.04.280, 82.04.290, 82.62.020, 82.73.020, and 82.04.540; reenacting and amending RCW 82.12.010 and 82.04.250; repealing RCW 82.04.330, 82.04.340, 82.04.370, 82.04.405, 82.04.410, 82.04.4285, 82.04.4287, 82.04.4289, 82.04.4292, 82.04.4293, 82.04.432, 82.04.4332, 82.08.0253, 82.08.0257, 82.08.0259, 82.08.0264, 82.08.0265, 82.08.0266, 82.08.02665, 82.08.0267, 82.08.0268, 82.08.0273, 82.08.0275, 82.12.0257, 82.12.0258, 82.12.0261, 82.12.0262, 82.12.0263, 82.12.0265, 82.12.0266, 82.12.0269, 82.12.0272, 82.04.4282, 82.04.4281, 82.08.0256, 82.12.0345, 82.08.0203, 82.08.02525, 82.08.02535, 82.08.02569, 82.08.02573, 82.08.0271, 82.08.0278, 82.08.0287, 82.08.02875, 82.08.0291, 82.08.031, 82.08.830, 82.08.834, 82.08.870, 82.12.02525, 82.12.02569, 82.12.930, 82.12.0274, 82.12.0279, 82.12.0282, 82.12.02917, 82.12.031, 82.12.834, 82.12.845, 82.12.02595, 82.12.0264, 82.12.0284, 82.08.995, 82.08.999, 82.12.999, 82.08.025651, 82.12.025651, 82.12.995, 82.08.02081, 82.08.02087, 82.08.02565, 82.08.02566, 82.08.02568, 82.08.0267, 82.08.0272, 82.08.0274, 82.08.02745, 82.08.0288, 82.08.0294, 82.08.0296, 82.08.0298, 82.08.0311, 82.08.0315, 82.08.036, 82.08.806, 82.08.807, 82.08.810, 82.08.820, 82.08.855, 82.08.865, 82.08.880, 82.08.890, 82.08.900, 82.08.910, 82.08.920, 82.08.990, 82.12.02081, 82.12.02087, 82.12.02565, 82.12.02566, 82.12.02568, 82.12.0267, 82.12.0268, 82.12.02685, 82.12.0273, 82.12.0283, 82.12.0294, 82.12.0296, 82.12.0298, 82.12.0311, 82.12.0315, 82.12.038, 82.12.806, 82.12.807, 82.12.810, 82.12.820, 82.12.855, 82.12.865, 82.12.880, 82.12.890, 82.12.900, 82.12.910, 82.12.920, 82.12.800, 82.12.801, 82.12.802, 82.12.860, 82.66.040, 82.08.850, 82.12.850, 82.12.02085, 82.08.0282, 82.08.0269, 82.08.0279, 82.08.700, 82.12.700, 82.12.955, 82.08.02537, 82.08.0289, 82.08.832, 82.12.0347, 82.12.832, 82.08.0205, 82.08.02082, 82.08.9995, 82.12.9995, 82.12.0205, 82.12.02082, 82.08.0258, 82.08.02795, 82.08.02805, 82.08.02806, 82.08.02807, 82.08.0283, 82.08.02915, 82.08.0299, 82.08.803, 82.08.804, 82.08.808, 82.08.925, 82.08.935, 82.08.940, 82.08.945, 82.08.997, 82.08.998, 82.12.0259, 82.12.02745, 82.12.02747, 82.12.02748, 82.12.02749, 82.12.0277, 82.12.02915, 82.12.803, 82.12.804, 82.12.808, 82.12.925, 82.12.935, 82.12.940, 82.12.945, 82.12.998, 82.04.339, 82.04.3395, 82.04.363, 82.04.3651, 82.04.367, 82.04.368, 82.04.380, 82.04.385, 82.04.395, 82.04.397, 82.04.399, 82.04.408, 82.04.415, 82.04.418, 82.04.419, 82.04.4201, 82.04.4251, 82.04.4291, 82.04.4322, 82.04.4324, 82.04.4326, 82.04.4327, 82.04.434, 82.04.600, 82.04.615, 82.04.335, 82.04.338, 82.04.4271, 82.04.640, 82.04.4275, 82.04.655, 82.04.4274, 82.04.2907, 82.04.298, 82.04.315, 82.04.317, 82.04.331, 82.04.332, 82.04.333, 82.04.334, 82.04.337, 82.04.392, 82.04.416, 82.04.421, 82.04.422, 82.04.425, 82.04.4261, 82.04.4262, 82.04.4267, 82.04.4294, 82.04.4295, 82.04.4296, 82.04.433, 82.04.4333, 82.04.4339, 82.04.4451, 82.04.447, 82.04.4482, 82.04.4486, 82.04.601, 82.62.030, 82.04.2403, 82.04.424, 82.04.4272, 82.04.43391, 82.04.645, 82.04.650, 82.04.263, 82.04.750, 82.04.627, 82.04.2905, 82.04.272, 82.04.2906, 82.04.2908, 82.04.324, 82.04.326, 82.04.327, 82.04.355, 82.04.4263, 82.04.4264, 82.04.4265, 82.04.4297, 82.04.4311, 82.04.4337, 82.04.620, and 82.04.635; creating a new section; providing effective dates; providing a contingent effective date; and providing a contingent expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature finds that to
effectively fulfill its role as a financial steward of state tax
dollars, the legislature must allow all nonconstitutionally required
tax expenditures to periodically expire. The state must also take
proactive measures to continue tax expenditures that prove beneficial
to the state according to objective, rigorous, financially based
return-on-investment standards. Requiring all tax expenditures to have
a periodic expiration date allows those tax expenditures that are out-of-date, or failing to deliver the promised benefits or a measurable
return on investment, or otherwise failing to garner widespread support
for their continuance, to expire while preserving those that are
providing real, demonstrable value for taxpayers and the state. The
legislature seeks to be philosophically consistent by requiring all
exemptions, modifications, and preferential rates, regardless of the
size or length of previous existence, to face an expiration date.
(2) The legislature therefore intends to expire all
nonconstitutionally required tax expenditures that are not already
subject to expiration.
NEW SECTION. Sec. 101 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2017:
(1) RCW 82.04.330 (Exemptions -- Sales of agricultural products) and
2001 c 118 s 3, 1993 sp.s. c 25 s 305, 1988 c 253 s 2, & 1987 c 23 s 4;
(2) RCW 82.04.340 (Exemptions -- Boxing, sparring, or wrestling
matches) and 2000 c 103 s 6, 1988 c 19 s 4, & 1961 c 15 s 82.04.340;
(3) RCW 82.04.370 (Exemptions -- Certain fraternal and beneficiary
organizations) and 1961 c 293 s 4 & 1961 c 15 s 82.04.370;
(4) RCW 82.04.405 (Exemptions -- Credit unions) and 1998 c 311 s 4 &
1970 ex.s. c 101 s 3;
(5) RCW 82.04.410 (Exemptions -- Hatching eggs and poultry) and 1967
ex.s. c 149 s 15 & 1961 c 15 s 82.04.410;
(6) RCW 82.04.4285 (Deductions -- Motor vehicle fuel and special fuel
taxes) and 1998 c 176 s 3 & 1980 c 37 s 6;
(7) RCW 82.04.4287 (Deductions -- Compensation for receiving,
washing, etc., horticultural products for person exempt under RCW
82.04.330 -- Materials and supplies used) and 1980 c 37 s 8;
(8) RCW 82.04.4289 (Exemption -- Compensation for patient services or
attendant sales of drugs dispensed pursuant to prescription by certain
nonprofit organizations) and 2003 c 168 s 402, 1998 c 325 s 1, 1993 c
492 s 305, 1981 c 178 s 2, & 1980 c 37 s 10;
(9) RCW 82.04.4292 (Deductions -- Interest on investments or loans
secured by mortgages or deeds of trust) and 2010 1st sp.s. c 23 s 301
& 1980 c 37 s 12;
(10) RCW 82.04.4293 (Deductions -- Interest on obligations of the
state, its political subdivisions, and municipal corporations) and 1980
c 37 s 13;
(11) RCW 82.04.432 (Deductions -- Municipal sewer service fees or
charges) and 1967 ex.s. c 149 s 17;
(12) RCW 82.04.4332 (Deductions -- Tuition fees of foreign degree-granting institutions) and 1993 c 181 s 10;
(13) RCW 82.08.0253 (Exemptions -- Sale and distribution of
newspapers) and 2009 c 535 s 506 & 1980 c 37 s 21;
(14) RCW 82.08.0257 (Exemptions -- Auction sales of personal property
used in farming) and 2009 c 535 s 511 & 1980 c 37 s 25;
(15) RCW 82.08.0259 (Exemptions -- Sales of livestock) and 2001 c 118
s 4 & 1980 c 37 s 27;
(16) RCW 82.08.0264 (Exemptions -- Sales of motor vehicles, trailers,
or campers to nonresidents for use outside the state) and 2010 c 161 s
1165, 2007 c 135 s 1, & 1980 c 37 s 31;
(17) RCW 82.08.0265 (Exemptions -- Sales to nonresidents of tangible
personal property which becomes a component of property of the
nonresident by installing, repairing, etc. -- Labor and services for
installing, repairing, etc.) and 1980 c 37 s 32;
(18) RCW 82.08.0266 (Exemptions -- Sales of watercraft to
nonresidents for use outside the state) and 1999 c 358 s 5 & 1980 c 37
s 33;
(19) RCW 82.08.02665 (Exemptions--Sales of watercraft, vessels to
residents of foreign countries) and 1999 c 358 s 6 & 1993 c 119 s 1;
(20) RCW 82.08.0267 (Exemptions -- Sales of poultry for producing
poultry and poultry products for sale) and 1980 c 37 s 34;
(21) RCW 82.08.0268 (Exemptions -- Sales of machinery and implements,
and related parts and labor, for farming to nonresidents for use
outside the state) and 1998 c 167 s 1 & 1980 c 37 s 35;
(22) RCW 82.08.0273 (Exemptions -- Sales to nonresidents of tangible
personal property, digital goods, and digital codes for use outside the
state -- Proof of nonresident status -- Penalties) and 2011 c 7 s 1, 2010
c 106 s 215, 2009 c 535 s 512, 2007 c 135 s 2, 2003 c 53 s 399, 1993 c
444 s 1, 1988 c 96 s 1, 1982 1st ex.s. c 5 s 1, & 1980 c 37 s 39;
(23) RCW 82.08.0275 (Exemptions -- Sales of and labor and service
charges for mining, sorting, crushing, etc., of sand, gravel, and rock
from county or city quarry for public road purposes) and 1980 c 37 s
41;
(24) RCW 82.12.0257 (Exemptions -- Use of personal property of the
operating property of a public utility by state or political
subdivision) and 2010 c 106 s 220, 2009 c 535 s 611, & 1980 c 37 s 57;
(25) RCW 82.12.0258 (Exemptions -- Use of personal property
previously used in farming and purchased from farmer at auction) and
2009 c 535 s 612 & 1980 c 37 s 58;
(26) RCW 82.12.0261 (Exemptions -- Use of livestock) and 2001 c 118
s 5 & 1980 c 37 s 60;
(27) RCW 82.12.0262 (Exemptions -- Use of poultry for producing
poultry and poultry products for sale) and 1980 c 37 s 61;
(28) RCW 82.12.0263 (Exemptions -- Use of fuel by extractor or
manufacturer thereof) and 1980 c 37 s 62;
(29) RCW 82.12.0265 (Exemptions -- Use by bailee of tangible personal
property consumed in research, development, etc., activities) and 1980
c 37 s 64;
(30) RCW 82.12.0266 (Exemptions -- Use by residents of motor vehicles
and trailers acquired and used while members of the armed services and
stationed outside the state) and 1980 c 37 s 65;
(31) RCW 82.12.0269 (Exemptions -- Use of sand, gravel, or rock to
extent of labor and service charges for mining, sorting, crushing,
etc., thereof from county or city quarry for public road purposes) and
1980 c 37 s 68;
(32) RCW 82.12.0272 (Exemptions -- Use of personal property in single
trade shows) and 2009 c 535 s 616 & 1980 c 37 s 70;
(33) RCW 82.04.4282 (Deductions -- Fees, dues, charges) and 2012 c
... s 102 (section 102 of this act), 2009 c 535 s 410, 1994 c 124 s 3,
1989 c 392 s 1, & 1980 c 37 s 3;
(34) RCW 82.04.4281 (Deductions -- Investments, dividends, interest
on loans) and 2007 c 54 s 9, 2002 c 150 s 2, & 1980 c 37 s 2. Formerly
RCW 82.04.430(1);
(35) RCW 82.08.0256 (Exemptions -- Sale of the operating property of
a public utility to the state or a political subdivision) and 2010 c
106 s 213, 2009 c 535 s 509, & 1980 c 37 s 24; and
(36) RCW 82.12.0345 (Exemptions -- Use of newspapers) and 2009 c 535
s 618 & 1994 c 124 s 11.
Sec. 102 RCW 82.04.4282 and 2009 c 535 s 410 are each amended to
read as follows:
(1) In computing tax there may be deducted from the measure of tax
amounts derived from bona fide (((1))) (a) initiation fees, (((2))) (b)
dues, (((3))) (c) contributions, (((4))) (d) donations, (((5))) (e)
tuition fees, (((6))) (f) charges made by a nonprofit trade or
professional organization for attending or occupying space at a trade
show, convention, or educational seminar sponsored by the nonprofit
trade or professional organization, which trade show, convention, or
educational seminar is not open to the general public, (((7))) (g)
charges made for operation of privately operated kindergartens, and
(((8))) (h) endowment funds.
(2) This section may not be construed to exempt any person,
association, or society from tax liability upon selling tangible
personal property, digital goods, digital codes, or digital automated
services, or upon providing facilities or other services for which a
special charge is made to members or others.
(3) If dues are in exchange for any significant amount of goods or
services rendered by the recipient thereof to members without any
additional charge to the member, or if the dues are graduated upon the
amount of goods or services rendered, the value of such goods or
services ((shall)) are not ((be)) considered as a deduction under this
section.
(4) The deductions under this section applicable to subsections
(1)(a) through (d) and (f) through (h) of this section do not apply on
or after July 1, 2019.
