BILL REQ. #: H-4043.4
State of Washington | 63rd Legislature | 2014 Regular Session |
READ FIRST TIME 02/11/14.
AN ACT Relating to improving fiscal accountability and transparency standards with respect to state tax preferences; amending RCW 82.32.330, 82.32.090, 82.32.590, 82.32.600, 82.32.605, 82.32.607, 82.32.710, 82.32.808, 82.04.240, 82.04.2404, 82.04.260, 82.04.260, 82.04.260, 82.04.260, 82.04.2909, 82.04.294, 82.04.426, 82.04.4266, 82.04.4268, 82.04.4269, 82.04.4277, 82.04.4452, 82.04.4461, 82.04.4461, 82.04.4463, 82.04.4463, 82.04.448, 82.04.4481, 82.04.4483, 82.04.449, 82.08.805, 82.08.965, 82.08.9651, 82.08.970, 82.08.980, 82.08.980, 82.08.986, 82.12.022, 82.12.025651, 82.12.805, 82.12.965, 82.12.9651, 82.12.970, 82.12.980, 82.12.980, 82.16.0421, 82.29A.137, 82.29A.137, 82.60.070, 82.63.020, 82.63.045, 82.74.040, 82.74.050, 82.75.040, 82.75.070, 82.82.020, 82.82.040, 84.36.645, 84.36.655, and 84.36.655; adding new sections to chapter 82.32 RCW; creating a new section; repealing RCW 82.32.534 and 82.32.585; providing an effective date; providing a contingent effective date; providing expiration dates; 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 Washington
has among the largest number of tax preferences (i.e. credits,
exemptions, deductions, and preferential rates) in the nation due in
large part to the unique nature of the state's tax structure. The
legislature finds that measuring and assessing the efficacy of such
preferences is essential to ensure the most effective use of public
resources, and that public access to easily available data is vital to
conduct such evaluations.
(2) The legislature finds that comprehensive analysis and
evaluation of the efficacy of tax preferences assists lawmakers and the
public in understanding the benefits of specific tax policy decisions
to taxpayers, local economies, and the state. The legislature further
finds the relevant information critical for such analysis is frequently
not reported to the state department of revenue by taxpayers or is not
publicly available. The legislature further finds the lack of accurate
and ascertainable information has prevented the joint legislative audit
and review committee tax preference performance review process from
achieving the rigor of evaluation necessary to draw firm conclusions.
The legislature further finds that this also limits the ability of
lawmakers to access data of material importance for assessing proposed
tax preference legislation or to fairly and accurately evaluate the
merits of existing tax preferences. The legislature further finds that
Washington state has been a leader among states since passage of the
public disclosure act by initiative in 1972 in public disclosure of
government records, state budget documents, and campaign finance and
spending. The legislature further finds that similar leadership in the
area of the public disclosure of tax preferences would allow the
legislature and the public to assess the true impact of current tax
policy or proposed tax legislation in a manner that is currently
unattainable due to aggregated, anonymous data. The legislature
further finds that streamlining the reporting of tax preference data
collected by the department of revenue and eliminating unnecessary
reporting requirements of little usefulness for evaluation would
simplify and reduce the obligations of taxpayers, saving time and
effort. Therefore, the legislature intends to establish consistent
standards for the collection of data for the purposes of improving
analysis of tax preferences and their benefits and public policy
objective outcomes for taxpayers and relevant industries. The
legislature further intends to make such information subject to public
disclosure wherever possible to enable and improve lawmakers' and the
public's understanding of the benefits and costs of tax preferences
while ensuring that the release of such information does not cause
economic harm to taxpayers claiming such preferences.
Sec. 101 RCW 82.32.090 and 2011 c 24 s 3 are each amended to read
as follows:
(1) If payment of any tax due on a return to be filed by a taxpayer
is not received by the department of revenue by the due date, there is
assessed a penalty of five percent of the amount of the tax; and if the
tax is not received on or before the last day of the month following
the due date, there is assessed a total penalty of fifteen percent of
the amount of the tax under this subsection; and if the tax is not
received on or before the last day of the second month following the
due date, there is assessed a total penalty of twenty-five percent of
the amount of the tax under this subsection. No penalty so added may
be less than five dollars.
(2) If the department of revenue determines that any tax has been
substantially underpaid, there is assessed a penalty of five percent of
the amount of the tax determined by the department to be due. If
payment of any tax determined by the department to be due is not
received by the department by the due date specified in the notice, or
any extension thereof, there is assessed a total penalty of fifteen
percent of the amount of the tax under this subsection; and if payment
of any tax determined by the department to be due is not received on or
before the thirtieth day following the due date specified in the notice
of tax due, or any extension thereof, there is assessed a total penalty
of twenty-five percent of the amount of the tax under this subsection.
No penalty so added may be less than five dollars. As used in this
section, "substantially underpaid" means that the taxpayer has paid
less than eighty percent of the amount of tax determined by the
department to be due for all of the types of taxes included in, and for
the entire period of time covered by, the department's examination, and
the amount of underpayment is at least one thousand dollars.
(3) If a warrant is issued by the department of revenue for the
collection of taxes, increases, and penalties, there is added thereto
a penalty of ten percent of the amount of the tax, but not less than
ten dollars.
(4) If the department finds that a person has engaged in any
business or performed any act upon which a tax is imposed under this
title and that person has not obtained from the department a
registration certificate as required by RCW 82.32.030, the department
must impose a penalty of five percent of the amount of tax due from
that person for the period that the person was not registered as
required by RCW 82.32.030. The department may not impose the penalty
under this subsection (4) if a person who has engaged in business
taxable under this title without first having registered as required by
RCW 82.32.030, prior to any notification by the department of the need
to register, obtains a registration certificate from the department.
