BILL REQ. #: Z-1016.4
| State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 02/27/12. Referred to Committee on Ways & Means.
AN ACT Relating to making changes to the state business and occupation tax, which do not impact state revenues or municipal business and occupation taxes, by reducing state business and occupation tax classifications and making clarifications; amending RCW 82.04.060, 82.04.230, 82.04.260, 82.04.280, 82.04.285, 82.04.290, 82.04.29002, 82.04.440, and 82.32.045; reenacting and amending RCW 82.04.250; adding new sections to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; creating new sections; repealing RCW 82.04.2404, 82.04.272, 82.04.2905, 82.04.2906, 82.04.2907, 82.04.2908, 82.04.2909, and 82.04.294; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 RCW 82.04.060 and 2010 c 106 s 203 are each amended to
read as follows:
"Sale at wholesale" or "wholesale sale" means:
(1) Any sale, which is not a sale at retail, of:
(a) Tangible personal property;
(b) Services defined as a retail sale in RCW 82.04.050(2) (a) or
(g);
(c) Amusement or recreation services as defined in RCW
82.04.050(3)(a);
(d) Prewritten computer software;
(e) Services described in RCW 82.04.050(6)(b);
(f) Extended warranties as defined in RCW 82.04.050(7);
(g) Competitive telephone service, ancillary services, or
telecommunications service as those terms are defined in RCW 82.04.065;
or
(h) Digital goods, digital codes, or digital automated services;
(2) Any charge made for labor and services rendered for persons who
are not consumers, in respect to real or personal property, if such
charge is expressly defined as a retail sale by RCW 82.04.050 when
rendered to or for consumers. For the purposes of this subsection (2),
"real or personal property" does not include any natural products named
in RCW 82.04.100; ((and))
(3) The sale of any service for resale, if the sale is excluded
from the definition of "sale at retail" and "retail sale" in RCW
82.04.050(14); and
(4) Any sale of or charge made for labor and services if the sale
or charge is excluded from the definition of retail sale in RCW
82.04.050 (10) or (12). Nothing in this subsection may be construed as
affecting the status of persons providing such services as consumers as
provided in RCW 82.04.190.
Sec. 102 RCW 82.04.230 and 2006 c 300 s 5 are each amended to
read as follows:
(1) Upon every person engaging within this state in business as an
extractor or extractor for hire, except persons taxable as an extractor
or extractor for hire under any other provision in this chapter; as to
such persons the amount of the tax with respect to such business
((shall be)) is, in the case of extractors, equal to the value of the
products, including by-products, extracted for sale or for commercial
or industrial use, and, in the case of extractors for hire, the gross
income of the business of extracting for hire, multiplied by the rate
of 0.484 percent.
(2) The measure of the tax on extractors is the value of the
products, including by-products, so extracted, regardless of the place
of sale or the fact that deliveries may be made to points outside the
state.
Sec. 103 RCW 82.04.250 and 2010 1st sp.s. c 23 s 509 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 on the business of making sales at
retail, 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.
(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))) (2) or
((subsection (3) of this section)) eligible for the deduction in
section 113 of this act, 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. 104 RCW 82.04.260 and 2011 c 2 s 203 (Initiative Measure No.
1107) are each amended to read as follows:
(1) ((Upon every person engaging within this state in the business
of manufacturing:)) (a) 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.
(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, 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, 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 July 1, 2012, 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) 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) 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) 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) 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) 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) 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) 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)
(b) 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) 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.)) (2)(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:
(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)
(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))) (2)
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))) (2), "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))) (2) must file a complete annual report with the department
under RCW 82.32.534.
(e) This subsection (((11))) (2) does not apply on and after July
1, 2024.
(((12))) (3)(a) Until July 1, 2024, upon every person engaging
within this state in the business of extracting timber or extracting
timber 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))) (3)(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))) (3)(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))) (3) must file a complete annual survey with the department
under RCW 82.32.585.
(((13) 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.)) (4)(a) 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.
(14)
(b) A person reporting under the tax rate provided in this
subsection (((14))) (4) must file a complete annual report with the
department under RCW 82.32.534.
Sec. 105 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))) or (c) 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.)) "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.
(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)
Sec. 106 RCW 82.04.285 and 2005 c 369 s 5 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business of
operating contests of chance; as to such persons, the amount of tax
with respect to the business of operating contests of chance is equal
to the gross income of the business derived from contests of chance
multiplied by the rate of 1.5 percent.
(2) An additional tax is imposed on those persons subject to tax in
subsection (1) of this section. The amount of the additional tax with
respect to the business of operating contests of chance is equal to the
gross income of the business derived from contests of chance multiplied
by the rate of 0.1 percent through June 30, 2006, and 0.13 percent
thereafter. The money collected under this subsection (2) ((shall))
must be deposited in the problem gambling account created in RCW
43.20A.892. ((This subsection does not apply to businesses operating
contests of chance when the gross income from the operation of contests
of chance is less than fifty thousand dollars per year.))
