BILL REQ. #:  S-2820.1 

Read first time 04/14/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to a temporary sales and use tax rate increase to provide funding for essential government services; amending RCW 82.08.020; reenacting and amending RCW 82.08.064; creating a new section; providing an effective date; and declaring an emergency.

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

NEW SECTION.  Sec. 1   The legislature finds that the economic crisis has impacted the many Washington families which do not earn enough annually to keep pace with increasing health care, child care, and work-related expenses. The legislature further finds that revenues are insufficient to maintain necessary funding for education, public safety, health care, and safety net services for elderly, disabled, and vulnerable people during the unprecedented economic crisis in the 2011-2013 fiscal biennium. Therefore, it is the intent of the legislature to provide a means to stabilize revenue collections by imposing a temporary sales and use tax. It is also the legislature's intent to provide relief to lower-income working families in Washington in the form of a sales and use tax exemption.

Sec. 2   RCW 82.08.020 and 2010 c 106 s 212 are each amended to read as follows:
     (1) There is levied and collected a tax equal to six and five-tenths percent of the selling price on each retail sale in this state of:
     (a) Tangible personal property, unless the sale is specifically excluded from the RCW 82.04.050 definition of retail sale;
     (b) Digital goods, digital codes, and digital automated services, if the sale is included within the RCW 82.04.050 definition of retail sale;
     (c) Services, other than digital automated services, included within the RCW 82.04.050 definition of retail sale;
     (d) Extended warranties to consumers; and
     (e) Anything else, the sale of which is included within the RCW 82.04.050 definition of retail sale.
     (2) There is levied and collected an additional tax on each retail car rental, regardless of whether the vehicle is licensed in this state, equal to five and nine-tenths percent of the selling price. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (3) Beginning July 1, 2003, there is levied and collected an additional tax of three-tenths of one percent of the selling price on each retail sale of a motor vehicle in this state, other than retail car rentals taxed under subsection (2) of this section. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (4) For purposes of subsection (3) of this section, "motor vehicle" has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road and nonhighway vehicles as defined in RCW ((46.09.020)) 46.09.310, and snowmobiles as defined in RCW ((46.10.010)) 46.10.300.
     (5)(a) From June 1, 2011, until June 30, 2013, subject to (b) of this subsection (5), in addition to the tax imposed upon each retail sale under subsection (1) of this section, there is imposed a tax in an amount equal to one percent of the selling price.
     (b)(i) If the state's unemployment rate decreases to six and five-tenths percent for four continuous months, the rate of one percent under (a) of this subsection (5) is reduced to one-half of one percent.
     (ii) If the state's unemployment rate decreases to five percent for four continuous months, no additional tax may be imposed under (a) of this subsection (5).
     (6) Beginning on December 8, 2005, 0.16 percent of the taxes collected under subsection (1) of this section must be dedicated to funding comprehensive performance audits required under RCW 43.09.470. The revenue identified in this subsection must be deposited in the performance audits of government account created in RCW 43.09.475.
     (((6))) (7) The taxes imposed under this chapter apply to successive retail sales of the same property.
     (((7))) (8) The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

Sec. 3   RCW 82.08.064 and 2003 c 361 s 304 and 2003 c 168 s 205 are each reenacted and amended to read as follows:
     (1) A sales and use tax rate change under this chapter or chapter 82.12 RCW ((shall be)) is imposed (a) no sooner than seventy-five days after its enactment into law and (b) only on the first day of January, April, July, or October.
     (2) Subsection (1) of this section does not apply to the tax rate change in section 301, chapter 361, Laws of 2003 or section 2 of this act.
     (3)(a) A sales and use tax rate increase under this chapter or chapter 82.12 RCW imposed on services applies to the first billing period starting on or after the effective date of the increase.
     (b) A sales and use tax rate decrease under this chapter or chapter 82.12 RCW imposed on services applies to bills rendered on or after the effective date of the decrease.
     (c) For the purposes of this subsection (3), "services" means retail services such as installing and constructing and retail services such as telecommunications, but does not include services such as tattooing.

NEW SECTION.  Sec. 4   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect June 1, 2011.