(5) If the department finds that a taxpayer has disregarded
specific written instructions as to reporting or tax liabilities, or
willfully disregarded the requirement to file returns or remit payment
electronically, as provided by RCW 82.32.080, the department must add
a penalty of ten percent of the amount of the tax that should have been
reported and/or paid electronically or the additional tax found due if
there is a deficiency because of the failure to follow the
instructions. A taxpayer disregards specific written instructions when
the department has informed the taxpayer in writing of the taxpayer's
tax obligations and the taxpayer fails to act in accordance with those
instructions unless, in the case of a deficiency, the department has
not issued final instructions because the matter is under appeal
pursuant to this chapter or departmental regulations. The department
may not assess the penalty under this section upon any taxpayer who has
made a good faith effort to comply with the specific written
instructions provided by the department to that taxpayer. A taxpayer
will be considered to have made a good faith effort to comply with
specific written instructions to file returns and/or remit taxes
electronically only if the taxpayer can show good cause, as defined in
RCW 82.32.080, for the failure to comply with such instructions. A
taxpayer will be considered to have willfully disregarded the
requirement to file returns or remit payment electronically if the
department has mailed or otherwise delivered the specific written
instructions to the taxpayer on at least two occasions. Specific
written instructions may be given as a part of a tax assessment, audit,
determination, closing agreement, or other written communication,
provided that such specific written instructions apply only to the
taxpayer addressed or referenced on such communication. Any specific
written instructions by the department must be clearly identified as
such and must inform the taxpayer that failure to follow the
instructions may subject the taxpayer to the penalties imposed by this
subsection. If the department determines that it is necessary to
provide specific written instructions to a taxpayer that does not
comply with the requirement to file returns or remit payment
electronically as provided in RCW 82.32.080, the specific written
instructions must provide the taxpayer with a minimum of forty-five
days to come into compliance with its electronic filing and/or payment
obligations before the department may impose the penalty authorized in
this subsection.
(6) If the department finds that all or any part of a deficiency
resulted from engaging in a disregarded transaction, as described in
RCW 82.32.655(3), the department must assess a penalty of thirty-five
percent of the additional tax found to be due as a result of engaging
in a transaction disregarded by the department under RCW 82.32.655(2).
The penalty provided in this subsection may be assessed together with
any other applicable penalties provided in this section on the same tax
found to be due, except for the evasion penalty provided in subsection
(7) of this section. The department may not assess the penalty under
this subsection if, before the department discovers the taxpayer's use
of a transaction described under RCW 82.32.655(3), the taxpayer
discloses its participation in the transaction to the department.
(7) If the department finds that all or any part of the deficiency
resulted from an intent to evade the tax payable hereunder, a further
penalty of fifty percent of the additional tax found to be due must be
added.
(8)(a) If the department finds that all or any part of a tax
preference listed under (b) of this subsection has not been reported on
a return, as required under this subsection, a penalty equal to the
lesser of: Twenty-five dollars or one-half of one percent of the
unreported amount must be added. The penalty under this subsection (8)
is separate and additional to any other penalties that may be assessed
under this section.
(b) Taxpayers required to electronically report taxes to the
department on a monthly or quarterly basis and claiming a deduction
under chapter 82.04 or 82.16 RCW are subject to the penalty under (a)
of this subsection.
(c) The penalty under (a) of this subsection does not apply to:
(i) Tax preferences required by constitutional law; or
(ii) Unreported business and occupation or public utility
deductions if the gross amount to which the deduction would apply was
reported on the return.
(d) The penalty under this subsection (8) applies to unreported
amounts for reporting periods beginning on or after January 1, 2015.
(9) The penalties imposed under subsections (1) through (4) of this
section can each be imposed on the same tax found to be due. This
subsection does not prohibit or restrict the application of other
penalties authorized by law.
(((9))) (10) The department may not impose the evasion penalty in
combination with the penalty for disregarding specific written
instructions or the penalty provided in subsection (6) of this section
on the same tax found to be due.
(((10))) (11) For the purposes of this section, "return" means any
document a person is required by the state of Washington to file to
satisfy or establish a tax or fee obligation that is administered or
collected by the department, and that has a statutorily defined due
date.
NEW SECTION. Sec. 102 A new section is added to chapter 82.32
RCW to read as follows:
In determining a taxpayer's taxable amount, a taxpayer must
separately report the amount of any tax deduction on a return required
under this chapter for taxes due under chapter 82.04 or 82.16 RCW.
NEW SECTION. Sec. 103 A new section is added to chapter 82.32
RCW to read as follows:
(1) The department must establish a reporting code to uniquely
identify:
(a) All deductions and credits under chapters 82.04 and 82.16 RCW;
(b) Sales and use tax exemptions reported on returns submitted by
sellers; and
(c) Preferential business and occupation tax rates.
(2) Subsection (1) of this section applies only to returns filed
electronically.
(3) The department must establish unique reporting codes described
under subsection (1)(b) and (c) of this section by January 1, 2015.
The department must establish the remaining unique reporting codes in
conjunction with the department's legacy business systems replacement.
NEW SECTION. Sec. 201 A new section is added to chapter 82.32
RCW to read as follows:
(1)(a) Every person claiming a tax preference that requires an
annual tax preference accountability report under this section must
file a complete report with the department. A tax preference
accountability report is due by April 30th of the year following any
calendar year in which a person claims a tax preference that requires
a report under this section.
(b) In addition to the reporting requirements under (a) of this
subsection, if the tax preference is a sales and use tax deferral on
labor and materials used in the construction or expansion of a building
that is part of an investment project, a report must also be filed by
April 30th of each of the seven succeeding calendar years after the
investment project has been certified by the department as being
operationally complete.
(c)(i) The department may extend the due date for timely filing of
annual reports under this section as provided in RCW 82.32.590.
(ii) A person may amend its tax return under this chapter to claim
a tax preference requiring a report under this section only when a
report is filed for each calendar year for which the taxpayer is
claiming a tax preference on an amended return. All of the tax
preference accountability reports required under this subsection
(1)(c)(ii) must be filed at the same time the amended returns are
submitted to the department.
(2)(a) The report must include the amount of tax preference claimed
for the calendar year covered by the report if the amount is not
reported to the department directly by the taxpayer as part of the
taxpayer's regular tax reporting obligations under this chapter.
(b) Except as provided in (c) of this subsection, the report must
also include the following information for employment positions in
Washington, not to include names of employees, for the year the tax
preference was claimed:
(i) The total number of employment positions as of December 31st
for the calendar year covered by the report;
(ii) The total wages paid for all employment positions for the
calendar year covered by the report;
(iii) An estimate of the percentage of employees, as of December
31st of the calendar year covered by the report, within each of the
following general job categories: Management occupations; computer,
mathematical, architectural, and engineering occupations; production
occupations; office and administrative support occupations; or any
other occupation type not otherwise specified under this subsection
(2)(b)(iii);
(iv) The percentage of employment positions for which employer-provided medical, dental, and retirement benefits are available.
(c) The taxpayer is not required to provide the employment and wage
information under (b)(i) and (ii) of this subsection if similar
information is reported to the employment security department by the
taxpayer for the same period. For taxpayers reporting to the
employment security department, the total number of employment
positions under (b)(ii) of this subsection is the number of employees
included on the return provided by the taxpayer to the employment
security department for the fourth calendar quarter for the calendar
year covered by the report. A taxpayer must provide the department
with its employment security department account number or numbers.