(3) For the purpose of this section, "contests of chance" means any
contests, games, gaming schemes, or gaming devices, other than the
state lottery as defined in RCW 67.70.010, in which the outcome depends
in a material degree upon an element of chance, notwithstanding that
skill of the contestants may also be a factor in the outcome. The term
includes social card games, bingo, raffle, and punchboard games, and
pull-tabs as defined in chapter 9.46 RCW. The term does not include
race meets for the conduct of which a license must be secured from the
Washington horse racing commission, or "amusement game" as defined in
RCW 9.46.0201.
(4) "Gross income of the business" does not include the monetary
value or actual cost of any prizes that are awarded, amounts paid to
players for winning wagers, accrual of prizes for progressive jackpot
contests, or repayment of amounts used to seed guaranteed progressive
jackpot prizes.
Sec. 107 RCW 82.04.290 and 2011 c 174 s 101 are each amended to
read as follows:
(1) ((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 equal
to the gross income or gross proceeds of sales of the business
multiplied by a rate of 0.275 percent.)) 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 ((
(2)(a)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))) (2) This ((subsection (2) includes)) section applies to,
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." This
includes, but is not limited to, the business of inspecting, testing,
labeling, and storing canned salmon owned by another person; conducting
research and development for compensation; providing chemical
dependency treatment services; providing travel agent or tour operator
services; acting as an international steamship agent, international
customs house broker, international freight forwarder, vessel or cargo
charter broker in foreign commerce, or international air cargo agent;
the business of stevedoring and associated activities pertinent to the
movement of goods and commodities in waterborne interstate or foreign
commerce as defined in section 109 of this act; performing aerospace
product development for others; operating a warehouse; providing
international investment management services as defined in RCW
82.04.293; providing boarding home services as defined in section 109
of this act; receiving gross income from royalties as defined in
section 109 of this act; providing day care services; and performing
insurance services as defined in section 109 of this act.
(3) 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 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.
NEW SECTION. Sec. 108 The following acts or parts of acts are
each repealed:
(1) RCW 82.04.2404 (Manufacturers -- Processors for hire--Semiconductor materials) and 2010 c 114 s 105 & 2006 c 84 s 2;
(2) RCW 82.04.272 (Tax on warehousing and reselling prescription
drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
(3) RCW 82.04.2905 (Tax on providing day care) and 1998 c 312 s 7;
(4) RCW 82.04.2906 (Tax on certain chemical dependency services)
and 2003 c 343 s 1;
(5) 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;
(6) 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;
(7) RCW 82.04.2909 (Tax on aluminum smelters) and 2011 c 174 s 301;
and
(8) RCW 82.04.294 (Tax on manufacturers or wholesalers of solar
energy systems) and 2011 c 179 s 1, 2010 c 114 s 109, 2009 c 469 s 501,
2007 c 54 s 8, & 2005 c 301 s 2.
NEW SECTION. Sec. 109 A new section is added to chapter 82.04
RCW to read as follows:
(1) In computing the tax imposed under RCW 82.04.290 on engaging in
a qualifying business activity, a person is entitled to a deduction as
provided in this section.
(2) The amount of the deduction under this section is determined by
multiplying the appropriate tax base reduction factor by:
(a) The gross income of the business during the reporting period
from engaging in the qualifying business activity; or
(b) If the taxpayer is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.290 on engaging in the qualifying business activity, the
difference resulting from subtracting all other deductible amounts from
the gross income of the business during the reporting period from
engaging in the qualifying business activity.
(3) If a person engages in more than one qualifying business
activity, the person is entitled to a deduction under this section with
respect to each qualifying business activity.
(4) For purposes of subsection (2) of this section, the tax base
reduction factors are as follows:
(a) 0.4 for performing aerospace product development for others;
(b) 0.67734 for the following activities:
(i) Conducting research and development for compensation by a
nonprofit corporation or nonprofit association;
(ii) Inspecting, testing, labeling, and storing canned salmon owned
by another person;
(iii) Providing eligible chemical dependency treatment services;
(iv) Operating a qualifying warehouse;
(v) Receiving gross income from royalties;
(vi) Providing child day care; and
(vii) Providing insurance services; and
(c) 0.81667 for the following activities:
(i) Engaging in qualifying travel or transportation-related
activities;
(ii) Providing international investment management services; and
(iii) Providing boarding home services by a licensed boarding home.
(5) The deduction in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(6) For purposes of this section, the following definitions apply:
(a) "Aerospace product development" has the same meaning as in RCW
82.04.4461.