(5) The deduction under this section applicable to subsection
(1)(e) of this section applies until July 1, 2017.
Sec. 103 RCW 43.136.045 and 2011 c 335 s 2 are each amended to
read as follows:
(1) The citizen commission for performance measurement of tax
preferences must develop a schedule to accomplish an orderly review of
tax preferences at least once every ten years. In determining the
schedule, the commission must consider the order the tax preferences
were enacted into law, in addition to other factors including but not
limited to grouping preferences for review by type of industry,
economic sector, or policy area. The commission may elect to include,
anywhere in the schedule, a tax preference that has a statutory
expiration date. The commission must omit from the schedule tax
preferences that are required by constitutional law((, sales and use
tax exemptions for machinery and equipment for manufacturing, research
and development, or testing, the small business credit for the business
and occupation tax,)) sales and use tax exemptions for food and
prescription drugs, property tax relief for retired persons, and
property tax valuations based on current use, and may omit any tax
preference that the commission determines is a critical part of the
structure of the tax system. As an alternative to the process under
RCW 43.136.055, the commission may recommend to the joint legislative
audit and review committee an expedited review process for any tax
preference.
(2) The commission must revise the schedule as needed each year,
taking into account newly enacted or terminated tax preferences. The
commission must deliver the schedule to the joint legislative audit and
review committee by September 1st of each year.
(3) The commission must provide a process for effective citizen
input during its deliberations.
NEW SECTION. Sec. 201 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2019:
(1) RCW 82.08.0203 (Exemptions -- Trail grooming services) and 2008
c 260 s 1;
(2) RCW 82.08.02525 (Exemptions -- Sale of copied public records by
state and local agencies) and 2011 c 60 s 49, 2009 c 535 s 505, & 1996
c 63 s 1;
(3) RCW 82.08.02535 (Exemptions -- Sales and distribution of
magazines or periodicals by subscription for fund-raising) and 2009 c
535 s 507 & 1995 2nd sp.s. c 8 s 1;
(4) RCW 82.08.02569 (Exemptions -- Sales of tangible personal
property related to a building or structure that is an integral part of
a laser interferometer gravitational wave observatory) and 1996 c 113
s 1;
(5) RCW 82.08.02573 (Exemptions -- Sales by a nonprofit organization
for fund-raising activities) and 2010 c 106 s 214 & 1998 c 336 s 3;
(6) RCW 82.08.0271 (Exemptions -- Sales to municipal corporations,
the state, and political subdivisions of tangible personal property,
labor and services on watershed protection and flood prevention
contracts) and 1980 c 37 s 37;
(7) RCW 82.08.0278 (Exemptions -- Sales between political
subdivisions resulting from annexation or incorporation) and 1980 c 37
s 44;
(8) RCW 82.08.0287 (Exemptions -- Sales of passenger motor vehicles
as ride-sharing vehicles) and 2001 c 320 s 4, 1996 c 244 s 4, 1995 c
274 s 2, 1993 c 488 s 2, & 1980 c 166 s 1;
(9) RCW 82.08.02875 (Exemptions -- Vehicle parking charges subject to
tax at stadium and exhibition center) and 1997 c 220 s 203;
(10) RCW 82.08.0291 (Exemptions -- Sales of amusement and recreation
services or personal services by nonprofit youth organization -- Local
government physical fitness classes) and 2000 c 103 s 8, 1994 c 85 s 1,
& 1981 c 74 s 2;
(11) RCW 82.08.031 (Exemptions -- Sales to artistic or cultural
organizations of certain objects acquired for exhibition or
presentation) and 1981 c 140 s 4;
(12) RCW 82.08.830 (Exemptions -- Sales at camp or conference center
by nonprofit organization) and 1997 c 388 s 2;
(13) RCW 82.08.834 (Exemptions -- Sales/leasebacks by regional
transit authorities) and 2000 2nd sp.s. c 4 s 21;
(14) RCW 82.08.870 (Exemptions -- Motorcycles for training programs)
and 2001 c 285 s 2;
(15) RCW 82.12.02525 (Exemptions -- Sale of copied public records by
state and local agencies) and 2011 c 60 s 50, 2009 c 535 s 609, & 1996
c 63 s 2;
(16) RCW 82.12.02569 (Exemptions -- Use of tangible personal property
related to a building or structure that is an integral part of a laser
interferometer gravitational wave observatory) and 1996 c 113 s 2;
(17) RCW 82.12.930 (Exemptions -- Watershed protection or flood
prevention) and 2003 c 5 s 17;
(18) RCW 82.12.0274 (Exemptions -- Use of tangible personal property
by political subdivision resulting from annexation or incorporation)
and 1980 c 37 s 72;
(19) RCW 82.12.0279 (Exemptions -- Use of ferry vessels by the state
or local governmental units -- Components thereof) and 2003 c 5 s 9 &
1980 c 37 s 77;
(20) RCW 82.12.0282 (Exemptions -- Use of vans as ride-sharing
vehicles) and 2001 c 320 s 5, 1999 c 358 s 11, 1996 c 88 s 4, 1993 c
488 s 4, & 1980 c 166 s 2;
(21) RCW 82.12.02917 (Exemptions -- Use of amusement and recreation
services by nonprofit youth organization) and 1999 c 358 s 7;
(22) RCW 82.12.031 (Exemptions -- Use by artistic or cultural
organizations of certain objects) and 1981 c 140 s 5;
(23) RCW 82.12.834 (Exemptions -- Sales/leasebacks by regional
transit authorities) and 2001 c 320 s 6 & 2000 2nd sp.s. c 4 s 22;
(24) RCW 82.12.845 (Use of motorcycles loaned to department of
licensing) and 2001 c 121 s 1;
(25) RCW 82.12.02595 (Exemptions -- Personal property and certain
services donated to nonprofit organization or governmental entity) and
2009 c 535 s 615, 2004 c 155 s 1, 2003 c 5 s 11, 1998 c 182 s 1, & 1995
c 201 s 1;
(26) RCW 82.12.0264 (Exemptions -- Use of dual-controlled motor
vehicles by school for driver training) and 1980 c 37 s 63;
(27) RCW 82.12.0284 (Exemptions -- Use of computers or computer
components, accessories, software, digital goods, or digital codes
donated to schools or colleges) and 2009 c 535 s 617, 2007 c 54 s 15,
2003 c 168 s 603, & 1983 1st ex.s. c 55 s 7;
(28) RCW 82.08.995 (Exemptions -- Certain limited purpose public
corporations, commissions, and authorities) and 2009 c 535 s 514 & 2007
c 381 s 2;
(29) RCW 82.08.999 (Exemptions -- Joint municipal utility services
authorities) and 2011 c 258 s 12;
(30) RCW 82.12.999 (Exemptions -- Joint municipal utility services
authorities) and 2011 c 258 s 13;
(31) RCW 82.08.025651 (Exemptions -- Sales of machinery and equipment
to public research institutions) and 2011 c 23 s 4;
(32) RCW 82.12.025651 (Exemptions -- Use of machinery and equipment
by public research institutions) and 2011 c 23 s 5; and
(33) RCW 82.12.995 (Exemptions -- Certain limited purpose public
corporations, commissions, and authorities) and 2009 c 535 s 622 & 2007
c 381 s 3.
NEW SECTION. Sec. 202 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2021:
(1) RCW 82.08.02081 (Exemptions -- Audio or video programming) and
2009 c 535 s 502;
(2) RCW 82.08.02087 (Exemptions -- Digital goods and services--Purchased for business purposes) and 2010 c 111 s 402 & 2009 c 535 s
504;
(3) RCW 82.08.02565 (Exemptions -- Sales of machinery and equipment
for manufacturing, research and development, or a testing operation--Labor and services for installation -- Exemption certificate -- Rules) and
2011 c 23 s 2, 2009 c 535 s 510, 1999 c 211 s 5, 1999 c 211 s 3, & 1998
c 330 s 1;
(4) RCW 82.08.02566 (Exemptions -- Sales of tangible personal
property incorporated in prototype for parts, auxiliary equipment, and
aircraft modification -- Limitations on yearly exemption) and 2003 c 168
s 208, 1997 c 302 s 1, & 1996 c 247 s 4;
(5) RCW 82.08.02568 (Exemptions -- Sales of carbon and similar
substances that become an ingredient or component of anodes or cathodes
used in producing aluminum for sale) and 1996 c 170 s 1;
(6) RCW 82.08.0267 (Exemptions -- Sales of poultry for producing
poultry and poultry products for sale) and 1980 c 37 s 34;
(7) RCW 82.08.0272 (Exemptions -- Sales of semen for artificial
insemination of livestock) and 1980 c 37 s 38;
(8) RCW 82.08.0274 (Exemptions -- Sales of form lumber to person
engaged in constructing, repairing, etc., structures for consumers) and
1980 c 37 s 40;
(9) RCW 82.08.02745 (Exemptions -- Charges for labor and services or
sales of tangible personal property related to agricultural employee
housing -- Exemption certificate -- Rules) and 2007 c 54 s 14, 1997 c 438
s 1, & 1996 c 117 s 1;
(10) RCW 82.08.0288 (Exemptions -- Lease of certain irrigation
equipment) and 1983 1st ex.s. c 55 s 5;
(11) RCW 82.08.0294 (Exemptions -- Sales of feed for cultivating or
raising fish for sale) and 1985 c 148 s 3;
(12) RCW 82.08.0296 (Exemptions -- Sales of feed consumed by
livestock at a public livestock market) and 1986 c 265 s 1;
(13) RCW 82.08.0298 (Exemptions -- Sales of diesel fuel for use in
operating watercraft in commercial deep sea fishing or commercial
passenger fishing boat operations outside the state) and 1987 c 494 s
1;
(14) RCW 82.08.0311 (Exemptions -- Sales of materials and supplies
used in packing horticultural products) and 1988 c 68 s 1;
(15) RCW 82.08.0315 (Exemptions -- Rentals or sales related to motion
picture or video productions -- Exceptions -- Certificate) and 1997 c 61 s
1 & 1995 2nd sp.s. c 5 s 1;
(16) RCW 82.08.036 (Exemptions -- Vehicle battery core deposits or
credits -- Replacement vehicle tire fees -- "Core deposits or credits"
defined) and 1989 c 431 s 45;
(17) RCW 82.08.806 (Exemptions -- Sale of computer equipment parts
and services to printer or publisher) and 2011 c 174 s 204, 2010 1st
sp.s. c 23 s 516, 2009 c 461 s 5, & 2004 c 8 s 2;
(18) RCW 82.08.807 (Exemptions--Direct mail delivery charges) and
2005 c 514 s 115;
(19) RCW 82.08.810 (Exemptions -- Air pollution control facilities at
a thermal electric generation facility -- Exceptions -- Exemption
certificate -- Payments on cessation of operation) and 1997 c 368 s 2;
(20) RCW 82.08.820 (Exemptions -- Remittance -- Warehouse and grain
elevators and distribution centers -- Material-handling and racking
equipment -- Construction of warehouse or elevator -- Information sheet--Rules -- Records -- Exceptions) and 2011 c 174 s 206, 2006 c 354 s 12, 2005
c 513 s 11, & 1997 c 450 s 2;
(21) RCW 82.08.855 (Exemptions -- Replacement parts for qualifying
farm machinery and equipment) and 2007 c 332 s 1 & 2006 c 172 s 1;
(22) RCW 82.08.865 (Exemptions -- Diesel, biodiesel, and aircraft
fuel for farm fuel users) and 2010 c 106 s 218, 2007 c 443 s 1, & 2006
c 7 s 1;
(23) RCW 82.08.880 (Exemptions -- Animal pharmaceuticals) and 2001
2nd sp.s. c 17 s 1;
(24) RCW 82.08.890 (Exemptions -- Qualifying livestock nutrient
management equipment and facilities) and 2010 1st sp.s. c 23 s 601,
2009 c 469 s 601, 2006 c 151 s 2, & 2001 2nd sp.s. c 18 s 2;
(25) RCW 82.08.900 (Exemptions -- Anaerobic digesters) and 2006 c 151
s 4 & 2001 2nd sp.s. c 18 s 4;
(26) RCW 82.08.910 (Exemptions -- Propane or natural gas to heat
chicken structures) and 2001 2nd sp.s. c 25 s 3;
(27) RCW 82.08.920 (Exemptions -- Chicken bedding materials) and 2001
2nd sp.s. c 25 s 5;
(28) RCW 82.08.990 (Exemptions -- Import or export commerce) and 2007
c 477 s 3;
(29) RCW 82.12.02081 (Exemptions -- Audio or video programming) and
2009 c 535 s 602;
(30) RCW 82.12.02087 (Exemptions -- Digital goods, codes, and
services -- Used for business purposes) and 2010 c 111 s 502 & 2009 c 535
s 607;
(31) RCW 82.12.02565 (Exemptions -- Machinery and equipment used for
manufacturing, research and development, or a testing operation) and
2003 c 5 s 5, 1999 c 211 s 6, 1998 c 330 s 2, 1996 c 247 s 3, & 1995
1st sp.s. c 3 s 3;
(32) RCW 82.12.02566 (Exemptions -- Use of tangible personal property
incorporated in prototype for aircraft parts, auxiliary equipment, and
aircraft modification -- Limitations on yearly exemption) and 2003 c 168
s 209, 1997 c 302 s 2, & 1996 c 247 s 5;
(33) RCW 82.12.02568 (Exemptions -- Use of carbon and similar
substances that become an ingredient or component of anodes or cathodes
used in producing aluminum for sale) and 1996 c 170 s 2;
(34) RCW 82.12.0267 (Exemptions -- Use of semen in artificial
insemination of livestock) and 1980 c 37 s 66;
(35) RCW 82.12.0268 (Exemptions -- Use of form lumber by persons
engaged in constructing, repairing, etc., structures for consumers) and