(d) For persons claiming the credit provided under RCW 82.04.4452,
the report must also include the qualified research and development
expenditures during the calendar year for which the credit was claimed
and whether the tax preference has been assigned, and who assigned the
credit. The definitions in RCW 82.04.4452 apply to this subsection
(2)(d). This subsection (2)(d) only applies to the report due in
calendar year 2014.
(e) For persons claiming the tax exemption in RCW 82.08.025651 or
82.12.025651, the report must also include the general areas or
categories of research and development for which machinery and
equipment and labor and services were acquired, exempt from tax under
RCW 82.08.025651 or 82.12.025651, in the prior calendar year.
(f) If the person filing a report under this section did not file
a report with the department in the previous calendar year, the report
filed under this section must also include the employment, wage, and
benefit information required under (b)(i) through (iv) of this
subsection for the calendar year immediately preceding the calendar
year for which a tax preference was claimed.
(3) As part of the annual report, the department and the joint
legislative audit and review committee may request additional
information necessary to measure the results of, or determine
eligibility for, the tax preference.
(4) Other than information requested under subsection (3) of this
section, information required in this section is not subject to the
confidentiality provisions of RCW 82.32.330 and may be disclosed to the
public upon request, except as provided in subsection (5) of this
section. If the amount of the tax preference claimed as reported on
the report is different than the amount actually claimed or otherwise
allowed by the department based on the taxpayer's excise tax returns or
other information known to the department, the amount actually claimed
or allowed may be disclosed.
(5) Persons for whom the actual amount of the tax reduced or saved
for a tax preference is less than ten thousand dollars during the
period covered by the report may request the department to treat the
amount of the tax reduction or savings as confidential under RCW
82.32.330.
(6)(a) Except as otherwise provided by law, if a person claims a
tax preference that requires an annual report under this section but
fails to submit a complete annual report by the due date of the report
or any extension under RCW 82.32.590, the department must declare the
amount of the tax preference claimed for the previous calendar year to
be immediately due.
(b) If the tax preference is a deferral of tax, and the investment
project has not been certified operationally complete, the department
must declare the amount of tax preference claimed for the previous
calendar year to be immediately due. If the investment project has
been certified operationally complete, twelve and one-half percent of
the deferred tax is immediately due. If the economic benefits of the
deferral are passed to a lessee, the lessee is responsible for payment
to the extent the lessee has received the economic benefit.
(c) The department must assess interest, but not penalties, on the
amounts due under this subsection. The interest must be assessed at
the rate provided for delinquent taxes under this chapter,
retroactively to the date the tax preference was claimed, and accrues
until the taxes for which the tax preference was claimed are repaid.
Amounts due under this subsection are not subject to the
confidentiality provisions of RCW 82.32.330 and may be disclosed to the
public upon request.
(d) If the tax preference is a property tax exemption, the tax
preference amount collected by the department under this subsection
must be distributed in the same manner in which current taxes
applicable to the subject land are distributed.
(7) The department must use the information from this section to
prepare summary descriptive statistics by category. No fewer than
three taxpayers may be included in any category. The department must
report these statistics to the legislature each year by December 1st.
(8) For the purposes of this section:
(a) "Person" has the meaning provided in RCW 82.04.030 and also
includes the state and its departments and institutions.
(b) "Tax preference" has the meaning provided in RCW 43.136.021 and
includes only the tax preferences requiring a survey under this
section.
NEW SECTION. Sec. 202 The following acts or parts of acts are
each repealed:
(1) RCW 82.32.534 (Annual report requirement for tax preferences)
and 2010 c 114 s 103; and
(2) RCW 82.32.585 (Annual survey requirement for tax preferences)
and 2011 c 23 s 6 & 2010 c 114 s 102.
Sec. 203 RCW 82.32.590 and 2011 c 174 s 306 are each amended to
read as follows:
(1) If the department finds that the failure of a taxpayer to file
an annual ((survey under RCW 82.32.585 or annual report under RCW
82.32.534)) report under section 201 of this act by the due date was
the result of circumstances beyond the control of the taxpayer, the
department must extend the time for filing the ((survey or)) report.
The extension is for a period of thirty days from the date the
department issues its written notification to the taxpayer that it
qualifies for an extension under this section. The department may
grant additional extensions as it deems proper.
(2) In making a determination whether the failure of a taxpayer to
file an ((annual survey or)) annual report by the due date was the
result of circumstances beyond the control of the taxpayer, the
department must be guided by rules adopted by the department for the
waiver or cancellation of penalties when the underpayment or untimely
payment of any tax was due to circumstances beyond the control of the
taxpayer.
(3)(a) Subject to the conditions in this subsection (3), a taxpayer
who fails to file an annual report ((or annual survey)) required under
subsection (1) of this section by the due date of the report ((or
survey)) is entitled to an extension of the due date. A request for an
extension under this subsection (3) must be made in writing to the
department.
(b) To qualify for an extension under this subsection (3), a
taxpayer must have filed all annual reports ((and surveys)), if any,
due in prior years under subsection (1) of this section by their
respective due dates, beginning with annual reports ((and surveys)) due
in calendar year 2010.
(c) An extension under this subsection (3) is for ninety days from
the original due date of the annual report ((or survey)).
(d) No taxpayer may be granted more than one ninety-day extension
under this subsection (3).
Sec. 204 RCW 82.32.600 and 2010 c 114 s 136 are each amended to
read as follows:
(1) Persons required to file annual ((surveys or annual reports
under RCW 82.32.534 or 82.32.585)) reports under section 201 of this
act must electronically file with the department all ((surveys,))
reports, returns, and any other forms or information the department
requires in an electronic format as provided or approved by the
department. As used in this section, "returns" has the same meaning as
"return" in RCW 82.32.050.
(2) Any ((survey,)) report, return, or any other form or
information required to be filed in an electronic format under
subsection (1) of this section is not filed until received by the
department in an electronic format.
(3) The department may waive the electronic filing requirement in
subsection (1) of this section for good cause shown.
Sec. 205 RCW 82.32.605 and 2013 2nd sp.s. c 13 s 1004 are each
amended to read as follows:
(1) Every taxpayer claiming an exemption under RCW 82.08.956 or
82.12.956 must file with the department a complete annual ((survey as
required under RCW 82.32.585)) report under section 201 of this act,
except that the taxpayer must file a separate ((survey)) report for
each facility owned or operated in the state of Washington.