(b) "Boarding home services" means any services that a licensed
boarding home is authorized to provide to residents of the boarding
home, either directly or indirectly, and housing provided to residents
of the boarding home.
(c) "Child day care" means providing child care for continuous
periods of less than twenty-four hours.
(d) "Eligible chemical dependency treatment services" means
intensive inpatient or recovery house residential treatment services
for chemical dependency, certified by the department of social and
health services, for which payment from the United States or any of its
instrumentalities or from the state of Washington or any of its
municipal corporations or political subdivisions is received as
compensation for or to support those services.
(e) "Gross income from royalties" means compensation for the use of
intangible property, including charges in the nature of royalties,
regardless of where the intangible property will be used. For purposes
of this subsection, "intangible property" includes copyrights, patents,
licenses, franchises, trademarks, trade names, and similar items.
"Gross income from royalties" does not include compensation for any
natural resource, the licensing of prewritten computer software to the
end user, or the licensing of digital goods, digital codes, or digital
automated services to the end user as defined in RCW 82.04.190(11).
(e) "Insurance services" means:
(i) 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; or
(ii) The licensed activities of insurance producers or title
insurance agents licensed under chapter 48.17 RCW or surplus line
brokers licensed under chapter 48.15 RCW.
(g) "International investment management services" has the same
meaning as in RCW 82.04.293.
(h) "Licensed boarding home" means a boarding home licensed under
chapter 18.20 RCW.
(i) "Qualifying business activity" means:
(i) Conducting research and development for compensation by a
nonprofit corporation or nonprofit association;
(ii) Inspecting, testing, labeling, and storing canned salmon owned
by another person;
(iii) Providing eligible chemical dependency treatment services;
(iv) Operating a qualifying warehouse;
(v) Receiving gross income from royalties;
(vi) Providing child day care;
(vii) Providing insurance services;
(viii) Engaging in qualifying travel or transportation-related
activities;
(ix) Providing international investment management services;
or
(x) Providing boarding home services by a licensed boarding home.
(j)(i) "Qualifying travel or transportation-related activities"
means engaging within this state in one or more of the following
businesses: Travel agent, tour operator, international steamship
agent, international customs house broker, international freight
forwarder, vessel or cargo charter broker in foreign commerce,
international air cargo agent, or stevedoring and associated activities
pertinent to the movement of goods and commodities in waterborne
interstate or foreign commerce.
(ii) For purposes of this subsection (6)(j), "stevedoring and
associated activities pertinent to the movement of goods and
commodities in waterborne interstate or foreign commerce" means 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.
(k)(i) "Qualifying warehouse" means a cold storage warehouse or
storage warehouse. The term does not include cold storage lockers.
(ii) For purposes of this subsection (6)(k), the following
definitions apply:
(A) "Cold storage warehouse" means a storage warehouse used to
store any combination of fresh or frozen perishable fruits or
vegetables, meat, seafood, dairy products, or fowl, 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
of a building or structure, 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 is conducted that entitles the person conducting the activity
to a deduction under section 115 of this act.
NEW SECTION. Sec. 110 A new section is added to chapter 82.04
RCW to read as follows:
(1)(a) In computing the tax imposed under RCW 82.04.270 on the
business of making wholesale sales of aluminum manufactured by the
seller, an aluminum smelter is entitled to a deduction as determined in
(b) of this subsection (1).
(b) The amount of the deduction under this subsection (1) is
determined by multiplying 0.4 by:
(i) The gross proceeds of wholesale sales by the taxpayer, during
the reporting period, of aluminum manufactured by the taxpayer; or
(ii) If the taxpayer is entitled to one or more deductions under
any other statute in this chapter in computing the tax imposed under
RCW 82.04.270 on the business of making wholesale sales of aluminum
manufactured by the taxpayer, the difference resulting from subtracting
all other deductible amounts from the gross proceeds of wholesale sales
by the taxpayer, during the reporting period, of aluminum manufactured
by the taxpayer.
(2)(a) In computing the tax imposed under RCW 82.04.240 on the
business of manufacturing aluminum, an aluminum smelter is entitled to
a deduction as determined in (b) of this subsection (2).
(b) The amount of the deduction under this subsection (2) is
determined by multiplying 0.4 by:
(i) The value of the product manufactured by the taxpayer during
the reporting period, in the case of manufacturers, or, in the case of
processors for hire, the gross income of the business from processing
aluminum for hire during the reporting period; or
(ii) If the taxpayer is entitled to one or more deductions under
any other statute in this chapter in computing the tax imposed under
RCW 82.04.240 on the business of manufacturing aluminum, the difference
resulting from subtracting all other deductible amounts from the value
of the product manufactured by the taxpayer during the reporting
period, in the case of manufacturers, or, in the case of processors for
hire, the gross income of the business from processing aluminum for
hire during the reporting period.