1980 c 37 s 67;
(36) RCW 82.12.02685 (Exemptions -- Use of tangible personal property
related to agricultural employee housing) and 1997 c 438 s 2 & 1996 c
117 s 2;
(37) RCW 82.12.0273 (Exemptions -- Use of pollen) and 1980 c 37 s 71;
(38) RCW 82.12.0283 (Exemptions -- Use of certain irrigation
equipment) and 1983 1st ex.s. c 55 s 6;
(39) RCW 82.12.0294 (Exemptions -- Use of feed for cultivating or
raising fish for sale) and 1985 c 148 s 4;
(40) RCW 82.12.0296 (Exemptions -- Use of feed consumed by livestock
at a public livestock market) and 1986 c 265 s 2;
(41) RCW 82.12.0298 (Exemptions -- Use of diesel fuel in operating
watercraft in commercial deep sea fishing or commercial passenger
fishing boat operations outside the state) and 1987 c 494 s 2;
(42) RCW 82.12.0311 (Exemptions -- Use of materials and supplies in
packing horticultural products) and 1988 c 68 s 2;
(43) RCW 82.12.0315 (Exemptions -- Rental or sales related to motion
picture or video productions -- Exceptions) and 2009 c 535 s 614, 2003 c
5 s 10, & 1995 2nd sp.s. c 5 s 2;
(44) RCW 82.12.038 (Exemptions -- Vehicle battery core deposits or
credits -- Replacement vehicle tire fees -- "Core deposits or credits"
defined) and 1989 c 431 s 46;
(45) RCW 82.12.806 (Exemptions -- Use of computer equipment parts and
services by printer or publisher) and 2004 c 8 s 3;
(46) RCW 82.12.807 (Exemptions -- Direct mail delivery charges) and
2005 c 514 s 116;
(47) RCW 82.12.810 (Exemptions -- Air pollution control facilities at
a thermal electric generation facility -- Exceptions -- Payments on
cessation of operation) and 2003 c 5 s 12 & 1997 c 368 s 3;
(48) RCW 82.12.820 (Exemptions -- Warehouse and grain elevators and
distribution centers) and 2006 c 354 s 13, 2005 c 513 s 12, 2003 c 5 s
13, 2000 c 103 s 9, & 1997 c 450 s 3;
(49) RCW 82.12.855 (Exemptions -- Replacement parts for qualifying
farm machinery and equipment) and 2007 c 332 s 2 & 2006 c 172 s 2;
(50) RCW 82.12.865 (Exemptions--Diesel, biodiesel, and aircraft
fuel for farm fuel users) and 2010 c 106 s 222, 2007 c 443 s 2, & 2006
c 7 s 2;
(51) RCW 82.12.880 (Exemptions -- Animal pharmaceuticals) and 2001
2nd sp.s. c 17 s 2;
(52) RCW 82.12.890 (Exemptions -- Livestock nutrient management
equipment and facilities) and 2010 1st sp.s. c 23 s 602, 2009 c 469 s
602, 2006 c 151 s 3, 2003 c 5 s 15, & 2001 2nd sp.s. c 18 s 3;
(53) RCW 82.12.900 (Exemptions -- Anaerobic digesters) and 2006 c 151
s 5, 2003 c 5 s 16, & 2001 2nd sp.s. c 18 s 5;
(54) RCW 82.12.910 (Exemptions -- Propane or natural gas to heat
chicken structures) and 2001 2nd sp.s. c 25 s 4;
(55) RCW 82.12.920 (Exemptions -- Chicken bedding materials) and 2001
2nd sp.s. c 25 s 6;
(56) RCW 82.12.800 (Exemptions -- Uses of vessel, vessel's trailer by
manufacturer) and 2011 c 171 s 121 & 1997 c 293 s 1;
(57) RCW 82.12.801 (Exemptions -- Uses of vessel, vessel's trailer by
dealer) and 2011 c 171 s 122 & 1997 c 293 s 2;
(58) RCW 82.12.802 (Vessels held in inventory by dealer or
manufacturer -- Tax on personal use -- Documentation -- Rules) and 1997 c 293
s 3;
(59) RCW 82.12.860 (Exemptions -- Property and services acquired from
a federal credit union) and 2009 c 535 s 621 & 2006 c 11 s 1;
(60) RCW 82.66.040 (Repayment schedule -- Interest, penalties) and
1998 c 339 s 1 & 1995 c 352 s 4;
(61) RCW 82.08.850 (Exemptions -- Conifer seed) and 2001 c 129 s 2;
(62) RCW 82.12.850 (Exemptions -- Conifer seed) and 2001 c 129 s 3;
(63) RCW 82.12.02085 (Exemptions -- Digital goods -- Noncommercial--Internal audience -- Not for sale) and 2009 c 535 s 605;
(64) RCW 82.08.0282 (Exemptions -- Sales of returnable containers for
beverages and foods) and 1980 c 37 s 47;
(65) RCW 82.08.0269 (Exemptions -- Sales for use in states,
territories, and possessions of the United States which are not
contiguous to any other state) and 1980 c 37 s 36;
(66) RCW 82.08.0279 (Exemptions -- Renting or leasing of motor
vehicles and trailers to a nonresident for use in the transportation of
persons or property across state boundaries) and 1980 c 37 s 45;
(67) RCW 82.08.700 (Exemptions -- Vessels sold to nonresidents) and
2010 c 106 s 219 & 2007 c 22 s 1;
(68) RCW 82.12.700 (Exemptions -- Vessels sold to nonresidents) and
2007 c 22 s 2; and
(69) RCW 82.12.955 (Exemptions -- Use of machinery, equipment,
vehicles, and services related to biodiesel or E85 motor fuel) and 2007
c 309 s 5 & 2003 c 63 s 3.
NEW SECTION. Sec. 203 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2023:
(1) RCW 82.08.02537 (Exemptions -- Sales of academic transcripts) and
2009 c 535 s 508 & 1996 c 272 s 2;
(2) RCW 82.08.0289 (Exemptions -- Telephone, telecommunications, and
ancillary services) and 2007 c 6 s 1006, 2007 c 6 s 1005, 2002 c 67 s
6, & 1983 2nd ex.s. c 3 s 30;
(3) RCW 82.08.832 (Exemptions -- Sales of gun safes) and 1998 c 178
s 1;
(4) RCW 82.12.0347 (Exemptions -- Use of academic transcripts) and
2009 c 535 s 619 & 1996 c 272 s 3;
(5) RCW 82.12.832 (Exemptions -- Use of gun safes) and 1998 c 178 s
2;
(6) RCW 82.08.0205 (Exemptions -- Waste vegetable oil) and 2008 c 237
s 2;
(7) RCW 82.08.02082 (Exemptions -- Digital products or services--Ingredient or component -- Made available for free) and 2010 c 111 s 401
& 2009 c 535 s 503;
(8) RCW 82.08.9995 (Exemptions -- Restaurant employee meals) and 2011
c 55 s 2;
(9) RCW 82.12.9995 (Exemptions -- Restaurant employee meals) and 2011
c 55 s 3;
(10) RCW 82.12.0205 (Exemptions -- Waste vegetable oil) and 2008 c
237 s 3; and
(11) RCW 82.12.02082 (Exemptions -- Digital products or services--Made available for free to general public) and 2010 c 111 s 501 & 2009
c 535 s 603.
NEW SECTION. Sec. 204 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2025:
(1) RCW 82.08.0258 (Exemptions -- Sales to federal corporations
providing aid and relief) and 1980 c 37 s 26;
(2) RCW 82.08.02795 (Exemptions--Sales to free hospitals) and 1993
c 205 s 1;
(3) RCW 82.08.02805 (Exemptions -- Sales to qualifying blood, tissue,
or blood and tissue banks) and 2004 c 82 s 2 & 1995 2nd sp.s. c 9 s 4;
(4) RCW 82.08.02806 (Exemptions -- Sales of human blood, tissue,
organs, bodies, or body parts for medical research and quality control
testing) and 1996 c 141 s 1;
(5) RCW 82.08.02807 (Exemptions -- Sales to organ procurement
organization) and 2002 c 113 s 2;
(6) RCW 82.08.0283 (Exemptions -- Certain medical items) and 2007 c
6 s 1101, 2004 c 153 s 101, 2003 c 168 s 409, 2001 c 75 s 1, 1998 c 168
s 2, 1997 c 224 s 1, 1996 c 162 s 1, 1991 c 250 s 2, 1986 c 255 s 1,
1980 c 86 s 1, & 1980 c 37 s 48;
(7) RCW 82.08.02915 (Exemptions -- Sales used by health or social
welfare organizations for alternative housing for youth in crisis) and
1998 c 183 s 1, 1997 c 386 s 56, & 1995 c 346 s 1;
(8) RCW 82.08.0299 (Exemptions -- Emergency lodging for homeless
persons -- Conditions) and 1988 c 61 s 1;
(9) RCW 82.08.803 (Exemptions -- Nebulizers) and 2007 c 6 s 1103 &
2004 c 153 s 104;
(10) RCW 82.08.804 (Exemptions -- Ostomic items) and 2004 c 153 s
106;
(11) RCW 82.08.808 (Exemptions -- Sales of medical supplies,
chemicals, or materials to comprehensive cancer centers) and 2005 c 514
s 402;
(12) RCW 82.08.925 (Exemptions -- Dietary supplements) and 2003 c 168
s 302;
(13) RCW 82.08.935 (Exemptions -- Disposable devices used to deliver
prescription drugs for human use) and 2003 c 168 s 404;
(14) RCW 82.08.940 (Exemptions -- Over-the-counter drugs for human
use) and 2003 c 168 s 405;
(15) RCW 82.08.945 (Exemptions -- Kidney dialysis devices) and 2004
c 153 s 110 & 2003 c 168 s 410;
(16) RCW 82.08.997 (Exemptions -- Temporary medical housing) and 2008
c 137 s 2;
(17) RCW 82.08.998 (Exemptions -- Weatherization of a residence) and
2008 c 92 s 1;
(18) RCW 82.12.0259 (Exemptions -- Use of personal property, digital
automated services, or certain other services by federal corporations
providing aid and relief) and 2009 c 535 s 613, 2003 c 5 s 7, & 1980 c
37 s 59;
(19) RCW 82.12.02745 (Exemptions--Use by free hospitals of certain
items) and 1993 c 205 s 2;
(20) RCW 82.12.02747 (Exemptions -- Use of medical products by
qualifying blood, tissue, or blood and tissue banks) and 2004 c 82 s 3
& 1995 2nd sp.s. c 9 s 5;
(21) RCW 82.12.02748 (Exemptions -- Use of human blood, tissue,
organs, bodies, or body parts for medical research or quality control
testing) and 1996 c 141 s 2;
(22) RCW 82.12.02749 (Exemptions -- Use of medical supplies,
chemicals, or materials by organ procurement organization) and 2002 c
113 s 3;
(23) RCW 82.12.0277 (Exemptions -- Certain medical items) and 2007 c
6 s 1102 & 2004 c 153 s 109;
(24) RCW 82.12.02915 (Exemptions -- Use of items by health or social
welfare organizations for alternative housing for youth in crisis) and
1998 c 183 s 2, 1997 c 386 s 57, & 1995 c 346 s 2;
(25) RCW 82.12.803 (Exemptions -- Nebulizers) and 2007 c 6 s 1104 &
2004 c 153 s 105;
(26) RCW 82.12.804 (Exemptions -- Ostomic items) and 2004 c 153 s
107;
(27) RCW 82.12.808 (Exemptions -- Use of medical supplies, chemicals,
or materials by comprehensive cancer centers) and 2005 c 514 s 403;
(28) RCW 82.12.925 (Exemptions -- Dietary supplements) and 2003 c 168
s 304;
(29) RCW 82.12.935 (Exemptions -- Disposable devices used to deliver
prescription drugs for human use) and 2003 c 168 s 407;
(30) RCW 82.12.940 (Exemptions -- Over-the-counter drugs for human
use) and 2003 c 168 s 408;
(31) RCW 82.12.945 (Exemptions -- Kidney dialysis devices) and 2004
c 153 s 111 & 2003 c 168 s 411; and
(32) RCW 82.12.998 (Exemptions -- Weatherization of a residence) and
2008 c 92 s 2.
Sec. 205 RCW 82.04.050 and 2011 c 174 s 202 are each amended to
read as follows:
(1)(a) "Sale at retail" or "retail sale" means every sale of
tangible personal property (including articles produced, fabricated, or
imprinted) to all persons irrespective of the nature of their business
and including, among others, without limiting the scope hereof, persons
who install, repair, clean, alter, improve, construct, or decorate real
or personal property of or for consumers other than a sale to a person
who:
(i) Purchases for the purpose of resale as tangible personal
property in the regular course of business without intervening use by
such person, but a purchase for the purpose of resale by a regional
transit authority under RCW 81.112.300 is not a sale for resale; or
(ii) Installs, repairs, cleans, alters, imprints, improves,
constructs, or decorates real or personal property of or for consumers,
if such tangible personal property becomes an ingredient or component
of such real or personal property without intervening use by such
person; or
(iii) Purchases for the purpose of consuming the property purchased
in producing for sale as a new article of tangible personal property or
substance, of which such property becomes an ingredient or component or
is a chemical used in processing, when the primary purpose of such
chemical is to create a chemical reaction directly through contact with
an ingredient of a new article being produced for sale; or
(iv) Until July 1, 2021, purchases for the purpose of consuming the
property purchased in producing ferrosilicon which is subsequently used
in producing magnesium for sale, if the primary purpose of such
property is to create a chemical reaction directly through contact with
an ingredient of ferrosilicon; or
(v) Purchases for the purpose of providing the property to
consumers as part of competitive telephone service, as defined in RCW
82.04.065; or
(vi) Purchases for the purpose of satisfying the person's
obligations under an extended warranty as defined in subsection (7) of
this section, if such tangible personal property replaces or becomes an
ingredient or component of property covered by the extended warranty
without intervening use by such person.
(b) The term includes every sale of tangible personal property that
is used or consumed or to be used or consumed in the performance of any
activity defined as a "sale at retail" or "retail sale" even though
such property is resold or used as provided in (a)(i) through (vi) of
this subsection following such use.
(c) The term also means every sale of tangible personal property to
persons engaged in any business that is taxable under RCW 82.04.280(1)
(a), (b), and (g), 82.04.290, and 82.04.2908.