(2) This section expires June 30, 2024.
Sec. 206 RCW 82.32.607 and 2013 2nd sp.s. c 13 s 1503 are each
amended to read as follows:
Every taxpayer claiming an exemption under RCW 82.08.962 or
82.12.962 must file with the department a complete annual ((survey as
required under RCW 82.32.585)) report under section 201 of this act,
except that the taxpayer must file a separate ((survey)) report for
each facility owned or operated in the state of Washington developed
with machinery, equipment, services, or labor for which the exemption
under RCW 43.136.058, 82.08.962, and 82.12.962 is claimed.
Sec. 207 RCW 82.32.710 and 2010 c 114 s 137 are each amended to
read as follows:
(1) A client under the terms of a professional employer agreement
is deemed to be the sole employer of a covered employee for purposes of
eligibility for any tax credit, exemption, or other tax incentive,
arising as the result of the employment of covered employees, provided
in RCW 82.04.4333, 82.04.44525, 82.04.448, 82.04.4483, 82.08.965,
82.12.965, 82.16.0495, or 82.60.049 or chapter 82.62 or 82.70 RCW, or
any other provision in this title. A client, and not the professional
employer organization, is entitled to the benefit of any tax credit,
exemption, or other tax incentive arising as the result of the
employment of covered employees of that client.
(2) A client under the terms of a professional employer agreement
is deemed to be the sole employer of a covered employee for purposes of
reports ((or surveys)) that require the reporting of employment
information relating to covered employees of the client, as provided in
((RCW 82.32.534 or 82.32.585)) section 201 of this act. A client, and
not the professional employer organization, is required to complete any
((survey or)) report that requires the reporting of employment
information relating to covered employees of that client.
(3) For the purposes of this section, "client," "covered employee,"
"professional employer agreement," and "professional employer
organization" have the same meanings as in RCW 82.04.540.
Sec. 208 RCW 82.32.808 and 2013 2nd sp.s. c 13 s 1702 are each
amended to read as follows:
(1) As provided in this section, every bill enacting a new tax
preference must include a tax preference performance statement.
(2) A tax preference performance statement must state the
legislative purpose for the new tax preference. The tax preference
performance statement must indicate one or more of the following
general categories, by reference to the applicable category specified
in this subsection, as the legislative purpose of the new tax
preference:
(a) Tax preferences intended to induce certain designated behavior
by taxpayers;
(b) Tax preferences intended to improve industry competitiveness;
(c) Tax preferences intended to create or retain jobs;
(d) Tax preferences intended to reduce structural inefficiencies in
the tax structure;
(e) Tax preferences intended to provide tax relief for certain
businesses or individuals; or
(f) A general purpose not identified in (a) through (e) of this
subsection.
(3) In addition to identifying the general legislative purpose of
the tax preference under subsection (2) of this section, the tax
preference performance statement must provide additional detailed
information regarding the legislative purpose of the new tax
preference.
(4) A new tax preference performance statement must specify clear,
relevant, and ascertainable metrics and data requirements that allow
the joint legislative audit and review committee and the legislature to
measure the effectiveness of the new tax preference in achieving the
purpose designated under subsection (2) of this section.
(5) If the tax preference performance statement for a new tax
preference indicates a legislative purpose described in subsection
(2)(b) or (c) of this section, any taxpayer claiming the new tax
preference must file an annual ((survey)) report in accordance with
((RCW 82.32.585)) section 201 of this act.
(6)(a) Taxpayers claiming a new tax preference must report the
amount of the tax preference claimed by the taxpayer to the department
as otherwise required by statute or determined by the department as
part of the taxpayer's regular tax reporting responsibilities. For new
tax preferences allowing certain types of gross income of the business
to be excluded from business and occupation or public utility taxation,
the tax return must explicitly report the amount of the exclusion,
regardless of whether it is structured as an exemption or deduction, if
the taxpayer is otherwise required to report taxes to the department on
a monthly or quarterly basis. For a new sales and use tax exemption,
the total sales or uses subject to the exemption claimed by the buyer
must be reported on an addendum to the buyer's tax return if the buyer
is otherwise required to report taxes to the department on a monthly or
quarterly basis and the buyer is required to submit an exemption
certificate, or similar document, to the seller.
(b) This subsection does not apply to:
(i) Property tax exemptions;
(ii) Tax preferences required by constitutional law;
(iii) Tax preferences for which the tax benefit to the taxpayer is
less than one thousand dollars per calendar year; or
(iv) Taxpayers who are annual filers.
(c) The department may waive the filing requirements of this
subsection for taxpayers who are not required to file electronically
any return((,)) or report((, or survey)) under this chapter.
(7)(a) Except as otherwise provided in this subsection, the amount
claimed by a taxpayer for any new tax preference is subject to public
disclosure and is not considered confidential tax information under RCW
82.32.330, if the reporting periods subject to disclosure ended at
least twenty-four months prior to the date of disclosure and the
taxpayer is required to report the amount of the tax preference claimed
by the taxpayer to the department under subsection (6) of this section.
(b)(i) The department may waive the public disclosure requirement
under (a) of this subsection (7) for good cause. Good cause may be
demonstrated by a reasonable showing of economic harm to a taxpayer if
the information specified under this subsection is disclosed. The
waiver under this subsection (7)(b)(i) only applies to the new tax
preferences provided in chapter 13, Laws of 2013 2nd sp. sess.
(ii) The amount of the tax preference claimed by a taxpayer during
a calendar year is confidential under RCW 82.32.330 and may not be
disclosed under this subsection if the amount for the calendar year is
less than ten thousand dollars.
(c) In lieu of the disclosure and waiver requirements under this
subsection, the requirements under ((RCW 82.32.585)) section 201 of
this act apply to any tax preference that requires a ((survey)) report.
(8) If a new tax preference does not include the information
required under subsections (2) through (4) of this section, the joint
legislative audit and review committee is not required to perform a tax
preference review under chapter 43.136 RCW, and it is legislatively
presumed that it is the intent of the legislature to allow the new tax
preference to expire upon its scheduled expiration date.
(9) For the purposes of this section, "tax preference" and "new tax
preference" have the same meaning as provided in RCW 82.32.805.
Sec. 209 RCW 82.04.240 and 2010 c 114 s 104 are each amended to
read as follows:
(1) Upon every person engaging within this state in business as a
manufacturer, except persons taxable as manufacturers under other
provisions of this chapter; as to such persons the amount of the tax
with respect to such business is equal to the value of the products,
including byproducts, manufactured, multiplied by the rate of 0.484
percent.