(3) A person claiming a deduction under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2011 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a deduction under this section must file a complete
annual survey with the department under RCW 82.32.585.
(4) The deductions in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(5) No deduction may be claimed under this section for reporting
periods beginning January 1, 2017.
NEW SECTION. Sec. 111 A new section is added to chapter 82.04
RCW to read as follows:
(1) In computing the tax imposed under RCW 82.04.240 on the
business of manufacturing semiconductor materials, a person is entitled
to a deduction as determined in subsection (2) of this section.
(2) The amount of the deduction under this section is determined by
multiplying 0.43183 by:
(a) The value of the product manufactured by the taxpayer during
the reporting period, in the case of manufacturers, or, in the case of
processors for hire, the gross income of the business from processing
semiconductor materials for hire during the reporting period; or
(b) If the taxpayer is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.240 on the business of manufacturing semiconductor materials, the
difference resulting from subtracting all other deductible amounts from
the value of the product manufactured by the taxpayer during the
reporting period, in the case of manufacturers, or, in the case of
processors for hire, the gross income of the business from processing
semiconductor materials for hire during the reporting period.
(3) For the purposes of this section "semiconductor materials"
means silicon crystals, silicon ingots, raw polished semiconductor
wafers, and compound semiconductor wafers.
(4) A person claiming a deduction under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2011 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a deduction under this section must file a complete
annual survey with the department under RCW 82.32.585.
(5) The deduction in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(6) No deduction may be claimed under this section for reporting
periods beginning December 1, 2018.
NEW SECTION. Sec. 112 A new section is added to chapter 82.04
RCW to read as follows:
(1)(a) In computing the tax imposed under RCW 82.04.270 on the
business of making wholesale sales of qualifying solar energy systems
or qualifying components by the manufacturer of the system or
component, a person is entitled to a deduction as determined in (b) of
this subsection (1).
(b) The amount of the deduction under this subsection (1) is
determined by multiplying 0.43183 by:
(i) The gross proceeds of wholesale sales by the person, during the
reporting period, of qualifying solar energy products or qualifying
components, manufactured by the person; or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.270 on the business of making wholesale sales of qualifying solar
energy systems or qualifying components manufactured by the person, the
difference resulting from subtracting all other deductible amounts from
the gross proceeds of wholesale sales by the person, during the
reporting period, of qualifying solar energy systems or qualifying
components manufactured by the person.
(2)(a) In computing the tax imposed under RCW 82.04.240 on the
business of manufacturing qualifying solar energy systems or qualifying
components, a person is entitled to a deduction as determined in (b) of
this subsection (2).
(b) The amount of the deduction under this subsection (2) is
determined by multiplying 0.43183 by:
(i) The value of the qualifying solar energy systems or qualifying
components manufactured by the person during the reporting period, in
the case of manufacturers, or, in the case of processors for hire, the
gross income of the business from processing qualifying solar energy
systems or qualifying components for hire during the reporting period;
or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.240 on the business of manufacturing qualifying solar energy
systems or qualifying components, the difference resulting from
subtracting all other deductible amounts from the value of the
qualifying solar energy systems or qualifying components manufactured
by the person during the reporting period, in the case of
manufacturers, or, in the case of processors for hire, the gross income
of the business from processing solar energy systems or qualifying
components for hire during the reporting period.
(3) The definitions in this subsection apply throughout this
section.
(a) "Compound semiconductor solar wafers" means a semiconductor
solar wafer composed of elements from two or more different groups of
the periodic table.
(b) "Module" means the smallest nondivisible self-contained
physical structure housing interconnected photovoltaic cells and
providing a single direct current electrical output.
(c) "Photovoltaic cell" means a device that converts light directly
into electricity without moving parts.
(d) "Qualifying component" means the following products to be used
exclusively in components of qualifying solar energy systems: Solar
grade silicon, silicon solar wafers, silicon solar cells, thin film
solar devices, or compound semiconductor solar wafers.
(e) "Qualifying solar energy system" means a solar energy system
using photovoltaic modules or stirling converters.
(f) "Silicon solar cells" means a photovoltaic cell manufactured
from a silicon solar wafer.
(g) "Silicon solar wafers" means a silicon wafer manufactured for
solar conversion purposes.
(h) "Solar energy system" means any device or combination of
devices or elements that rely upon direct sunlight as an energy source
for use in the generation of electricity.
(i) "Solar grade silicon" means high-purity silicon used
exclusively in components of solar energy systems using photovoltaic
modules to capture direct sunlight. "Solar grade silicon" does not
include silicon used in semiconductors.
(j) "Stirling converter" means a device that produces electricity
by converting heat from a solar source utilizing a stirling engine.