(2) The term "sale at retail" or "retail sale" includes the sale of
or charge made for tangible personal property consumed and/or for labor
and services rendered in respect to the following:
(a) The installing, repairing, cleaning, altering, imprinting, or
improving of tangible personal property of or for consumers, including
charges made for the mere use of facilities in respect thereto, but
excluding, until July 1, 2023, charges made for the use of self-service
laundry facilities, and until July 1, 2017, also excluding sales of
laundry service to nonprofit health care facilities, and excluding,
until July 1, 2021, services rendered in respect to live animals, birds
and insects;
(b) The constructing, repairing, decorating, or improving of new or
existing buildings or other structures under, upon, or above real
property of or for consumers, including the installing or attaching of
any article of tangible personal property therein or thereto, whether
or not such personal property becomes a part of the realty by virtue of
installation, and also includes the sale of services or charges made
for the clearing of land and the moving of earth excepting the mere
leveling of land used in commercial farming or agriculture;
(c) The constructing, repairing, or improving of any structure
upon, above, or under any real property owned by an owner who conveys
the property by title, possession, or any other means to the person
performing such construction, repair, or improvement for the purpose of
performing such construction, repair, or improvement and the property
is then reconveyed by title, possession, or any other means to the
original owner;
(d) The cleaning, fumigating, razing, or moving of existing
buildings or structures, but until July 1, 2017, does not include the
charge made for janitorial services; and for purposes of this section
the term "janitorial services" means those cleaning and caretaking
services ordinarily performed by commercial janitor service businesses
including, but not limited to, wall and window washing, floor cleaning
and waxing, and the cleaning in place of rugs, drapes and upholstery.
The term "janitorial services" does not include painting, papering,
repairing, furnace or septic tank cleaning, snow removal or
sandblasting;
(e) Automobile towing and similar automotive transportation
services, but not in respect to those required to report and pay taxes
under chapter 82.16 RCW;
(f) The furnishing of lodging and all other services by a hotel,
rooming house, tourist court, motel, trailer camp, and the granting of
any similar license to use real property, as distinguished from the
renting or leasing of real property, and it is presumed that the
occupancy of real property for a continuous period of one month or more
constitutes a rental or lease of real property and not a mere license
to use or enjoy the same. For the purposes of this subsection, it is
presumed that the sale of and charge made for the furnishing of lodging
for a continuous period of one month or more to a person is a rental or
lease of real property and not a mere license to enjoy the same;
(g) The installing, repairing, altering, or improving of digital
goods for consumers;
(h) Persons taxable under (a), (b), (c), (d), (e), (f), and (g) of
this subsection when such sales or charges are for property, labor and
services which are used or consumed in whole or in part by such persons
in the performance of any activity defined as a "sale at retail" or
"retail sale" even though such property, labor and services may be
resold after such use or consumption. Nothing contained in this
subsection may be construed to modify subsection (1) of this section
and nothing contained in subsection (1) of this section may be
construed to modify this subsection.
(3) The term "sale at retail" or "retail sale" includes the sale of
or charge made for personal, business, or professional services
including amounts designated as interest, rents, fees, admission, and
other service emoluments however designated, received by persons
engaging in the following business activities:
(a) Amusement and recreation services including but not limited to
golf, pool, billiards, skating, bowling, ski lifts and tows, day trips
for sightseeing purposes, and others, when provided to consumers;
(b) Abstract, title insurance, and escrow services;
(c) Credit bureau services;
(d) Automobile parking and storage garage services;
(e) Landscape maintenance and horticultural services but excluding,
until July 1, 2021, (i) horticultural services provided to farmers and
(ii) pruning, trimming, repairing, removing, and clearing of trees and
brush near electric transmission or distribution lines or equipment, if
performed by or at the direction of an electric utility;
(f) Service charges associated with tickets to professional
sporting events; and
(g) The following personal services: Physical fitness services,
tanning salon services, tattoo parlor services, steam bath services,
turkish bath services, escort services, and dating services.
(4)(a) The term also includes the renting or leasing of tangible
personal property to consumers.
(b) The term does not include the renting or leasing of tangible
personal property where the lease or rental is for the purpose of
sublease or subrent.
(5) The term also includes the providing of "competitive telephone
service," "telecommunications service," or "ancillary services," as
those terms are defined in RCW 82.04.065, to consumers.
(6)(a)(i) The term also includes the sale of prewritten computer
software to a consumer, regardless of the method of delivery to the end
user. For purposes of this subsection (6)(a), the sale of prewritten
computer software includes the sale of or charge made for a key or an
enabling or activation code, where the key or code is required to
activate prewritten computer software and put the software into use.
There is no separate sale of the key or code from the prewritten
computer software, regardless of how the sale may be characterized by
the vendor or by the purchaser.
(ii) Until July 1, 2021 the term "retail sale" does not include the
sale of or charge made for:
(((i))) (A) Custom software; or
(((ii))) (B) The customization of prewritten computer software.
(b)(i) The term also includes the charge made to consumers for the
right to access and use prewritten computer software, where possession
of the software is maintained by the seller or a third party,
regardless of whether the charge for the service is on a per use, per
user, per license, subscription, or some other basis.
(ii)(A) The service described in (b)(i) of this subsection (6)
includes the right to access and use prewritten computer software to
perform data processing.
(B) For purposes of this subsection (6)(b)(ii), "data processing"
means the systematic performance of operations on data to extract the
required information in an appropriate form or to convert the data to
usable information. Data processing includes check processing, image
processing, form processing, survey processing, payroll processing,
claim processing, and similar activities.
(7) The term also includes the sale of or charge made for an
extended warranty to a consumer. For purposes of this subsection,
"extended warranty" means an agreement for a specified duration to
perform the replacement or repair of tangible personal property at no
additional charge or a reduced charge for tangible personal property,
labor, or both, or to provide indemnification for the replacement or
repair of tangible personal property, based on the occurrence of
specified events. The term "extended warranty" does not include an
agreement, otherwise meeting the definition of extended warranty in
this subsection, if no separate charge is made for the agreement and
the value of the agreement is included in the sales price of the
tangible personal property covered by the agreement. For purposes of
this subsection, "sales price" has the same meaning as in RCW
82.08.010.
(8)(a) The term also includes the following sales to consumers of
digital goods, digital codes, and digital automated services:
(i) Sales in which the seller has granted the purchaser the right
of permanent use;
(ii) Sales in which the seller has granted the purchaser a right of
use that is less than permanent;
(iii) Sales in which the purchaser is not obligated to make
continued payment as a condition of the sale; and
(iv) Sales in which the purchaser is obligated to make continued
payment as a condition of the sale.
(b) A retail sale of digital goods, digital codes, or digital
automated services under this subsection (8) includes any services
provided by the seller exclusively in connection with the digital
goods, digital codes, or digital automated services, whether or not a
separate charge is made for such services.
(c) For purposes of this subsection, "permanent" means perpetual or
for an indefinite or unspecified length of time. A right of permanent
use is presumed to have been granted unless the agreement between the
seller and the purchaser specifies or the circumstances surrounding the
transaction suggest or indicate that the right to use terminates on the
occurrence of a condition subsequent.
(9) The term also includes the charge made for providing tangible
personal property along with an operator for a fixed or indeterminate
period of time. A consideration of this is that the operator is
necessary for the tangible personal property to perform as designed.
For the purpose of this subsection (9), an operator must do more than
maintain, inspect, or set up the tangible personal property.
(10)(a) Until July 1, 2017, the term does not include the sale of
or charge made for labor and services rendered in respect to the
building, repairing, or improving of any street, place, road, highway,
easement, right-of-way, mass public transportation terminal or parking
facility, bridge, tunnel, or trestle which is owned by a municipal
corporation or political subdivision of the state or by the United
States and which is used or to be used primarily for foot or vehicular
traffic including mass transportation vehicles of any kind.
(b) The term does not include the sale of or charge made for labor
and services rendered in respect to the building, repairing, or
improving of any street, place, road, highway, easement, right-of-way,
mass public transportation terminal or parking facility, bridge,
tunnel, or trestle which is owned by the United States and which is
used or to be used primarily for foot or vehicular traffic including
mass transportation vehicles of any kind.
(11) Until July 1, 2017, the term also does not include sales of
chemical sprays or washes to persons for the purpose of postharvest
treatment of fruit for the prevention of scald, fungus, mold, or decay,
nor does it include sales of feed, seed, seedlings, fertilizer, agents
for enhanced pollination including insects such as bees, and spray
materials to: (a) Persons who participate in the federal conservation
reserve program, the environmental quality incentives program, the
wetlands reserve program, and the wildlife habitat incentives program,
or their successors administered by the United States department of
agriculture; (b) farmers for the purpose of producing for sale any
agricultural product; and (c) farmers acting under cooperative habitat
development or access contracts with an organization exempt from
federal income tax under 26 U.S.C. Sec. 501(c)(3) of the federal
internal revenue code or the Washington state department of fish and
wildlife to produce or improve wildlife habitat on land that the farmer
owns or leases.
(12)(a) Until July 1, 2019, the term does not include the sale of
or charge made for labor and services rendered in respect to the
constructing, repairing, decorating, or improving of new or existing
buildings or other structures under, upon, or above real property of or
for the United States, any instrumentality thereof, or a county or city
housing authority created pursuant to chapter 35.82 RCW, including the
installing, or attaching of any article of tangible personal property
therein or thereto, whether or not such personal property becomes a
part of the realty by virtue of installation. Nor does the term
include the sale of services or charges made for the clearing of land
and the moving of earth of or for the United States, any
instrumentality thereof, or a county or city housing authority. Nor
does the term include the sale of services or charges made for cleaning
up for the United States, or its instrumentalities, radioactive waste
and other by-products of weapons production and nuclear research and
development.
(b) The term does not include the sale of or charge made for labor
and services rendered in respect to the constructing, repairing,
decorating, or improving of new or existing buildings or other
structures under, upon, or above real property of or for the United
States or any instrumentality thereof, including the installing or
attaching of any article of tangible personal property therein or
thereto, whether or not such personal property becomes a part of the
realty by virtue of installation. Nor does the term include the sale
of services or charges made for the clearing of land and the moving of
earth of or for the United States or any instrumentality thereof. Nor
does the term include the sale of services or charges made for cleaning
up for the United States or its instrumentalities, radioactive waste
and other by-products of weapons production and nuclear research and
development.
(13) Until July 1, 2019, the term does not include the sale of or
charge made for labor, services, or tangible personal property pursuant
to agreements providing maintenance services for bus, rail, or rail
fixed guideway equipment when a regional transit authority is the
recipient of the labor, services, or tangible personal property, and a
transit agency, as defined in RCW 81.104.015, performs the labor or
services.
(14) The term does not include the sale for resale of any service
described in this section if the sale would otherwise constitute a
"sale at retail" and "retail sale" under this section.
Sec. 206 RCW 82.04.062 and 1985 c 471 s 5 are each amended to
read as follows:
(1) Until July 1, 2021, for purposes of this chapter, "wholesale
sale," "sale at wholesale," "retail sale," and "sale at retail" do not
include the sale of precious metal bullion or monetized bullion.
(2) Until July 1, 2021, in computing tax under this chapter on the
business of making sales of precious metal bullion or monetized
bullion, the tax ((shall be)) is imposed on the amounts received as
commissions upon transactions for the accounts of customers over and
above the amount paid to other dealers associated in such transactions,
but no deduction or offset is allowed on account of salaries or
commissions paid to salesmen or other employees.
(3) For purposes of this section, "precious metal bullion" means
any precious metal which has been put through a process of smelting or
refining, including, but not limited to, gold, silver, platinum,
rhodium, and palladium, and which is in such state or condition that
its value depends upon its contents and not upon its form. For
purposes of this section, "monetized bullion" means coins or other
forms of money manufactured from gold, silver, or other metals and
heretofore, now, or hereafter used as a medium of exchange under the
laws of this state, the United States, or any foreign nation, but does
not include coins or money sold to be manufactured into jewelry or
works of art.
Sec. 207 RCW 82.08.010 and 2010 c 106 s 210 are each amended to
read as follows:
For the purposes of this chapter:
(1)(a) "Selling price" includes "sales price." "Sales price" means
the total amount of consideration, ((except separately stated trade-in
property of like kind,)) including cash, credit, property, and
services, for which tangible personal property, extended warranties,
digital goods, digital codes, digital automated services, or other
services or anything else defined as a "retail sale" under RCW
82.04.050 are sold, leased, or rented, valued in money, whether
received in money or otherwise. No deduction from the total amount of
consideration is allowed for the following: (i) The seller's cost of
the property sold; (ii) the cost of materials used, labor or service
cost, interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller, and any other expense of the seller; (iii)
charges by the seller for any services necessary to complete the sale,
other than delivery and installation charges; (iv) delivery charges;
and (v) installation charges.
When tangible personal property is rented or leased under
circumstances that the consideration paid does not represent a
reasonable rental for the use of the articles so rented or leased, the
"selling price" shall be determined as nearly as possible according to
the value of such use at the places of use of similar products of like
quality and character under such rules as the department may prescribe;
(b) "Selling price" or "sales price" does not include: Discounts,
including cash, term, or coupons that are not reimbursed by a third
party that are allowed by a seller and taken by a purchaser on a sale;
interest, financing, and carrying charges from credit extended on the
sale of tangible personal property, extended warranties, digital goods,
digital codes, digital automated services, or other services or
anything else defined as a retail sale in RCW 82.04.050, if the amount
is separately stated on the invoice, bill of sale, or similar document
given to the purchaser; and any taxes legally imposed directly on the
consumer that are separately stated on the invoice, bill of sale, or
similar document given to the purchaser;
(c) "Selling price" or "sales price" includes consideration
received by the seller from a third party if:
(i) The seller actually receives consideration from a party other
than the purchaser, and the consideration is directly related to a
price reduction or discount on the sale;
(ii) The seller has an obligation to pass the price reduction or
discount through to the purchaser;
(iii) The amount of the consideration attributable to the sale is
fixed and determinable by the seller at the time of the sale of the
item to the purchaser; and
(iv) One of the criteria in this subsection (1)(c)(iv) is met:
(A) The purchaser presents a coupon, certificate, or other
documentation to the seller to claim a price reduction or discount
where the coupon, certificate, or documentation is authorized,
distributed, or granted by a third party with the understanding that
the third party will reimburse any seller to whom the coupon,
certificate, or documentation is presented;
(B) The purchaser identifies himself or herself to the seller as a
member of a group or organization entitled to a price reduction or
discount, however a "preferred customer" card that is available to any
patron does not constitute membership in such a group; or
(C) The price reduction or discount is identified as a third party
price reduction or discount on the invoice received by the purchaser or
on a coupon, certificate, or other documentation presented by the
purchaser;
(d) Until July 1, 2021, "selling price" or "sales price" does not
include separately stated trade-in property of like kind;
(2)(a) "Seller" means every person, including the state and its
departments and institutions, making sales at retail or retail sales to
a buyer, purchaser, or consumer, whether as agent, broker, or
principal, except "seller" does not mean:
(i) The state and its departments and institutions when making
sales to the state and its departments and institutions; or
(ii) A professional employer organization when a covered employee
coemployed with the client under the terms of a professional employer
agreement engages in activities that constitute a sale at retail that
is subject to the tax imposed by this chapter. In such cases, the
client, and not the professional employer organization, is deemed to be
the seller and is responsible for collecting and remitting the tax
imposed by this chapter.