(2)(a) Upon every person engaging within this state in the business
of manufacturing semiconductor materials, 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, or, in the case of
processors for hire, equal to the gross income of the business,
multiplied by the rate of 0.275 percent. For the purposes of this
subsection "semiconductor materials" means silicon crystals, silicon
ingots, raw polished semiconductor wafers, compound semiconductors,
integrated circuits, and microchips.
(b) A person reporting under the tax rate provided in this
subsection (2) must file a complete annual report with the department
under ((RCW 82.32.534)) section 201 of this act.
(c) This subsection (2) expires twelve years after the effective
date of this act.
(3) The measure of the tax is the value of the products, including
byproducts, so manufactured regardless of the place of sale or the fact
that deliveries may be made to points outside the state.
Sec. 210 RCW 82.04.2404 and 2010 c 114 s 105 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business of
manufacturing or processing for hire semiconductor materials, 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,
or, in the case of processors for hire, equal to the gross income of
the business, multiplied by the rate of 0.275 percent.
(2) For the purposes of this section "semiconductor materials"
means silicon crystals, silicon ingots, raw polished semiconductor
wafers, and compound semiconductor wafers.
(3) A person reporting under the tax rate provided in this section
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(4) This section expires December 1, 2018.
Sec. 211 RCW 82.04.260 and 2013 2nd sp.s. c 13 s 202 are each
amended to read as follows:
(1) 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, 2015, 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)(i) Beginning July 1, 2015, dairy products; or selling dairy
products that the person has manufactured to purchasers who either
transport in the ordinary course of business the goods out of state or
purchasers who use such dairy products as an ingredient or component in
the manufacturing of a dairy product; 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
or sold to a manufacturer for use as an ingredient or component in the
manufacturing of a dairy product.
(ii) For the purposes of this subsection (1)(c), "dairy products"
means:
(A) 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; and
(B) Products comprised of not less than seventy percent dairy
products that qualify under (c)(ii)(A) of this subsection, measured by
weight or volume.
(iii) The preferential tax rate provided to taxpayers under this
subsection (1)(c) does not apply to sales of dairy products on or after
July 1, 2023, where a dairy product is used by the purchaser as an
ingredient or component in the manufacturing in Washington of a dairy
product;
(d) Beginning July 1, 2015, 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) 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) 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)) section 201 of this act.
(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)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(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.
(14)(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 0.365 percent through June 30, 2013,
and beginning July 1, 2013, multiplied by the rate of 0.35 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)) section 201 of this act.
Sec. 212 RCW 82.04.260 and 2013 2nd sp.s. c 13 s 203 are each
amended to read as follows:
(1) 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, 2015, 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)(i) Beginning July 1, 2015, dairy products; or selling dairy
products that the person has manufactured to purchasers who either
transport in the ordinary course of business the goods out of state or
purchasers who use such dairy products as an ingredient or component in
the manufacturing of a dairy product; 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
or sold to a manufacturer for use as an ingredient or component in the
manufacturing of a dairy product.
(ii) For the purposes of this subsection (1)(c), "dairy products"
means:
(A) 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; and
(B) Products comprised of not less than seventy percent dairy
products that qualify under (c)(ii)(A) of this subsection, measured by
weight or volume.
(iii) The preferential tax rate provided to taxpayers under this
subsection (1)(c) does not apply to sales of dairy products on or after
July 1, 2023, where a dairy product is used by the purchaser as an
ingredient or component in the manufacturing in Washington of a dairy
product;
(d) Beginning July 1, 2015, 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)(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.
(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.
(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)) section 201 of this act.
(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)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(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.
(14)(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.
(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)) section 201 of this act.
Sec. 213 RCW 82.04.260 and 2013 3rd sp.s. c 2 s 5 are each
amended to read as follows:
(1) 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, 2015, 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)(i) Beginning July 1, 2015, dairy products; or selling dairy
products that the person has manufactured to purchasers who either
transport in the ordinary course of business the goods out of state or
purchasers who use such dairy products as an ingredient or component in
the manufacturing of a dairy product; 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
or sold to a manufacturer for use as an ingredient or component in the
manufacturing of a dairy product.
(ii) For the purposes of this subsection (1)(c), "dairy products"
means:
(A) 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; and
(B) Products comprised of not less than seventy percent dairy
products that qualify under (c)(ii)(A) of this subsection, measured by
weight or volume.
(iii) The preferential tax rate provided to taxpayers under this
subsection (1)(c) does not apply to sales of dairy products on or after
July 1, 2023, where a dairy product is used by the purchaser as an
ingredient or component in the manufacturing in Washington of a dairy
product;
(d) Beginning July 1, 2015, 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)(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.
(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.
(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)) section 201 of this act.
(e)(i) Except as provided in (e)(ii) of this subsection (11), this
subsection (11) does not apply on and after July 1, 2040.
(ii) With respect to the manufacturing of commercial airplanes or
making sales, at retail or wholesale, of commercial airplanes, this
subsection (11) does not apply on and after July 1st of the year in
which the department makes a determination that any final assembly or
wing assembly of any version or variant of a commercial airplane that
is the basis of a siting of a significant commercial airplane
manufacturing program in the state under RCW 82.32.850 has been sited
outside the state of Washington. This subsection (11)(e)(ii) only
applies to the manufacturing or sale of commercial airplanes that are
the basis of a siting of a significant commercial airplane
manufacturing program in the state under RCW 82.32.850.
(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)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(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.
(14)(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 0.365 percent through June 30, 2013,
and beginning July 1, 2013, multiplied by the rate of 0.35 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)) section 201 of this act.
Sec. 214 RCW 82.04.260 and 2013 3rd sp.s. c 2 s 6 are each
amended to read as follows:
(1) 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, 2015, 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)(i) Beginning July 1, 2015, dairy products; or selling dairy
products that the person has manufactured to purchasers who either
transport in the ordinary course of business the goods out of state or
purchasers who use such dairy products as an ingredient or component in
the manufacturing of a dairy product; 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
or sold to a manufacturer for use as an ingredient or component in the
manufacturing of a dairy product.
(ii) For the purposes of this subsection (1)(c), "dairy products"
means:
(A) 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; and
(B) Products comprised of not less than seventy percent dairy
products that qualify under (c)(ii)(A) of this subsection, measured by
weight or volume.