(k) "Thin film solar devices" means a nonparticipating substrate on
which various semiconducting materials are deposited to produce a
photovoltaic cell that is used to generate electricity.
(4) A person claiming a deduction under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2011 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a deduction under this section must file a complete
annual survey with the department under RCW 82.32.585.
(5) The deductions in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(6) No deduction may be claimed under this section for reporting
periods beginning July 1, 2014.
NEW SECTION. Sec. 113 A new section is added to chapter 82.04
RCW to read as follows:
(1) In computing the tax imposed under RCW 82.04.250 on the
business of making qualifying retail sales, an eligible person is
entitled to a deduction as determined in subsection (2) of this
section.
(2) The amount of the deduction under this section is determined by
multiplying 0.38344 by:
(a) The eligible person's gross proceeds of qualifying retail sales
during the reporting period; or
(b) If the eligible person is entitled to one or more deductions
under any other statute in this chapter in computing the tax imposed
under RCW 82.04.250 on the business of making qualifying retail sales,
the difference resulting from subtracting all other deductible amounts
from the eligible person's gross proceeds of qualifying retail sales
during the reporting period.
(3) The definitions in this subsection apply throughout this
section.
(a) "Eligible person" means a person classified by the federal
aviation administration as a federal aviation regulation part 145
certificated repair station.
(b) "Qualifying retail sales" means sales at retail that are exempt
from the tax imposed under RCW 82.08.020 by reason of RCW 82.08.0261,
82.08.0262, or 82.08.0263.
(4) A person claiming a deduction under this section must file a
complete annual report with the department under RCW 82.32.534.
However, if legislation is enacted after 2011 that replaces the annual
report under RCW 82.32.534 with the annual survey under RCW 82.32.585,
a person claiming a deduction under this section must file a complete
annual survey with the department under RCW 82.32.585.
(5) The deduction in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
(6) No deduction may be claimed under this section for reporting
periods beginning July 1, 2024.
NEW SECTION. Sec. 114 A new section is added to chapter 82.04
RCW to read as follows:
(1) In computing the tax imposed under RCW 82.04.250 or 82.04.270
on the business of making sales at retail or wholesale of prescription
drugs, an eligible person is entitled to a deduction as determined in
this subsection.
(a) The deduction under this subsection from the gross proceeds of
retail sales of prescription drugs is determined by multiplying 0.70701
by:
(i) The gross proceeds of retail sales of prescription drugs by the
eligible person during the reporting period; or
(ii) If the eligible person is entitled to one or more deductions
under any other statute in this chapter in computing the tax imposed
under RCW 82.04.250 on the business of making retail sales of
prescription drugs, the difference resulting from subtracting all other
deductible amounts from the gross proceeds of retail sales of
prescription drugs by the eligible person during the reporting period.
(b) The deduction under this subsection from the gross proceeds of
wholesale sales of prescription drugs is determined by multiplying
0.71488 by:
(i) The gross proceeds of wholesale sales of prescription drugs by
the eligible person during the reporting period; or
(ii) If the eligible person is entitled to one or more deductions
under any other statute in this chapter in computing the tax imposed
under RCW 82.04.270 on the business of making wholesale sales of
prescription drugs, the difference resulting from subtracting all other
deductible amounts from the gross proceeds of wholesale sales of
prescription drugs by the eligible person during the reporting period.
(2) The definitions in this subsection apply throughout this
section:
(a) "Eligible person" means a person who:
(i) Is registered with the federal drug enforcement administration
and licensed by the state board of pharmacy;
(ii) Buys prescription drugs from a manufacturer or another
wholesaler and resells the drugs to persons selling at retail or to
hospitals, clinics, health care providers, or other providers of health
care services; and
(iii) Owns or operates a warehouse inside or outside of this state
where the person's prescription drugs are stored pending delivery to
buyers.
(b) "Prescription drugs" means drugs intended for human use
pursuant to a prescription.
(c) "Prescription" and "drug" have the same meaning as in RCW
82.08.0281.
(3) The deduction in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 115 A new section is added to chapter 82.04
RCW to read as follows:
(1)(a) In computing the tax imposed under RCW 82.04.270 on the
business of making wholesale sales of qualifying meat products, an
eligible person is entitled to a deduction as determined in (b) of this
subsection (1).
(b) The amount of the deduction under this subsection (1) is
determined by multiplying 0.71488 by:
(i) The gross proceeds of wholesale sales of qualifying meat
products during the reporting period by the eligible person; or
(ii) If the eligible person is entitled to one or more deductions
under any other statute in this chapter in computing the tax imposed
under RCW 82.04.270 on the business of making wholesale sales of
qualifying meat products, the difference resulting from subtracting all
other deductible amounts from the gross proceeds of wholesale sales of
qualifying meat products during the reporting period by the eligible
person.