(b) For the purposes of (a) of this subsection, the terms "client,"
"covered employee," "professional employer agreement," and
"professional employer organization" have the same meanings as in RCW
82.04.540;
(3) "Buyer," "purchaser," and "consumer" include, without limiting
the scope hereof, every individual, receiver, assignee, trustee in
bankruptcy, trust, estate, firm, copartnership, joint venture, club,
company, joint stock company, business trust, corporation, association,
society, or any group of individuals acting as a unit, whether mutual,
cooperative, fraternal, nonprofit, or otherwise, municipal corporation,
quasi municipal corporation, and also the state, its departments and
institutions and all political subdivisions thereof, irrespective of
the nature of the activities engaged in or functions performed, and
also the United States or any instrumentality thereof;
(4) "Delivery charges" means charges by the seller of personal
property or services for preparation and delivery to a location
designated by the purchaser of personal property or services including,
but not limited to, transportation, shipping, postage, handling,
crating, and packing;
(5) "Direct mail" means printed material delivered or distributed
by United States mail or other delivery service to a mass audience or
to addressees on a mailing list provided by the purchaser or at the
direction of the purchaser when the cost of the items are not billed
directly to the recipients. "Direct mail" includes tangible personal
property supplied directly or indirectly by the purchaser to the direct
mail seller for inclusion in the package containing the printed
material. "Direct mail" does not include multiple items of printed
material delivered to a single address;
(6) The meaning attributed in chapter 82.04 RCW to the terms "tax
year," "taxable year," "person," "company," "sale," "sale at
wholesale," "wholesale," "business," "engaging in business," "cash
discount," "successor," "consumer," "in this state" and "within this
state" applies equally to the provisions of this chapter;
(7) For the purposes of the taxes imposed under this chapter and
under chapter 82.12 RCW, "tangible personal property" means personal
property that can be seen, weighed, measured, felt, or touched, or that
is in any other manner perceptible to the senses. Tangible personal
property includes electricity, water, gas, steam, and prewritten
computer software;
(8) "Extended warranty" has the same meaning as in RCW
82.04.050(7);
(9) The definitions in RCW 82.04.192 apply to this chapter;
(10) For the purposes of the taxes imposed under this chapter and
chapter 82.12 RCW, whenever the terms "property" or "personal property"
are used, those terms must be construed to include digital goods and
digital codes unless:
(a) It is clear from the context that the term "personal property"
is intended only to refer to tangible personal property;
(b) It is clear from the context that the term "property" is
intended only to refer to tangible personal property, real property, or
both; or
(c) To construe the term "property" or "personal property" as
including digital goods and digital codes would yield unlikely, absurd,
or strained consequences; and
(11) "Retail sale" or "sale at retail" means any sale, lease, or
rental for any purpose other than for resale, sublease, or subrent.
Sec. 208 RCW 82.12.010 and 2010 c 127 s 4 are each reenacted and
amended to read as follows:
For the purposes of this chapter:
(1) The meaning ascribed to words and phrases in chapters 82.04 and
82.08 RCW, insofar as applicable, has full force and effect with
respect to taxes imposed under the provisions of this chapter.
"Consumer," in addition to the meaning ascribed to it in chapters 82.04
and 82.08 RCW insofar as applicable, also means any person who
distributes or displays, or causes to be distributed or displayed, any
article of tangible personal property, except newspapers, the primary
purpose of which is to promote the sale of products or services. With
respect to property distributed to persons within this state by a
consumer as defined in this subsection (1), the use of the property is
deemed to be by such consumer.
(2) "Extended warranty" has the same meaning as in RCW
82.04.050(7).
(3) "Purchase price" means the same as sales price as defined in
RCW 82.08.010.
(4)(a)(i) Except as provided in (a)(ii) of this subsection (4),
"retailer" means every seller as defined in RCW 82.08.010 and every
person engaged in the business of selling tangible personal property at
retail and every person required to collect from purchasers the tax
imposed under this chapter.
(ii) "Retailer" does not include a professional employer
organization when a covered employee coemployed with the client under
the terms of a professional employer agreement engages in activities
that constitute a sale of tangible personal property, extended
warranty, digital good, digital code, or a sale of any digital
automated service or service defined as a retail sale in RCW 82.04.050
(2)(a) or (g), (3)(a), or (6)(b) that is subject to the tax imposed by
this chapter. In such cases, the client, and not the professional
employer organization, is deemed to be the retailer and is responsible
for collecting and remitting the tax imposed by this chapter.
(b) For the purposes of (a) of this subsection, the terms "client,"
"covered employee," "professional employer agreement," and
"professional employer organization" have the same meanings as in RCW
82.04.540.
(5) "Taxpayer" and "purchaser" include all persons included within
the meaning of the word "buyer" and the word "consumer" as defined in
chapters 82.04 and 82.08 RCW.
(6) "Use," "used," "using," or "put to use" have their ordinary
meaning, and mean:
(a) With respect to tangible personal property, except for natural
gas and manufactured gas, the first act within this state by which the
taxpayer takes or assumes dominion or control over the article of
tangible personal property (as a consumer), and include installation,
storage, withdrawal from storage, distribution, or any other act
preparatory to subsequent actual use or consumption within this state;
(b) With respect to a service defined in RCW 82.04.050(2)(a), the
first act within this state after the service has been performed by
which the taxpayer takes or assumes dominion or control over the
article of tangible personal property upon which the service was
performed (as a consumer), and includes installation, storage,
withdrawal from storage, distribution, or any other act preparatory to
subsequent actual use or consumption of the article within this state;
(c) With respect to an extended warranty, the first act within this
state after the extended warranty has been acquired by which the
taxpayer takes or assumes dominion or control over the article of
tangible personal property to which the extended warranty applies, and
includes installation, storage, withdrawal from storage, distribution,
or any other act preparatory to subsequent actual use or consumption of
the article within this state;
(d) With respect to a digital good or digital code, the first act
within this state by which the taxpayer, as a consumer, views,
accesses, downloads, possesses, stores, opens, manipulates, or
otherwise uses or enjoys the digital good or digital code;
(e) With respect to a digital automated service, the first act
within this state by which the taxpayer, as a consumer, uses, enjoys,
or otherwise receives the benefit of the service;
(f) With respect to a service defined as a retail sale in RCW
82.04.050(6)(b), the first act within this state by which the taxpayer,
as a consumer, accesses the prewritten computer software;
(g) With respect to a service defined as a retail sale in RCW
82.04.050(2)(g), the first act within this state after the service has
been performed by which the taxpayer, as a consumer, views, accesses,
downloads, possesses, stores, opens, manipulates, or otherwise uses or
enjoys the digital good upon which the service was performed; and
(h) With respect to natural gas or manufactured gas, the use of
which is taxable under RCW 82.12.022, including gas that is also
taxable under the authority of RCW 82.14.230, the first act within this
state by which the taxpayer consumes the gas by burning the gas or
storing the gas in the taxpayer's own facilities for later consumption
by the taxpayer.
(7)(a) "Value of the article used" is the purchase price for the
article of tangible personal property, the use of which is taxable
under this chapter. The term also includes, in addition to the
purchase price, the amount of any tariff or duty paid with respect to
the importation of the article used. In case the article used is
acquired by lease or by gift or is extracted, produced, or manufactured
by the person using the same or is sold under conditions wherein the
purchase price does not represent the true value thereof, the value of
the article used is determined as nearly as possible according to the
retail selling price at place of use of similar products of like
quality and character under such rules as the department may prescribe.
(b) In case the articles used are acquired by bailment, the value
of the use of the articles so used must be in an amount representing a
reasonable rental for the use of the articles so bailed, determined as
nearly as possible according to the value of such use at the places of
use of similar products of like quality and character under such rules
as the department of revenue may prescribe. In case any such articles
of tangible personal property are used in respect to the construction,
repairing, decorating, or improving of, and which become or are to
become an ingredient or component of, new or existing buildings or
other structures under, upon, or above real property of or for the
United States, any instrumentality thereof, or a county or city housing
authority created pursuant to chapter 35.82 RCW, including the
installing or attaching of any such articles therein or thereto,
whether or not such personal property becomes a part of the realty by
virtue of installation, then the value of the use of such articles so
used is determined according to the retail selling price of such
articles, or in the absence of such a selling price, as nearly as
possible according to the retail selling price at place of use of
similar products of like quality and character or, in the absence of
either of these selling price measures, such value may be determined
upon a cost basis, in any event under such rules as the department of
revenue may prescribe.
(c) Until July 1, 2021, in the case of articles owned by a user
engaged in business outside the state which are brought into the state
for no more than one hundred eighty days in any period of three hundred
sixty-five consecutive days and which are temporarily used for business
purposes by the person in this state, the value of the article used
must be an amount representing a reasonable rental for the use of the
articles, unless the person has paid tax under this chapter or chapter
82.08 RCW upon the full value of the article used, as defined in (a) of
this subsection.
(d) In the case of articles manufactured or produced by the user
and used in the manufacture or production of products sold or to be
sold to the department of defense of the United States, the value of
the articles used is determined according to the value of the
ingredients of such articles.
(e) In the case of an article manufactured or produced for purposes
of serving as a prototype for the development of a new or improved
product, the value of the article used is determined by: (i) The
retail selling price of such new or improved product when first offered
for sale; or (ii) the value of materials incorporated into the
prototype in cases in which the new or improved product is not offered
for sale.
(f) In the case of an article purchased with a direct pay permit
under RCW 82.32.087, the value of the article used is determined by the
purchase price of such article if, but for the use of the direct pay
permit, the transaction would have been subject to sales tax.
(8) "Value of the digital good or digital code used" means the
purchase price for the digital good or digital code, the use of which
is taxable under this chapter. If the digital good or digital code is
acquired other than by purchase, the value of the digital good or
digital code must be determined as nearly as possible according to the
retail selling price at place of use of similar digital goods or
digital codes of like quality and character under rules the department
may prescribe.
(9) "Value of the extended warranty used" means the purchase price
for the extended warranty, the use of which is taxable under this
chapter. If the extended warranty is received by gift or under
conditions wherein the purchase price does not represent the true value
of the extended warranty, the value of the extended warranty used is
determined as nearly as possible according to the retail selling price
at place of use of similar extended warranties of like quality and
character under rules the department may prescribe.
(10) "Value of the service used" means the purchase price for the
digital automated service or other service, the use of which is taxable
under this chapter. If the service is received by gift or under
conditions wherein the purchase price does not represent the true value
thereof, the value of the service used is determined as nearly as
possible according to the retail selling price at place of use of
similar services of like quality and character under rules the
department may prescribe.
Sec. 209 RCW 82.66.020 and 1995 c 352 s 2 are each amended to
read as follows:
Application for deferral of taxes under this chapter ((shall)) must
be made to the department in a form and manner prescribed by the
department. The application ((shall)) must contain information
regarding the location of the investment project, estimated or actual
costs, time schedules for completion and operation, and other
information required by the department. The department ((shall)) must
rule on the application within sixty days. The department may not
accept applications for deferral of taxes under this chapter on or
after July 1, 2021.
NEW SECTION. Sec. 301 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2019:
(1) RCW 82.04.339 (Exemptions -- Day care provided by churches) and
1992 c 81 s 1;
(2) RCW 82.04.3395 (Exemptions -- Child care resource and referral
services by nonprofit organizations) and 1995 2nd sp.s. c 11 s 3;
(3) RCW 82.04.363 (Exemptions -- Camp or conference center -- Items
sold or furnished by nonprofit organization) and 2009 c 535 s 409 &
1997 c 388 s 1;
(4) RCW 82.04.3651 (Exemptions -- Amounts received by nonprofit
organizations for fund-raising activities) and 2010 c 106 s 208, 1999
c 358 s 3, & 1998 c 336 s 2;
(5) RCW 82.04.367 (Exemptions -- Nonprofit organizations that are
guarantee agencies, issue debt, or provide guarantees for student
loans) and 1998 c 324 s 1 & 1987 c 433 s 1;
(6) RCW 82.04.368 (Exemptions -- Nonprofit organizations -- Credit and
debt services) and 1993 c 390 s 1;
(7) RCW 82.04.380 (Exemptions -- Certain corporations furnishing aid
and relief) and 1961 c 15 s 82.04.380;
(8) RCW 82.04.385 (Exemptions -- Operation of sheltered workshops)
and 1988 c 176 s 915, 1988 c 13 s 1, 1972 ex.s. c 134 s 1, & 1970 ex.s.
c 81 s 3;
(9) RCW 82.04.395 (Exemptions -- Certain materials printed in school
district and educational service district printing facilities) and 1979
ex.s. c 196 s 12;
(10) RCW 82.04.397 (Exemptions -- Certain materials printed in
county, city, or town printing facilities) and 1979 ex.s. c 196 s 14;
(11) RCW 82.04.399 (Exemptions -- Sales of academic transcripts) and
1996 c 272 s 1;
(12) RCW 82.04.408 (Exemptions -- Housing finance commission) and
1983 c 161 s 25;
(13) RCW 82.04.415 (Exemptions -- Sand, gravel and rock taken from
county or city pits or quarries, processing and handling costs) and
1965 ex.s. c 173 s 10;
(14) RCW 82.04.418 (Exemptions -- Grants by United States government
to municipal corporations or political subdivisions) and 1983 1st ex.s.