(iii) The preferential tax rate provided to taxpayers under this
subsection (1)(c) does not apply to sales of dairy products on or after
July 1, 2023, where a dairy product is used by the purchaser as an
ingredient or component in the manufacturing in Washington of a dairy
product;
(d) Beginning July 1, 2015, 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)(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.
(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.
(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)) section 201 of this act.
(e)(i) Except as provided in (e)(ii) of this subsection (11), this
subsection (11) does not apply on and after July 1, 2040.
(ii) With respect to the manufacturing of commercial airplanes or
making sales, at retail or wholesale, of commercial airplanes, this
subsection (11) does not apply on and after July 1st of the year in
which the department makes a determination that any final assembly or
wing assembly of any version or variant of a commercial airplane that
is the basis of a siting of a significant commercial airplane
manufacturing program in the state under RCW 82.32.850 has been sited
outside the state of Washington. This subsection (11)(e)(ii) only
applies to the manufacturing or sale of commercial airplanes that are
the basis of a siting of a significant commercial airplane
manufacturing program in the state under RCW 82.32.850.
(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)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(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.
(14)(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.
(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)) section 201 of this act.
Sec. 215 RCW 82.04.2909 and 2011 c 174 s 301 are each amended to
read as follows:
(1) Upon every person who is an aluminum smelter engaging within
this state in the business of manufacturing aluminum; 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, or in
the case of processors for hire, equal to the gross income of the
business, multiplied by the rate of .2904 percent.
(2) Upon every person who is an aluminum smelter engaging within
this state in the business of making sales at wholesale of aluminum
manufactured by that person, as to such persons the amount of tax with
respect to such business is equal to the gross proceeds of sales of the
aluminum multiplied by the rate of .2904 percent.
(3) A person reporting under the tax rate provided in this section
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(4) This section expires January 1, 2017.
Sec. 216 RCW 82.04.294 and 2013 2nd sp.s. c 13 s 902 are each
amended to read as follows:
(1) Upon every person engaging within this state in the business of
manufacturing solar energy systems using photovoltaic modules or
stirling converters, or of manufacturing solar grade silicon, silicon
solar wafers, silicon solar cells, thin film solar devices, or compound
semiconductor solar wafers to be used exclusively in components of such
systems; 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, or in the case of processors for hire, equal to
the gross income of the business, multiplied by the rate of 0.275
percent.
(2) Upon every person engaging within this state in the business of
making sales at wholesale of solar energy systems using photovoltaic
modules or stirling converters, or of solar grade silicon, silicon
solar wafers, silicon solar cells, thin film solar devices, or compound
semiconductor solar wafers to be used exclusively in components of such
systems, manufactured by that person; as to such persons the amount of
tax with respect to such business is equal to the gross proceeds of
sales of the solar energy systems using photovoltaic modules or
stirling converters, or of the solar grade silicon to be used
exclusively in components of such systems, multiplied by the rate of
0.275 percent.
(3) Silicon solar wafers, silicon solar cells, thin film solar
devices, solar grade silicon, or compound semiconductor solar wafers
are "semiconductor materials" for the purposes of RCW 82.08.9651 and
82.12.9651.
(4) 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) "Silicon solar cells" means a photovoltaic cell manufactured
from a silicon solar wafer.
(e) "Silicon solar wafers" means a silicon wafer manufactured for
solar conversion purposes.
(f) "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.
(g) "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.
(h) "Stirling converter" means a device that produces electricity
by converting heat from a solar source utilizing a stirling engine.
(i) "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.
(5) A person reporting under the tax rate provided in this section
must file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(6) This section expires June 30, 2017.
Sec. 217 RCW 82.04.426 and 2010 c 114 s 110 are each amended to
read as follows:
(1) The tax imposed by RCW 82.04.240(2) does not apply to any
person in respect to the manufacturing of semiconductor microchips.
(2) For the purposes of this section:
(a) "Manufacturing semiconductor microchips" means taking raw
polished semiconductor wafers and embedding integrated circuits on the
wafers using processes such as masking, etching, and diffusion; and
(b) "Integrated circuit" means a set of microminiaturized,
electronic circuits.
(3) A person reporting under the tax rate provided in this section
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(4) This section expires nine years after the effective date of
this act.
Sec. 218 RCW 82.04.4266 and 2012 2nd sp.s. c 6 s 201 are each
amended to read as follows:
(1) This chapter does not apply to the value of products or the
gross proceeds of sales derived from:
(a) Manufacturing fruits or vegetables by canning, preserving,
freezing, processing, or dehydrating fresh fruits or vegetables; or
(b) 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. A person
taking an exemption under this subsection (1)(b) 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.
(2) A person claiming the exemption provided in this section must
file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(3) This section expires July 1, 2015.
Sec. 219 RCW 82.04.4268 and 2013 2nd sp.s. c 13 s 204 are each
amended to read as follows:
(1) In computing tax there may be deducted from the measure of tax,
the value of products or the gross proceeds of sales derived from:
(a) Manufacturing dairy products; or
(b) Selling dairy products manufactured by the seller to purchasers
who either transport in the ordinary course of business the goods out
of this state or purchasers who use such dairy products as an
ingredient or component in the manufacturing of a dairy product. A
person taking an exemption under this subsection (1)(b) 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 or sold to a manufacturer for use as an
ingredient or component in the manufacturing of a dairy product.
(2) "Dairy products" has the same meaning as provided in RCW
82.04.260.
(3) A person claiming the exemption provided in this section must
file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(4) This section expires July 1, 2015.
Sec. 220 RCW 82.04.4269 and 2012 2nd sp.s. c 6 s 203 are each
amended to read as follows:
(1) This chapter does not apply to the value of products or the
gross proceeds of sales derived from:
(a) Manufacturing seafood products that remain in a raw, raw
frozen, or raw salted state at the completion of the manufacturing by
that person; or
(b) Selling manufactured seafood products that remain in a raw, raw
frozen, or raw salted state to purchasers who transport in the ordinary
course of business the goods out of this state. A person taking an
exemption under this subsection (1)(b) 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.
(2) A person claiming the exemption provided in this section must
file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act.
(3) This section expires July 1, 2015.
Sec. 221 RCW 82.04.4277 and 2011 1st sp.s. c 19 s 1 are each
amended to read as follows:
(1) A health or social welfare organization may deduct from the
measure of tax amounts received as compensation for providing mental
health services under a government-funded program.
(2) A regional support network may deduct from the measure of tax
amounts received from the state of Washington for distribution to a
health or social welfare organization that is eligible to deduct the
distribution under subsection (1) of this section.
(3) A person claiming a deduction under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act.