(2)(a) In computing the tax imposed under RCW 82.04.240 on the
business of processing perishable meat products, a person is entitled
to a deduction as determined in (b) of this subsection (2).
(b) The amount of the deduction under this subsection (2) is
determined by multiplying 0.71488 by:
(i) The value of the meat product processed by the person for the
reporting period, in the case of manufacturers, or, in the case of
processors for hire, the gross income of the business for the reporting
period from processing meat products for hire; or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.240 on the business of processing perishable meat products, the
difference resulting from subtracting all other deductible amounts from
the value of the meat product processed by the person for the reporting
period, in the case of manufacturers, or, in the case of processors for
hire, the gross income of the business for the reporting period from
processing meat products for hire.
(3) The definitions in this subsection apply throughout this
section.
(a) "Eligible person" means any person who sells perishable meat
products at wholesale or any person who takes an animal or a perishable
meat product, processes it, and sells the resulting qualifying meat
product at wholesale.
(b) "Meat product" means a product derived in whole or in part from
any part of an animal carcass, except products derived from seafood or
insects. The term includes only products that are intended for human
consumption as food or animal consumption as feed.
(c) "Perishable meat product" means a meat product having a high
risk of spoilage within a period of thirty days without refrigeration
or freezing.
(d) "Processed," "processes," or "processing" means to engage in
one or more of the following activities: Slaughtering an animal,
breaking an animal carcass or part of an animal carcass into any type
of smaller unit, or engaging in any other manufacturing activity when
perishable meat is either the finished product or an ingredient or
component of the finished product.
(e) "Qualifying meat product" means: (i) With respect to any
person, a perishable meat product; and (ii) any meat product,
perishable or not, that is the result of the seller taking an animal or
a perishable meat product, processing it, and selling the resulting
meat product at wholesale, even if meat is only a component of the
finished product.
(4) The deductions in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 116 A new section is added to chapter 82.04
RCW to read as follows:
(1)(a) In computing the tax imposed under RCW 82.04.240 on
qualifying manufacturing activities, a person is entitled to a
deduction as determined in (b) of this subsection (1).
(b) The amount of the deduction under this subsection is determined
by multiplying 0.71488 by:
(i) The value of the eligible product manufactured by the person
during the reporting period; or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.240 on qualifying manufacturing, the difference resulting from
subtracting all other deductible amounts from the value of the eligible
products manufactured by the person during the reporting period.
(2) In computing the tax imposed under RCW 82.04.250 on the
business of making qualifying retail sales, a person is entitled to a
deduction as determined in (b) of this subsection (2).
(a) The amount of the deduction under this subsection (2) is
determined by multiplying 0.70701 by:
(i) The gross proceeds of sales for qualifying retail sales by the
person during the reporting period; or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.250 on the business of making qualifying retail sales, the
difference resulting from subtracting all other deductible amounts from
the gross proceeds of sales for qualifying retail sales by the person
during the reporting period.
(b) Persons claiming a deduction under this subsection (2) must
keep and preserve records for the period required by RCW 82.32.070
establishing that the qualifying retail sales were for eligible
products that were transported by the purchaser in the ordinary course
of business out of this state.
(3) In computing the tax imposed under RCW 82.04.270 on the
business of making qualifying wholesale sales, a person is entitled to
a deduction as determined in (b) of this subsection (3).
(a) The amount of the deduction under this subsection (3) is
determined by multiplying 0.71488 by:
(i) The gross proceeds of sales for qualifying wholesale sales by
the person during the reporting period; or
(ii) If the person is entitled to one or more deductions under any
other statute in this chapter in computing the tax imposed under RCW
82.04.270 on the business of making qualifying wholesale sales, the
difference resulting from subtracting all other deductible amounts from
the gross proceeds of sales for qualifying wholesale sales by the
person during the reporting period.
(b) Persons claiming a deduction under this subsection (3) must
keep and preserve records for the period required by RCW 82.32.070
establishing that the qualifying wholesale sales were for eligible
products transported by the purchaser in the ordinary course of
business out of this state.
(4) The definitions in this subsection apply throughout this
section.
(a) "Eligible product" means:
(i) Seafood products that remain in a raw, raw frozen, or raw
salted state at the completion of the manufacturing;
(ii) 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 process, such as whey and casein; and
(iii) Fruits and vegetables that have been manufactured by canning,
preserving, freezing, processing, or dehydrating fresh fruits or
vegetables.
(b) "Qualifying manufacturing" means manufacturing an eligible
product.
(c) "Qualifying retail sales" means retail sales of an eligible
product described in (a)(i) or (ii) of this subsection (4) by the
manufacturer of the product, but only when the product is delivered to
purchasers who transport the product out of this state in the ordinary
course of business.