c 66 s 2;
(15) RCW 82.04.419 (Exemptions -- County, city, town, school
district, or fire district activity) and 1983 1st ex.s. c 66 s 3;
(16) RCW 82.04.4201 (Exemptions -- Sales/leasebacks by regional
transit authorities) and 2000 2nd sp.s. c 4 s 24;
(17) RCW 82.04.4251 (Exemptions -- Convention and tourism promotion)
and 2006 c 310 s 1;
(18) RCW 82.04.4291 (Deductions -- Compensation received by a
political subdivision from another political subdivision for services
taxable under RCW 82.04.290) and 1980 c 37 s 11;
(19) RCW 82.04.4322 (Deductions -- Artistic or cultural
organization -- Compensation from United States, state, etc., for
artistic or cultural exhibitions, performances, or programs) and 1981
c 140 s 1;
(20) RCW 82.04.4324 (Deductions -- Artistic or cultural
organization -- Deduction for tax under RCW 82.04.240 -- Value of articles
for use in displaying art objects or presenting artistic or cultural
exhibitions, performances, or programs) and 1981 c 140 s 2;
(21) RCW 82.04.4326 (Deductions -- Artistic or cultural
organizations -- Tuition charges for attending artistic or cultural
education programs) and 1981 c 140 s 3;
(22) RCW 82.04.4327 (Deductions -- Artistic and cultural
organizations -- Income from business activities) and 1985 c 471 s 6;
(23) RCW 82.04.434 (Credit -- Public safety standards and testing)
and 1991 c 13 s 1;
(24) RCW 82.04.600 (Exemptions -- Materials printed in county, city,
town, school district, educational service district, library or library
district) and 1979 ex.s. c 266 s 8;
(25) RCW 82.04.615 (Exemptions -- Certain limited purpose public
corporations, commissions, and authorities) and 2007 c 381 s 1;
(26) RCW 82.04.335 (Exemptions -- Agricultural fairs) and 1965 ex.s.
c 145 s 1;
(27) RCW 82.04.338 (Exemptions -- Hop commodity commission or hop
commodity board business) and 1998 c 200 s 1;
(28) RCW 82.04.4271 (Deductions -- Membership fees and certain
service fees by nonprofit youth organization) and 1981 c 74 s 1;
(29) RCW 82.04.640 (Exemptions -- Washington vaccine association--Certain assessments received) and 2010 c 174 s 16;
(30) RCW 82.04.4275 (Deductions -- Child welfare services) and 2011
c 163 s 1;
(31) RCW 82.04.655 (Exemptions -- Joint municipal utility services
authorities) and 2011 c 258 s 11; and
(32) RCW 82.04.4274 (Deductions -- Nonprofit management companies--Personnel performing on-site functions) and 2011 1st sp.s. c 26 s 1.
NEW SECTION. Sec. 302 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2021:
(1) RCW 82.04.2907 (Tax on royalties) and 2010 1st sp.s. c 23 s
107, 2010 c 111 s 302, 2009 c 535 s 407, 2001 c 320 s 3, & 1998 c 331
s 1;
(2) RCW 82.04.298 (Tax on qualified grocery distribution
cooperatives) and 2011 c 2 s 204 (Initiative Measure No. 1107), 2010
1st sp.s. c 23 s 511, 2008 c 49 s 1, & 2001 1st sp.s. c 9 s 1;
(3) RCW 82.04.315 (Exemptions -- International banking facilities)
and 1982 c 95 s 7;
(4) RCW 82.04.317 (Exemptions -- Motor vehicle sales by manufacturers
at wholesale auctions to dealers) and 1997 c 4 s 1;
(5) RCW 82.04.331 (Exemptions -- Wholesale sales to farmers of seed
for planting, conditioning seed for planting owned by others) and 1998
c 170 s 2;
(6) RCW 82.04.332 (Exemptions -- Buying and selling at wholesale
unprocessed milk, wheat, oats, dry peas, dry beans, lentils, triticale,
canola, corn, rye, and barley) and 2007 c 131 s 1 & 1998 c 312 s 2;
(7) RCW 82.04.333 (Exemptions -- Small harvesters) and 2011 c 101 s
4, 2007 c 48 s 5, & 1990 c 141 s 1;
(8) RCW 82.04.334 (Exemptions -- Standing timber) and 2010 1st sp.s.
c 23 s 512 & 2007 c 48 s 3;
(9) RCW 82.04.337 (Exemptions -- Amounts received by hop growers or
dealers for processed hops shipped outside the state) and 1987 c 495 s
1;
(10) RCW 82.04.392 (Exemptions -- Mortgage brokers' third-party
provider services trust accounts) and 1998 c 311 s 3 & 1997 c 106 s 21;
(11) RCW 82.04.416 (Exemptions -- Operation of state route No. 16)
and 1998 c 179 s 3;
(12) RCW 82.04.421 (Exemptions -- Out-of-state membership sales in
discount programs) and 1997 c 408 s 1;
(13) RCW 82.04.422 (Exemptions -- Wholesale sales of motor vehicles)
and 2004 c 81 s 1 & 2001 c 258 s 1;
(14) RCW 82.04.425 (Exemptions -- Accommodation sales) and 1980 c 37
s 78, 1965 ex.s. c 173 s 9, & 1961 c 15 s 82.04.425;
(15) RCW 82.04.4261 (Exemptions -- Federal small business innovation
research program) and 2004 c 2 s 9;
(16) RCW 82.04.4262 (Exemptions -- Federal small business technology
transfer program) and 2004 c 2 s 10;
(17) RCW 82.04.4267 (Exemptions -- Operation of parking/business
improvement areas) and 2005 c 476 s 1;
(18) RCW 82.04.4294 (Deductions -- Interest on loans to farmers and
ranchers, producers or harvesters of aquatic products, or their
cooperatives) and 1980 c 37 s 14;
(19) RCW 82.04.4295 (Deductions -- Manufacturing activities completed
outside the United States) and 1980 c 37 s 15;
(20) RCW 82.04.4296 (Deductions -- Reimbursement for accommodation
expenditures by funeral homes) and 1980 c 37 s 16;
(21) RCW 82.04.433 (Deductions -- Sales of fuel for consumption
outside United States' waters by vessels in foreign commerce) and 2009
c 494 s 2 & 1985 c 471 s 16;
(22) RCW 82.04.4333 (Credit -- Job training services -- Approval) and
1996 c 1 s 4;
(23) RCW 82.04.4339 (Deductions -- Grants to support salmon
restoration) and 2004 c 241 s 1;
(24) RCW 82.04.4451 (Credit against tax due -- Maximum credit -- Table)
and 2010 1st sp.s. c 23 s 1102, 1997 c 238 s 2, & 1994 sp.s. c 2 s 1;
(25) RCW 82.04.447 (Credit -- Natural or manufactured gas purchased
by direct service industrial customers -- Reports) and 2001 c 214 s 9;
(26) RCW 82.04.4482 (Credit -- Sales of electricity or gas to an
aluminum smelter) and 2004 c 24 s 9;
(27) RCW 82.04.4486 (Credit -- Syrup taxes paid by buyer) and 2006 c
245 s 1;
(28) RCW 82.04.601 (Exemptions -- Affixing stamp services for
cigarette sales) and 2007 c 221 s 5;
(29) RCW 82.62.030 (Allowance of tax credits -- Limitations) and 2007
c 485 s 3, 2001 c 320 s 13, 1999 c 164 s 306, 1997 c 366 s 5, 1996 c 1
s 3, & 1986 c 116 s 17;
(30) RCW 82.04.2403 (Manufacturer tax not applicable to cleaning
fish) and 1994 c 167 s 1;
(31) RCW 82.04.424 (Exemptions -- Certain in-state activities) and
2003 c 76 s 2;
(32) RCW 82.04.4272 (Deductions -- Direct mail delivery charges) and
2005 c 514 s 114;
(33) RCW 82.04.43391 (Deductions -- Commercial aircraft loan interest
and fees) and 2010 1st sp.s. c 23 s 112;
(34) RCW 82.04.645 (Exemptions -- Financial institutions -- Amounts
received from certain affiliated persons) and 2011 c 174 s 102 & 2010
1st sp.s. c 23 s 110;
(35) RCW 82.04.650 (Exemptions -- Investment conduits and
securitization entities) and 2010 1st sp.s. c 23 s 111;
(36) RCW 82.04.263 (Tax on cleaning up radioactive waste and other
by-products of weapons production and nuclear research and development)
and 2009 c 469 s 202 & 1996 c 112 s 3;
(37) RCW 82.04.750 (Exemptions -- Restaurant employee meals) and 2011
c 55 s 1; and
(38) RCW 82.04.627 (Exemptions -- Commercial airplane parts) and 2008
c 81 s 15.
NEW SECTION. Sec. 303 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2023:
RCW 82.04.2905 (Tax on providing day care) and 1998 c 312 s 7.
NEW SECTION. Sec. 304 The following acts or parts of acts, as
now existing or hereafter amended, are each repealed, effective July 1,
2025:
(1) RCW 82.04.272 (Tax on warehousing and reselling prescription
drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
(2) RCW 82.04.2906 (Tax on certain chemical dependency services)
and 2003 c 343 s 1;
(3) RCW 82.04.2908 (Tax on provision of room and domiciliary care
to boarding home residents) and 2005 c 514 s 302 & 2004 c 174 s 1;
(4) RCW 82.04.324 (Exemptions -- Qualifying blood, tissue, or blood
and tissue banks) and 2004 c 82 s 1 & 1995 2nd sp.s. c 9 s 3;
(5) RCW 82.04.326 (Exemptions -- Qualified organ procurement
organizations) and 2002 c 113 s 1;
(6) RCW 82.04.327 (Exemptions -- Adult family homes) and 1987 1st
ex.s. c 4 s 1;
(7) RCW 82.04.355 (Exemptions -- Ride sharing) and 1999 c 358 s 8 &
1979 c 111 s 17;
(8) RCW 82.04.4263 (Exemptions -- Income received by the life
sciences discovery fund authority) and 2005 c 424 s 11;
(9) RCW 82.04.4264 (Exemptions -- Nonprofit boarding homes -- Room and
domiciliary care) and 2005 c 514 s 301;
(10) RCW 82.04.4265 (Exemptions -- Comprehensive cancer centers) and
2005 c 514 s 401;
(11) RCW 82.04.4297 (Deductions -- Compensation from public entities
for health or social welfare services -- Exception) and 2011 1st sp.s. c
19 s 2, 2002 c 314 s 3, 2001 2nd sp.s. c 23 s 2, 1988 c 67 s 1, & 1980
c 37 s 17;
(12) RCW 82.04.4311 (Deductions -- Compensation received under the
federal medicare program by certain hospitals or health centers) and
2005 c 86 s 1 & 2002 c 314 s 2;
(13) RCW 82.04.4337 (Deductions -- Certain amounts received by
boarding homes) and 2004 c 174 s 7;
(14) RCW 82.04.620 (Exemptions -- Certain prescription drugs) and
2007 c 447 s 1; and
(15) RCW 82.04.635 (Exemptions -- Nonprofits providing legal services
to low-income persons) and 2009 c 508 s 1.
Sec. 305 RCW 82.04.110 and 2009 c 535 s 405 are each amended to
read as follows:
(1) Except as otherwise provided in this section, "manufacturer"
means every person who, either directly or by contracting with others
for the necessary labor or mechanical services, manufactures for sale
or for commercial or industrial use from his or her own materials or
ingredients any articles, substances, or commodities.
(2)(a) When the owner of equipment or facilities furnishes, or
sells to the customer prior to manufacture, all or a portion of the
materials that become a part or whole of the manufactured article, the
department ((shall)) must prescribe equitable rules for determining tax
liability.
(b) Until July 1, 2021, a person who produces aluminum master
alloys is a processor for hire rather than a manufacturer, regardless
of the portion of the aluminum provided by that person's customer. For
the purposes of this subsection (2)(b), "aluminum master alloy" means
an alloy registered with the aluminum association as a grain refiner or
a hardener alloy using the American national standards institute
designating system H35.3.
(3) A nonresident of this state who is the owner of materials
processed for it in this state by a processor for hire ((shall)) may
not be deemed to be engaged in business in this state as a manufacturer
because of the performance of such processing work for it in this
state.
(4) The owner of materials from which a nuclear fuel assembly is
made for it by a processor for hire ((shall)) is not be subject to tax
under this chapter as a manufacturer of the fuel assembly.
(5) For purposes of this section, the terms "articles,"
"substances," "materials," "ingredients," and "commodities" do not
include digital goods.
Sec. 306 RCW 82.04.120 and 2011 c 23 s 3 are each amended to read
as follows:
(1) "To manufacture" embraces all activities of a commercial or
industrial nature wherein labor or skill is applied, by hand or
machinery, to materials so that as a result thereof a new, different or
useful substance or article of tangible personal property is produced
for sale or commercial or industrial use, and includes:
(a) The production or fabrication of special made or custom made
articles;
(b) The production or fabrication of dental appliances, devices,
restorations, substitutes, or other dental laboratory products by a
dental laboratory or dental technician;
(c) Cutting, delimbing, and measuring of felled, cut, or taken
trees; and
(d) Crushing and/or blending of rock, sand, stone, gravel, or ore.
(2) "To manufacture" does not include:
(a) Conditioning of seed for use in planting; cubing hay or
alfalfa;
(b) Activities which consist of cutting, grading, or ice glazing
seafood which has been cooked, frozen, or canned outside this state;
(c) The growing, harvesting, or producing of agricultural products;
(d) Packing of agricultural products, including sorting, washing,
rinsing, grading, waxing, treating with fungicide, packaging, chilling,
or placing in controlled atmospheric storage;
(e) The production of digital goods;
(f) The production of computer software if the computer software is
delivered from the seller to the purchaser by means other than tangible
storage media, including the delivery by use of a tangible storage
media where the tangible storage media is not physically transferred to
the purchaser; and
(g) Any activity that is integral to any public service business as
defined in RCW 82.16.010 and with respect to which the gross income
associated with such activity: (i) Is subject to tax under chapter
82.16 RCW; or (ii) would be subject to tax under chapter 82.16 RCW if
such activity were conducted in this state or if not for an exemption
or deduction.