(4) The definitions in this subsection apply to this section.
(a) "Health or social welfare organization" has the meaning
provided in RCW 82.04.431.
(b) "Mental health services" and "regional support network" have
the meanings provided in RCW 71.24.025.
(5) This section expires August 1, 2016.
Sec. 222 RCW 82.04.4452 and 2010 c 114 s 114 are each amended to
read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for each person whose research and development spending during
the year in which the credit is claimed exceeds 0.92 percent of the
person's taxable amount during the same calendar year.
(2) The credit is calculated as follows:
(a) Determine the greater of the amount of qualified research and
development expenditures of a person or eighty percent of amounts
received by a person other than a public educational or research
institution in compensation for the conduct of qualified research and
development;
(b) Subtract 0.92 percent of the person's taxable amount from the
amount determined under (a) of this subsection;
(c) Multiply the amount determined under (b) of this subsection by
the following:
(i) For the period June 10, 2004, through December 31, 2006, the
person's average tax rate for the calendar year for which the credit is
claimed;
(ii) For the calendar year ending December 31, 2007, the greater of
the person's average tax rate for that calendar year or 0.75 percent;
(iii) For the calendar year ending December 31, 2008, the greater
of the person's average tax rate for that calendar year or 1.0 percent;
(iv) For the calendar year ending December 31, 2009, the greater of
the person's average tax rate for that calendar year or 1.25 percent;
(v) For the calendar year ending December 31, 2010, and thereafter,
1.50 percent.
For purposes of calculating the credit, if a person's reporting
period is less than annual, the person may use an estimated average tax
rate for the calendar year for which the credit is claimed by using the
person's average tax rate for each reporting period. A person who uses
an estimated average tax rate must make an adjustment to the total
credit claimed for the calendar year using the person's actual average
tax rate for the calendar year when the person files its last return
for the calendar year for which the credit is claimed.
(3) Any person entitled to the credit provided in subsection (2) of
this section as a result of qualified research and development
conducted under contract may assign all or any portion of the credit to
the person contracting for the performance of the qualified research
and development.
(4) The credit, including any credit assigned to a person under
subsection (3) of this section, must be claimed against taxes due for
the same calendar year in which the qualified research and development
expenditures are incurred. The credit, including any credit assigned
to a person under subsection (3) of this section, for each calendar
year may not exceed the lesser of two million dollars or the amount of
tax otherwise due under this chapter for the calendar year.
(5) For any person claiming the credit, including any credit
assigned to a person under subsection (3) of this section, whose
research and development spending during the calendar year in which the
credit is claimed fails to exceed 0.92 percent of the person's taxable
amount during the same calendar year or who is otherwise ineligible,
the department must declare the taxes against which the credit was
claimed to be immediately due and payable. The department must assess
interest, but not penalties, on the taxes against which the credit was
claimed. Interest must be assessed at the rate provided for delinquent
excise taxes under chapter 82.32 RCW, retroactively to the date the
credit was claimed, and accrues until the taxes against which the
credit was claimed are repaid. Any credit assigned to a person under
subsection (3) of this section that is disallowed as a result of this
section may be claimed by the person who performed the qualified
research and development subject to the limitations set forth in
subsection (4) of this section.
(6) A person claiming the credit provided in this section must file
a complete annual ((survey)) report with the department under ((RCW
82.32.585)) section 201 of this act.
(7) For the purpose of this section:
(a) "Average tax rate" means a person's total tax liability under
this chapter for the calendar year for which the credit is claimed
divided by the taxpayer's total taxable amount under this chapter for
the calendar year for which the credit is claimed.
(b) "Qualified research and development expenditures" means
operating expenses, including wages, compensation of a proprietor or a
partner in a partnership as determined under rules adopted by the
department, benefits, supplies, and computer expenses, directly
incurred in qualified research and development by a person claiming the
credit provided in this section. The term does not include amounts
paid to a person other than a public educational or research
institution to conduct qualified research and development. Nor does
the term include capital costs and overhead, such as expenses for land,
structures, or depreciable property.
(c) "Qualified research and development" ((shall have)) has the
same meaning as in RCW 82.63.010.
(d) "Research and development spending" means qualified research
and development expenditures plus eighty percent of amounts paid to a
person other than a public educational or research institution to
conduct qualified research and development.
(e) "Taxable amount" means the taxable amount subject to the tax
imposed in this chapter required to be reported on the person's
combined excise tax returns for the calendar year for which the credit
is claimed, less any taxable amount for which a credit is allowed under
RCW 82.04.440.
(8) This section expires January 1, 2015.
Sec. 223 RCW 82.04.4461 and 2010 c 114 s 115 are each amended to
read as follows:
(1)(a)(i) In computing the tax imposed under this chapter, a credit
is allowed for each person for qualified aerospace product development.
For a person who is a manufacturer or processor for hire of commercial
airplanes or components of such airplanes, credit may be earned for
expenditures occurring after December 1, 2003. For all other persons,
credit may be earned only for expenditures occurring after June 30,
2008.
(ii) For purposes of this subsection, "commercial airplane" and
"component" have the same meanings as provided in RCW 82.32.550.
(b) Before July 1, 2005, any credits earned under this section must
be accrued and carried forward and may not be used until July 1, 2005.
These carryover credits may be used at any time thereafter, and may be
carried over until used. Refunds may not be granted in the place of a
credit.
(2) The credit is equal to the amount of qualified aerospace
product development expenditures of a person, multiplied by the rate of
1.5 percent.
(3) Except as provided in subsection (1)(b) of this section the
credit must be claimed against taxes due for the same calendar year in
which the qualified aerospace product development expenditures are
incurred. Credit earned on or after July 1, 2005, may not be carried
over. The credit for each calendar year may not exceed the amount of
tax otherwise due under this chapter for the calendar year. Refunds
may not be granted in the place of a credit.
(4) Any person claiming the credit must file a form prescribed by
the department that must include the amount of the credit claimed, an
estimate of the anticipated aerospace product development expenditures
during the calendar year for which the credit is claimed, an estimate
of the taxable amount during the calendar year for which the credit is
claimed, and such additional information as the department may
prescribe.
(5) The definitions in this subsection apply throughout this
section.
(a) "Aerospace product" has the meaning given in RCW 82.08.975.