(d) "Qualifying wholesale sales" means wholesale sales of any
eligible product described in (a) of this subsection (4) by the
manufacturer of the product, but only when the product is delivered to
purchasers who transport the product out of this state in the ordinary
course of business.
(5) The deduction in this section may only be claimed on a return
filed electronically using the department's online tax filing service.
NEW SECTION. Sec. 117 A new section is added to chapter 82.04
RCW to read as follows:
(1) In computing the tax imposed under RCW 82.04.285(2), a credit
is allowed for eligible persons. The credit equals the full amount of
tax otherwise due under RCW 82.04.285(2) for the reporting period.
(2) For purposes of this section, "eligible person" means a person
subject to tax under RCW 82.04.285 and whose gross income of the
business from the operation of contests of chance is less than fifty
thousand dollars in the tax year in which the credit under this section
is claimed.
Sec. 118 RCW 82.04.29002 and 2010 1st sp.s. c 23 s 1101 are each
amended to read as follows:
(1) Beginning May 1, 2010, through June 30, 2013, an additional
rate of tax of 0.30 percent is added to the rate provided for in RCW
((82.04.255,)) 82.04.285((,)) and 82.04.290(((2)(a))).
(2)(((a))) The additional rate in subsection (1) of this section
does not apply to:
(a) Persons engaging within this state in business as a hospital.
"Hospital" has the meaning provided in chapter 70.41 RCW but also
includes any hospital that comes within the scope of chapter 71.12 RCW
if the hospital is also licensed under chapter 70.41 RCW((.));
(b) ((The additional rate in subsection (1) of this section does
not apply to)) Amounts received from performing scientific research and
development services including but not limited to aerospace product
development, as defined in RCW 82.04.4461, performed for others, and
research and development in the physical, engineering, and life
sciences (such as agriculture, bacteriological, biotechnology,
chemical, life sciences, and physical science research and development
laboratories or services);
(c) Amounts received by nonprofit corporations or nonprofit
associations engaging in the business of conducting research and
development for compensation;
(d) Amounts received from inspecting, testing, labeling, and
storing canned salmon owned by another person;
(e) Amounts received from providing eligible chemical dependency
treatment services as defined in section 109 of this act;
(f) Amounts received from providing qualifying travel or
transportation-related activities as defined in section 109 of this
act;
(g) Amounts received from operating a qualifying warehouse as
defined in section 109 of this act;
(h) Amounts received from providing international investment
management services as defined in RCW 82.04.293;
(i) Amounts received by boarding homes licensed under chapter 18.20
RCW for providing boarding home services as defined in section 109 of
this act;
(j) Amounts received from providing child day care as defined in
section 109 of this act;
(k) Amounts received from providing insurance services as defined
in section 109 of this act; and
(l) Gross income from royalties as defined in section 109 of this
act.
Sec. 119 RCW 82.04.440 and 2011 c 2 s 205 (Initiative Measure No.
1107) are each amended to read as follows:
(1) Every person engaged in activities that are subject to tax
under two or more provisions of RCW 82.04.230 through 82.04.298,
inclusive, is taxable under each provision applicable to those
activities.
(2) Persons taxable under RCW ((82.04.2909(2),)) 82.04.250,
82.04.270, ((82.04.294(2),)) or 82.04.260(((1)(b), (c), or (d), (4),
(11), or (12))) (2) or (3)(c) with respect to selling products in this
state, including those persons who are also taxable under RCW
82.04.261, are allowed a credit against those taxes for any (a)
manufacturing taxes paid with respect to the manufacturing of products
so sold in this state, and/or (b) extracting taxes paid with respect to
the extracting of products so sold in this state or ingredients of
products so sold in this state. Extracting taxes taken as credit under
subsection (3) of this section may also be taken under this subsection,
if otherwise allowable under this subsection. The amount of the credit
may not exceed the tax liability arising under this chapter with
respect to the sale of those products.
(3) Persons taxable as manufacturers under RCW 82.04.240 or
82.04.260 (((1)(b) or (12))) (3), including those persons who are also
taxable under RCW 82.04.261, are allowed a credit against those taxes
for any extracting taxes paid with respect to extracting the
ingredients of the products so manufactured in this state. The amount
of the credit may not exceed the tax liability arising under this
chapter with respect to the manufacturing of those products.