(3) Until July 1, 2021, with respect to wastewater treatment
facilities:
(a) "To manufacture" does not include the treatment of wastewater,
the production of reclaimed water, and the production of class B
biosolids; and
(b) "To manufacture" does include the production of class A or
exceptional quality biosolids, but only with respect to the processing
activities that occur after the biosolids have reached class B
standards.
Sec. 307 RCW 82.04.250 and 2010 1st sp.s. c 23 s 509 and 2010 1st
sp.s. c 23 s 508 are each reenacted and amended to read as follows:
(1) Upon every person engaging within this state in the business of
making sales at retail, except persons taxable as retailers under other
provisions of this chapter, as to such persons, the amount of tax with
respect to such business is equal to the gross proceeds of sales of the
business, multiplied by the rate of 0.471 percent until July 1, 2021,
and 0.484 percent thereafter.
(2) Upon every person engaging within this state in the business of
making sales at retail that are exempt from the tax imposed under
chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or
82.08.0263, except persons taxable under RCW 82.04.260(((10))) (11) or
subsection (3) of this section, as to such persons, the amount of tax
with respect to such business is equal to the gross proceeds of sales
of the business, multiplied by the rate of 0.484 percent.
(3) Until July 1, 2024, upon every person classified by the federal
aviation administration as a federal aviation regulation part 145
certificated repair station and that is engaging within this state in
the business of making sales at retail that are exempt from the tax
imposed under chapter 82.08 RCW by reason of RCW 82.08.0261,
82.08.0262, or 82.08.0263, as to such persons, the amount of tax with
respect to such business is equal to the gross proceeds of sales of the
business, multiplied by the rate of .2904 percent.
Sec. 308 RCW 82.04.257 and 2010 c 111 s 301 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section, upon
every person engaging within this state in the business of making sales
at retail or wholesale of digital goods, digital codes, digital
automated services, or services described in RCW 82.04.050 (2)(g) or
(6)(b), as to such persons, the amount of tax with respect to such
business is equal to the gross proceeds of sales of the business,
multiplied by the rate of 0.471 percent in the case of retail sales and
by the rate of 0.484 percent in the case of wholesale sales. Beginning
July 1, 2021, in the case of retail sales, the rate is 0.484 percent.
(2) Persons providing subscription television services or
subscription radio services are subject to tax under RCW 82.04.290(2)
on the gross income of the business received from providing such
services.
(3) For purposes of this section, a person is considered to be
engaging within this state in the business of making sales of digital
goods, digital codes, digital automated services, or services described
in RCW 82.04.050 (2)(g) or (6)(b), if the person makes sales of digital
goods, digital codes, digital automated services, or services described
in RCW 82.04.050 (2)(g) or (6)(b) and the sales are sourced to this
state under RCW 82.32.730 for sales tax purposes or would have been
sourced to this state under RCW 82.32.730 if the sale had been taxable
under chapter 82.08 RCW.
(4) A person subject to tax under this section is subject to the
mandatory electronic filing and payment requirements in RCW 82.32.080.
Sec. 309 RCW 82.04.260 and 2011 c 2 s 203 (Initiative Measure No.
1107) are each amended to read as follows:
(1) Until July 1, 2017, upon every person engaging within this
state in the business of manufacturing:
(a) Wheat into flour, barley into pearl barley, soybeans into
soybean oil, canola into canola oil, canola meal, or canola by-products, or sunflower seeds into sunflower oil; as to such persons the
amount of tax with respect to such business is equal to the value of
the flour, pearl barley, oil, canola meal, or canola by-product
manufactured, multiplied by the rate of 0.138 percent;
(b) Beginning July 1, 2012, and through June 30, 2017, seafood
products that remain in a raw, raw frozen, or raw salted state at the
completion of the manufacturing by that person; or selling manufactured
seafood products that remain in a raw, raw frozen, or raw salted state
at the completion of the manufacturing, to purchasers who transport in
the ordinary course of business the goods out of this state; as to such
persons the amount of tax with respect to such business is equal to the
value of the products manufactured or the gross proceeds derived from
such sales, multiplied by the rate of 0.138 percent. Sellers must keep
and preserve records for the period required by RCW 82.32.070
establishing that the goods were transported by the purchaser in the
ordinary course of business out of this state;
(c) Beginning July 1, 2012, and through June 30, 2017, dairy
products that as of September 20, 2001, are identified in 21 C.F.R.,
chapter 1, parts 131, 133, and 135, including by-products from the
manufacturing of the dairy products such as whey and casein; or selling
the same to purchasers who transport in the ordinary course of business
the goods out of state; as to such persons the tax imposed is equal to
the value of the products manufactured or the gross proceeds derived
from such sales multiplied by the rate of 0.138 percent. Sellers must
keep and preserve records for the period required by RCW 82.32.070
establishing that the goods were transported by the purchaser in the
ordinary course of business out of this state;
(d) ((Beginning)) From July 1, 2012, through June 30, 2017, fruits
or vegetables by canning, preserving, freezing, processing, or
dehydrating fresh fruits or vegetables, or selling at wholesale fruits
or vegetables manufactured by the seller by canning, preserving,
freezing, processing, or dehydrating fresh fruits or vegetables and
sold to purchasers who transport in the ordinary course of business the
goods out of this state; as to such persons the amount of tax with
respect to such business is equal to the value of the products
manufactured or the gross proceeds derived from such sales multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(e) Until July 1, 2009, alcohol fuel, biodiesel fuel, or biodiesel
feedstock, as those terms are defined in RCW 82.29A.135; as to such
persons the amount of tax with respect to the business is equal to the
value of alcohol fuel, biodiesel fuel, or biodiesel feedstock
manufactured, multiplied by the rate of 0.138 percent; and
(f) Until July 1, 2017, wood biomass fuel as defined in RCW
82.29A.135; as to such persons the amount of tax with respect to the
business is equal to the value of wood biomass fuel manufactured,
multiplied by the rate of 0.138 percent.
(2) Until July 1, 2021, upon every person engaging within this
state in the business of splitting or processing dried peas; as to such
persons the amount of tax with respect to such business is equal to the
value of the peas split or processed, multiplied by the rate of 0.138
percent.
(3) Until July 1, 2019, upon every nonprofit corporation and
nonprofit association engaging within this state in research and
development, as to such corporations and associations, the amount of
tax with respect to such activities is equal to the gross income
derived from such activities multiplied by the rate of 0.484 percent.
(4) Until July 1, 2017, upon every person engaging within this
state in the business of slaughtering, breaking and/or processing
perishable meat products and/or selling the same at wholesale only and
not at retail; as to such persons the tax imposed is equal to the gross
proceeds derived from such sales multiplied by the rate of 0.138
percent.
(5) Until July 1, 2021, upon every person engaging within this
state in the business of acting as a travel agent or tour operator; as
to such persons the amount of the tax with respect to such activities
is equal to the gross income derived from such activities multiplied by
the rate of 0.275 percent.
(6) Until July 1, 2021, upon every person engaging within this
state in business as an international steamship agent, international
customs house broker, international freight forwarder, vessel and/or
cargo charter broker in foreign commerce, and/or international air
cargo agent; as to such persons the amount of the tax with respect to
only international activities is equal to the gross income derived from
such activities multiplied by the rate of 0.275 percent.
(7) Until July 1, 2021, upon every person engaging within this
state in the business of stevedoring and associated activities
pertinent to the movement of goods and commodities in waterborne
interstate or foreign commerce; as to such persons the amount of tax
with respect to such business is equal to the gross proceeds derived
from such activities multiplied by the rate of 0.275 percent. Persons
subject to taxation under this subsection are exempt from payment of
taxes imposed by chapter 82.16 RCW for that portion of their business
subject to taxation under this subsection. Stevedoring and associated
activities pertinent to the conduct of goods and commodities in
waterborne interstate or foreign commerce are defined as all activities
of a labor, service or transportation nature whereby cargo may be
loaded or unloaded to or from vessels or barges, passing over, onto or
under a wharf, pier, or similar structure; cargo may be moved to a
warehouse or similar holding or storage yard or area to await further
movement in import or export or may move to a consolidation freight
station and be stuffed, unstuffed, containerized, separated or
otherwise segregated or aggregated for delivery or loaded on any mode
of transportation for delivery to its consignee. Specific activities
included in this definition are: Wharfage, handling, loading,
unloading, moving of cargo to a convenient place of delivery to the
consignee or a convenient place for further movement to export mode;
documentation services in connection with the receipt, delivery,
checking, care, custody and control of cargo required in the transfer
of cargo; imported automobile handling prior to delivery to consignee;
terminal stevedoring and incidental vessel services, including but not
limited to plugging and unplugging refrigerator service to containers,
trailers, and other refrigerated cargo receptacles, and securing ship
hatch covers.
(8) Upon every person engaging within this state in the business of
disposing of low-level waste, as defined in RCW 43.145.010; as to such
persons the amount of the tax with respect to such business is equal to
the gross income of the business, excluding any fees imposed under
chapter 43.200 RCW, multiplied by the rate of 3.3 percent.
If the gross income of the taxpayer is attributable to activities
both within and without this state, the gross income attributable to
this state must be determined in accordance with the methods of
apportionment required under RCW 82.04.460.
(9) Until July 1, 2021, upon every person engaging within this
state as an insurance producer or title insurance agent licensed under
chapter 48.17 RCW or a surplus line broker licensed under chapter 48.15
RCW; as to such persons, the amount of the tax with respect to such
licensed activities is equal to the gross income of such business
multiplied by the rate of 0.484 percent.
(10) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a
nonprofit corporation or by the state or any of its political
subdivisions, as to such persons, the amount of tax with respect to
such activities is equal to the gross income of the business multiplied
by the rate of ((0.75 percent through June 30, 1995, and)) 1.5 percent
((thereafter)).
(11)(a) Beginning October 1, 2005, upon every person engaging
within this state in the business of manufacturing commercial
airplanes, or components of such airplanes, or making sales, at retail
or wholesale, of commercial airplanes or components of such airplanes,
manufactured by the seller, as to such persons the amount of tax with
respect to such business is, in the case of manufacturers, equal to the
value of the product manufactured and the gross proceeds of sales of
the product manufactured, or in the case of processors for hire, equal
to the gross income of the business, multiplied by the rate of:
(i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
(ii) 0.2904 percent beginning July 1, 2007.
(b) Beginning July 1, 2008, upon every person who is not eligible
to report under the provisions of (a) of this subsection (11) and is
engaging within this state in the business of manufacturing tooling
specifically designed for use in manufacturing commercial airplanes or
components of such airplanes, or making sales, at retail or wholesale,
of such tooling manufactured by the seller, as to such persons the
amount of tax with respect to such business is, in the case of
manufacturers, equal to the value of the product manufactured and the
gross proceeds of sales of the product 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.
(c) For the purposes of this subsection (11), "commercial airplane"
and "component" have the same meanings as provided in RCW 82.32.550.
(d) In addition to all other requirements under this title, a
person reporting under the tax rate provided in this subsection (11)
must file a complete annual report with the department under RCW
82.32.534.
(e) This subsection (11) does not apply on and after July 1, 2024.
(12)(a) Until July 1, 2024, upon every person engaging within this
state in the business of extracting timber or extracting for hire
timber; as to such persons the amount of tax with respect to the
business is, in the case of extractors, equal to the value of products,
including by-products, extracted, or in the case of extractors for
hire, equal to the gross income of the business, multiplied by the rate
of 0.4235 percent from July 1, 2006, through June 30, 2007, and 0.2904
percent from July 1, 2007, through June 30, 2024.
(b) Until July 1, 2024, upon every person engaging within this
state in the business of manufacturing or processing for hire: (i)
Timber into timber products or wood products; or (ii) timber products
into other timber products or wood products; as to such persons the
amount of the tax with respect to the business is, in the case of
manufacturers, equal to the value of products, including by-products,
manufactured, or in the case of processors for hire, equal to the gross
income of the business, multiplied by the rate of 0.4235 percent from
July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1,
2007, through June 30, 2024.
(c) Until July 1, 2024, upon every person engaging within this
state in the business of selling at wholesale: (i) Timber extracted by
that person; (ii) timber products manufactured by that person from
timber or other timber products; or (iii) wood products manufactured by
that person from timber or timber products; as to such persons the
amount of the tax with respect to the business is equal to the gross
proceeds of sales of the timber, timber products, or wood products
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(d) Until July 1, 2024, upon every person engaging within this
state in the business of selling standing timber; as to such persons
the amount of the tax with respect to the business is equal to the
gross income of the business multiplied by the rate of 0.2904 percent.
For purposes of this subsection (12)(d), "selling standing timber"
means the sale of timber apart from the land, where the buyer is
required to sever the timber within thirty months from the date of the
original contract, regardless of the method of payment for the timber
and whether title to the timber transfers before, upon, or after
severance.
(e) For purposes of this subsection, the following definitions
apply:
(i) "Biocomposite surface products" means surface material products
containing, by weight or volume, more than fifty percent recycled paper
and that also use nonpetroleum-based phenolic resin as a bonding agent.
(ii) "Paper and paper products" means products made of interwoven
cellulosic fibers held together largely by hydrogen bonding. "Paper
and paper products" includes newsprint; office, printing, fine, and
pressure-sensitive papers; paper napkins, towels, and toilet tissue;
kraft bag, construction, and other kraft industrial papers; paperboard,
liquid packaging containers, containerboard, corrugated, and solid-fiber containers including linerboard and corrugated medium; and
related types of cellulosic products containing primarily, by weight or
volume, cellulosic materials. "Paper and paper products" does not
include books, newspapers, magazines, periodicals, and other printed
publications, advertising materials, calendars, and similar types of
printed materials.
(iii) "Recycled paper" means paper and paper products having fifty
percent or more of their fiber content that comes from postconsumer
waste. For purposes of this subsection (12)(e)(iii), "postconsumer
waste" means a finished material that would normally be disposed of as
solid waste, having completed its life cycle as a consumer item.
(iv) "Timber" means forest trees, standing or down, on privately or
publicly owned land. "Timber" does not include Christmas trees that
are cultivated by agricultural methods or short-rotation hardwoods as
defined in RCW 84.33.035.