(4) Persons taxable under RCW 82.04.230, 82.04.240,
((82.04.2909(1), 82.04.294(1), 82.04.2404,)) or 82.04.260 (((1),))
(2)((, (4), (11), or (12))) or (3), including those persons who are
also taxable under RCW 82.04.261, with respect to extracting or
manufacturing products in this state are allowed a credit against those
taxes for any (i) gross receipts taxes paid to another state with
respect to the sales of the products so extracted or manufactured in
this state, (ii) manufacturing taxes paid with respect to the
manufacturing of products using ingredients so extracted in this state,
or (iii) manufacturing taxes paid with respect to manufacturing
activities completed in another state for products so manufactured in
this state. The amount of the credit may not exceed the tax liability
arising under this chapter with respect to the extraction or
manufacturing of those products.
(5) For the purpose of this section:
(a) "Gross receipts tax" means a tax:
(i) Which is imposed on or measured by the gross volume of
business, in terms of gross receipts or in other terms, and in the
determination of which the deductions allowed would not constitute the
tax an income tax or value added tax; and
(ii) Which is also not, pursuant to law or custom, separately
stated from the sales price.
(b) "State" means (i) the state of Washington, (ii) a state of the
United States other than Washington, or any political subdivision of
such other state, (iii) the District of Columbia, and (iv) any foreign
country or political subdivision thereof.
(c) "Manufacturing tax" means a gross receipts tax imposed on the
act or privilege of engaging in business as a manufacturer, and
includes (i) the taxes imposed on persons who are engaged in business
as a manufacturer in RCW 82.04.240((, 82.04.2404, 82.04.2909(1),)) and
82.04.260 (((1),)) (2)((, (4), (11), and (12), and 82.04.294(1))) or
(3); (ii) the tax imposed under RCW 82.04.261 on persons who are
engaged in business as a manufacturer; and (iii) similar gross receipts
taxes paid to other states.
(d) "Extracting tax" means a gross receipts tax imposed on the act
or privilege of engaging in business as an extractor, and includes (i)
the tax imposed on extractors in RCW 82.04.230 and 82.04.260(((12)))
(3); (ii) the tax imposed under RCW 82.04.261 on persons who are
engaged in business as an extractor; and (iii) similar gross receipts
taxes paid to other states.
(e) "Business", "manufacturer", "extractor", and other terms used
in this section have the meanings given in RCW 82.04.020 through
((82.04.212 [82.04.217])) 82.04.217, notwithstanding the use of those
terms in the context of describing taxes imposed by other states.
NEW SECTION. Sec. 120 A new section is added to chapter 82.16
RCW to read as follows:
Persons engaged in the business of stevedoring and associated
activities pertinent to the movement of goods and commodities in
waterborne interstate or foreign commerce, as that term is defined in
section 109 of this act, are exempt from payment of taxes imposed by
this chapter for that portion of their business subject to taxation
under RCW 82.04.290(1).
Sec. 121 RCW 82.32.045 and 2010 1st sp.s. c 23 s 1103 are each
amended to read as follows:
(1) Except as otherwise provided in this chapter, payments of the
taxes imposed under chapters 82.04, 82.08, 82.12, 82.14, and 82.16 RCW,
along with reports and returns on forms prescribed by the department,
are due monthly within twenty-five days after the end of the month in
which the taxable activities occur.
(2) The department of revenue may relieve any taxpayer or class of
taxpayers from the obligation of remitting monthly and may require the
return to cover other longer reporting periods, but in no event may
returns be filed for a period greater than one year. For these
taxpayers, tax payments are due on or before the last day of the month
next succeeding the end of the period covered by the return.
(3) The department of revenue may also require verified annual
returns from any taxpayer, setting forth such additional information as
it may deem necessary to correctly determine tax liability.
(4) Notwithstanding subsections (1) and (2) of this section, the
department may relieve any person of the requirement to file returns if
the following conditions are met:
(a) The person's value of products, gross proceeds of sales, or
gross income of the business, from all business activities taxable
under chapter 82.04 RCW, is less than:
(i) Twenty-eight thousand dollars per year; or
(ii) Forty-six thousand six hundred sixty-seven dollars per year
for persons generating at least fifty percent of their taxable amount
from activities taxable under RCW ((82.04.255, 82.04.290(2)(a), and))
82.04.285 and 82.04.290, other than activities described in RCW
82.04.29002(2);
(b) The person's gross income of the business from all activities
taxable under chapter 82.16 RCW is less than twenty-four thousand
dollars per year; and
(c) The person is not required to collect or pay to the department
of revenue any other tax or fee which the department is authorized to
collect.
NEW SECTION. Sec. 201 The repeals in section 108 of this act do
not affect any existing right acquired or liability or obligation
incurred under the statutes repealed or under any rule or order adopted
under the statutes repealed nor does it affect any proceedings
instituted under the statutes repealed.
NEW SECTION. Sec. 202 The office of the code reviser, working
with the department of revenue, must prepare a bill for introduction at
the next legislative session that corrects references to the sections
affected by this act.
NEW SECTION. Sec. 203 This act takes effect January 1, 2013.