(v) "Timber products" means:
(A) Logs, wood chips, sawdust, wood waste, and similar products
obtained wholly from the processing of timber, short-rotation hardwoods
as defined in RCW 84.33.035, or both;
(B) Pulp, including market pulp and pulp derived from recovered
paper or paper products; and
(C) Recycled paper, but only when used in the manufacture of
biocomposite surface products.
(vi) "Wood products" means paper and paper products; dimensional
lumber; engineered wood products such as particleboard, oriented strand
board, medium density fiberboard, and plywood; wood doors; wood
windows; and biocomposite surface products.
(f) Except for small harvesters as defined in RCW 84.33.035, a
person reporting under the tax rate provided in this subsection (12)
must file a complete annual survey with the department under RCW
82.32.585.
(13) Until July 1, 2021, upon every person engaging within this
state in inspecting, testing, labeling, and storing canned salmon owned
by another person, as to such persons, the amount of tax with respect
to such activities is equal to the gross income derived from such
activities multiplied by the rate of 0.484 percent.
(14)(a) Until July 1, 2021, upon every person engaging within this
state in the business of printing a newspaper, publishing a newspaper,
or both, the amount of tax on such business is equal to the gross
income of the business multiplied by the rate of 0.2904 percent.
(b) A person reporting under the tax rate provided in this
subsection (14) must file a complete annual report with the department
under RCW 82.32.534.
(15) Subsequent to the expiration of a tax rate under this section,
the activity is subject to the rate that would otherwise apply under
this chapter.
Sec. 310 RCW 82.04.280 and 2010 c 106 s 205 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business
of: (a) Printing materials other than newspapers, and of publishing
periodicals or magazines; (b) building, repairing or improving any
street, place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
which is owned by a municipal corporation or political subdivision of
the state or by the United States and which is used or to be used,
primarily for foot or vehicular traffic including mass transportation
vehicles of any kind and including any readjustment, reconstruction or
relocation of the facilities of any public, private or cooperatively
owned utility or railroad in the course of such building, repairing or
improving, the cost of which readjustment, reconstruction, or
relocation, is the responsibility of the public authority whose street,
place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
is being built, repaired or improved; (c) extracting for hire or
processing for hire, except persons taxable as extractors for hire or
processors for hire under another section of this chapter; (d)
operating a cold storage warehouse or storage warehouse, but not
including the rental of cold storage lockers; (e) representing and
performing services for fire or casualty insurance companies as an
independent resident managing general agent licensed under the
provisions of chapter 48.17 RCW; (f) radio and television broadcasting,
excluding network, national and regional advertising computed as a
standard deduction based on the national average thereof as annually
reported by the federal communications commission, or in lieu thereof
by itemization by the individual broadcasting station, and excluding
that portion of revenue represented by the out-of-state audience
computed as a ratio to the station's total audience as measured by the
100 micro-volt signal strength and delivery by wire, if any; (g)
engaging in activities which bring a person within the definition of
consumer contained in RCW 82.04.190(6); as to such persons, the amount
of tax on such business is equal to the gross income of the business
multiplied by the rate of 0.484 percent.
(2) For the purposes of this section, the following definitions
apply unless the context clearly requires otherwise.
(a) "Cold storage warehouse" means a storage warehouse used to
store fresh and/or frozen perishable fruits or vegetables, meat,
seafood, dairy products, or fowl, or any combination thereof, at a
desired temperature to maintain the quality of the product for orderly
marketing.
(b) "Storage warehouse" means a building or structure, or any part
thereof, in which goods, wares, or merchandise are received for storage
for compensation, except field warehouses, fruit warehouses, fruit
packing plants, warehouses licensed under chapter 22.09 RCW, public
garages storing automobiles, railroad freight sheds, docks and wharves,
and "self-storage" or "mini storage" facilities whereby customers have
direct access to individual storage areas by separate entrance.
"Storage warehouse" does not include a building or structure, or that
part of such building or structure, in which an activity taxable under
RCW 82.04.272 is conducted.
(c) "Periodical or magazine" means a printed publication, other
than a newspaper, issued regularly at stated intervals at least once
every three months, including any supplement or special edition of the
publication.
(3) The 0.484 percent tax rate applicable to subsection (1)(a), (d)
and (e) of this section does not apply on or after July 1, 2021.
(4) The 0.484 percent tax rate applicable to subsection (1)(f) of
this section does not apply on or after July 1, 2017.
Sec. 311 RCW 82.04.280 and 2010 c 106 s 206 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business
of: (a) Printing materials other than newspapers, and of publishing
periodicals or magazines; (b) building, repairing or improving any
street, place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
which is owned by a municipal corporation or political subdivision of
the state or by the United States and which is used or to be used,
primarily for foot or vehicular traffic including mass transportation
vehicles of any kind and including any readjustment, reconstruction or
relocation of the facilities of any public, private or cooperatively
owned utility or railroad in the course of such building, repairing or
improving, the cost of which readjustment, reconstruction, or
relocation, is the responsibility of the public authority whose street,
place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
is being built, repaired or improved; (c) extracting for hire or
processing for hire, except persons taxable as extractors for hire or
processors for hire under another section of this chapter; (d)
operating a cold storage warehouse or storage warehouse, but not
including the rental of cold storage lockers; (e) representing and
performing services for fire or casualty insurance companies as an
independent resident managing general agent licensed under the
provisions of chapter 48.17 RCW; (f) radio and television broadcasting,
excluding network, national and regional advertising computed as a
standard deduction based on the national average thereof as annually
reported by the federal communications commission, or in lieu thereof
by itemization by the individual broadcasting station, and excluding
that portion of revenue represented by the out-of-state audience
computed as a ratio to the station's total audience as measured by the
100 micro-volt signal strength and delivery by wire, if any; (g)
engaging in activities which bring a person within the definition of
consumer contained in RCW 82.04.190(6); as to such persons, the amount
of tax on such business is equal to the gross income of the business
multiplied by the rate of 0.484 percent.
(2) For the purposes of this section, the following definitions
apply unless the context clearly requires otherwise.
(a) "Cold storage warehouse" means a storage warehouse used to
store fresh and/or frozen perishable fruits or vegetables, meat,
seafood, dairy products, or fowl, or any combination thereof, at a
desired temperature to maintain the quality of the product for orderly
marketing.
(b) "Storage warehouse" means a building or structure, or any part
thereof, in which goods, wares, or merchandise are received for storage
for compensation, except field warehouses, fruit warehouses, fruit
packing plants, warehouses licensed under chapter 22.09 RCW, public
garages storing automobiles, railroad freight sheds, docks and wharves,
and "self-storage" or "mini storage" facilities whereby customers have
direct access to individual storage areas by separate entrance.
"Storage warehouse" does not include a building or structure, or that
part of such building or structure, in which an activity taxable under
RCW 82.04.272 is conducted.
(c) "Periodical or magazine" means a printed publication, other
than a newspaper, issued regularly at stated intervals at least once
every three months, including any supplement or special edition of the
publication.
(3) The 0.484 percent tax rate applicable to subsection (1)(a),
(d), (e), and (f) of this section does not apply on or after July 1,
2021.
Sec. 312 RCW 82.04.290 and 2011 c 174 s 101 are each amended to
read as follows:
(1) Until July 1, 2021, upon every person engaging within this
state in the business of providing international investment management
services, as to such persons, the amount of tax with respect to such
business ((shall be)) is equal to the gross income or gross proceeds of
sales of the business multiplied by a rate of 0.275 percent.
(2)(a) Upon every person engaging within this state in any business
activity other than or in addition to an activity taxed explicitly
under another section in this chapter or subsection (1) or (3) of this
section; as to such persons the amount of tax on account of such
activities ((shall be)) is equal to the gross income of the business
multiplied by the rate of 1.5 percent.
(b) This subsection (2) includes, among others, and without
limiting the scope hereof (whether or not title to materials used in
the performance of such business passes to another by accession,
confusion or other than by outright sale), persons engaged in the
business of rendering any type of service which does not constitute a
"sale at retail" or a "sale at wholesale." The value of advertising,
demonstration, and promotional supplies and materials furnished to an
agent by his or her principal or supplier to be used for informational,
educational, and promotional purposes ((shall)) is not ((be))
considered a part of the agent's remuneration or commission and
((shall)) is not ((be)) subject to taxation under this section.
(3)(a) Until July 1, 2024, upon every person engaging within this
state in the business of performing aerospace product development for
others, as to such persons, the amount of tax with respect to such
business ((shall be)) is equal to the gross income of the business
multiplied by a rate of 0.9 percent.
(b) "Aerospace product development" has the meaning as provided in
RCW 82.04.4461.
Sec. 313 RCW 82.62.020 and 2007 c 485 s 2 are each amended to
read as follows:
Application for tax credits under this chapter must be made within
ninety consecutive days after the first qualified employment position
is filled. The application ((shall)) must be made to the department in
a form and manner prescribed by the department. The application
((shall)) must contain information regarding the location of the
business project, the applicant's average employment, if any, at the
facility for the four consecutive full calendar quarters immediately
preceding the earlier of the calendar quarter during which the
application required by this section is submitted to the department or
the first qualified employment position is filled, estimated or actual
new employment related to the project, estimated or actual wages of
employees related to the project, estimated or actual costs, time
schedules for completion and operation, and other information required
by the department. The department ((shall)) must prescribe a method
for calculating a seasonal employer's average employment levels. The
department ((shall)) must rule on the application within sixty days.
The department may not accept applications after June 30, 2021.
Sec. 314 RCW 82.73.020 and 2005 c 514 s 903 are each amended to
read as follows:
(1) Application for tax credits under this chapter must be made to
the department before making a contribution to a program or the main
street trust fund. The application ((shall)) must be made to the
department in a form and manner prescribed by the department. The
application ((shall)) must contain information regarding the proposed
amount of contribution to a program or the main street trust fund, and
other information required by the department to determine eligibility
under chapter 514, Laws of 2005. The department ((shall)) must rule on
the application within forty-five days. Applications ((shall)) must be
approved on a first-come basis.
(2) The person must make the contribution described in the approved
application by the end of the calendar year in which the application is
approved to claim a credit allowed under RCW 82.73.030.
(3) The department ((shall)) may not accept any applications before
January 1, 2006, or after June 30, 2017.
Sec. 315 RCW 82.04.540 and 2006 c 301 s 1 are each amended to
read as follows:
(1) The provision of professional employer services by a
professional employer organization is taxable under RCW 82.04.290(2).
(2) Until July 1, 2021, a professional employer organization is
allowed a deduction from the gross income of the business derived from
performing professional employer services that is equal to the portion
of the fee charged to a client that represents the actual cost of wages
and salaries, benefits, workers' compensation, payroll taxes,
withholding, or other assessments paid to or on behalf of a covered
employee by the professional employer organization under a professional
employer agreement.
(3) For the purposes of this section, the following definitions
apply:
(a) "Client" means any person who enters into a professional
employer agreement with a professional employer organization. For
purposes of this subsection (3)(a), "person" has the same meaning as
"buyer" in RCW 82.08.010.
(b) "Coemployer" means either a professional employer organization
or a client.
(c) "Coemployment relationship" means a relationship which is
intended to be an ongoing relationship rather than a temporary or
project-specific one, wherein the rights, duties, and obligations of an
employer which arise out of an employment relationship have been
allocated between coemployers pursuant to a professional employer
agreement and applicable state law. In such a coemployment
relationship:
(i) The professional employer organization is entitled to enforce
only such employer rights and is subject to only those obligations
specifically allocated to the professional employer organization by the
professional employer agreement or applicable state law;
(ii) The client is entitled to enforce those rights and obligated
to provide and perform those employer obligations allocated to such
client by the professional employer agreement and applicable state law;
and
(iii) The client is entitled to enforce any right and obligated to
perform any obligation of an employer not specifically allocated to the
professional employer organization by the professional employer
agreement or applicable state law.
(d) "Covered employee" means an individual having a coemployment
relationship with a professional employer organization and a client who
meets all of the following criteria: (i) The individual has received
written notice of coemployment with the professional employer
organization, and (ii) the individual's coemployment relationship is
pursuant to a professional employer agreement. Individuals who are
officers, directors, shareholders, partners, and managers of the client
are covered employees to the extent the professional employer
organization and the client have expressly agreed in the professional
employer agreement that such individuals would be covered employees and
provided such individuals meet the criteria of this subsection and act
as operational managers or perform day-to-day operational services for
the client.
(e) "Professional employer agreement" means a written contract by
and between a client and a professional employer organization that
provides:
(i) For the coemployment of covered employees; and
(ii) For the allocation of employer rights and obligations between
the client and the professional employer organization with respect to
the covered employees.
(f) "Professional employer organization" means any person engaged
in the business of providing professional employer services. The
following ((shall)) are not ((be)) deemed to be professional employer
organizations or the providing of professional employer services for
purposes of this section:
(i) Arrangements wherein a person, whose principal business
activity is not entering into professional employer arrangements and
which does not hold itself out as a professional employer organization,
shares employees with a commonly owned company within the meaning of
((section)) 26 U.S.C. Sec. 414(b) and (c) of the internal revenue code
of 1986, as amended;
(ii) Independent contractor arrangements by which a person assumes
responsibility for the product produced or service performed by such
person or his or her agents and retains and exercises primary direction
and control over the work performed by the individuals whose services
are supplied under such arrangements; or
(iii) Providing staffing services.
(g) "Professional employer services" means the service of entering
into a coemployment relationship with a client in which all or a
majority of the employees providing services to a client or to a
division or work unit of a client are covered employees.
(h) "Staffing services" means services consisting of a person:
(i) Recruiting and hiring its own employees;
(ii) Finding other organizations that need the services of those
employees;
(iii) Assigning those employees on a temporary basis to perform
work at or services for the other organizations to support or
supplement the other organizations' workforces, or to provide
assistance in special work situations such as, but not limited to,
employee absences, skill shortages, seasonal workloads, or to perform
special assignments or projects, all under the direction and
supervision of the customer; and
(iv) Customarily attempting to reassign the employees to other
organizations when they finish each assignment.
NEW SECTION. Sec. 401 If section 311 of this act takes effect,
section 310 of this act expires on the date section 311 of this act
takes effect.