(b) "Aerospace product development" means research, design, and
engineering activities performed in relation to the development of an
aerospace product or of a product line, model, or model derivative of
an aerospace product, including prototype development, testing, and
certification. The term includes the discovery of technological
information, the translating of technological information into new or
improved products, processes, techniques, formulas, or inventions, and
the adaptation of existing products and models into new products or new
models, or derivatives of products or models. The term does not
include manufacturing activities or other production-oriented
activities, however the term does include tool design and engineering
design for the manufacturing process. The term does not include
surveys and studies, social science and humanities research, market
research or testing, quality control, sale promotion and service,
computer software developed for internal use, and research in areas
such as improved style, taste, and seasonal design.
(c) "Qualified aerospace product development" means aerospace
product development performed within this state.
(d) "Qualified aerospace product development expenditures" means
operating expenses, including wages, compensation of a proprietor or a
partner in a partnership as determined by the department, benefits,
supplies, and computer expenses, directly incurred in qualified
aerospace product development by a person claiming the credit provided
in this section. The term does not include amounts paid to a person or
to the state and any of its departments and institutions, other than a
public educational or research institution to conduct qualified
aerospace product development. The term does not include capital costs
and overhead, such as expenses for land, structures, or depreciable
property.
(e) "Taxable amount" means the taxable amount subject to the tax
imposed in this chapter required to be reported on the person's tax
returns during the year in which the credit is claimed, less any
taxable amount for which a credit is allowed under RCW 82.04.440.
(6) In addition to all other requirements under this title, a
person claiming the credit under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(7) Credit may not be claimed for expenditures for which a credit
is claimed under RCW 82.04.4452.
(8) This section expires July 1, 2024.
Sec. 224 RCW 82.04.4461 and 2013 3rd sp.s. c 2 s 9 are each
amended to read as follows:
(1)(a)(i) In computing the tax imposed under this chapter, a credit
is allowed for each person for qualified aerospace product development.
For a person who is a manufacturer or processor for hire of commercial
airplanes or components of such airplanes, credit may be earned for
expenditures occurring after December 1, 2003. For all other persons,
credit may be earned only for expenditures occurring after June 30,
2008.
(ii) For purposes of this subsection, "commercial airplane" and
"component" have the same meanings as provided in RCW 82.32.550.
(b) Before July 1, 2005, any credits earned under this section must
be accrued and carried forward and may not be used until July 1, 2005.
These carryover credits may be used at any time thereafter, and may be
carried over until used. Refunds may not be granted in the place of a
credit.
(2) The credit is equal to the amount of qualified aerospace
product development expenditures of a person, multiplied by the rate of
1.5 percent.
(3) Except as provided in subsection (1)(b) of this section the
credit must be claimed against taxes due for the same calendar year in
which the qualified aerospace product development expenditures are
incurred. Credit earned on or after July 1, 2005, may not be carried
over. The credit for each calendar year may not exceed the amount of
tax otherwise due under this chapter for the calendar year. Refunds
may not be granted in the place of a credit.
(4) Any person claiming the credit must file a form prescribed by
the department that must include the amount of the credit claimed, an
estimate of the anticipated aerospace product development expenditures
during the calendar year for which the credit is claimed, an estimate
of the taxable amount during the calendar year for which the credit is
claimed, and such additional information as the department may
prescribe.
(5) The definitions in this subsection apply throughout this
section.
(a) "Aerospace product" has the meaning given in RCW 82.08.975.
(b) "Aerospace product development" means research, design, and
engineering activities performed in relation to the development of an
aerospace product or of a product line, model, or model derivative of
an aerospace product, including prototype development, testing, and
certification. The term includes the discovery of technological
information, the translating of technological information into new or
improved products, processes, techniques, formulas, or inventions, and
the adaptation of existing products and models into new products or new
models, or derivatives of products or models. The term does not
include manufacturing activities or other production-oriented
activities, however the term does include tool design and engineering
design for the manufacturing process. The term does not include
surveys and studies, social science and humanities research, market
research or testing, quality control, sale promotion and service,
computer software developed for internal use, and research in areas
such as improved style, taste, and seasonal design.
(c) "Qualified aerospace product development" means aerospace
product development performed within this state.
(d) "Qualified aerospace product development expenditures" means
operating expenses, including wages, compensation of a proprietor or a
partner in a partnership as determined by the department, benefits,
supplies, and computer expenses, directly incurred in qualified
aerospace product development by a person claiming the credit provided
in this section. The term does not include amounts paid to a person or
to the state and any of its departments and institutions, other than a
public educational or research institution to conduct qualified
aerospace product development. The term does not include capital costs
and overhead, such as expenses for land, structures, or depreciable
property.
(e) "Taxable amount" means the taxable amount subject to the tax
imposed in this chapter required to be reported on the person's tax
returns during the year in which the credit is claimed, less any
taxable amount for which a credit is allowed under RCW 82.04.440.
(6) In addition to all other requirements under this title, a
person claiming the credit under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(7) Credit may not be claimed for expenditures for which a credit
is claimed under RCW 82.04.4452.
(8) This section expires July 1, 2040.
Sec. 225 RCW 82.04.4463 and 2010 1st sp.s. c 23 s 515 are each
amended to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for property taxes and leasehold excise taxes paid during the
calendar year.
(2) The credit is equal to:
(a)(i)(A) Property taxes paid on buildings, and land upon which the
buildings are located, constructed after December 1, 2003, and used
exclusively in manufacturing commercial airplanes or components of such
airplanes; and
(B) Leasehold excise taxes paid with respect to buildings
constructed after January 1, 2006, the land upon which the buildings
are located, or both, if the buildings are used exclusively in
manufacturing commercial airplanes or components of such airplanes; and
(C) Property taxes or leasehold excise taxes paid on, or with
respect to, buildings constructed after June 30, 2008, the land upon
which the buildings are located, or both, and used exclusively for
aerospace product development, manufacturing tooling specifically
designed for use in manufacturing commercial airplanes or their
components, or in providing aerospace services, by persons not within
the scope of (a)(i)(A) and (B) of this subsection (2) and are taxable
under RCW 82.04.290(3), 82.04.260(((10))) (11)(b), or 82.04.250(3); or
(ii) Property taxes attributable to an increase in assessed value
due to the renovation or expansion, after: (A) December 1, 2003, of a
building used exclusively in manufacturing commercial airplanes or
components of such airplanes; and (B) June 30, 2008, of buildings used
exclusively for aerospace product development, manufacturing tooling
specifically designed for use in manufacturing commercial airplanes or
their components, or in providing aerospace services, by persons not
within the scope of (a)(ii)(A) of this subsection (2) and are taxable
under RCW 82.04.290(3), 82.04.260(((10))) (11)(b), or 82.04.250(3); and
(b) An amount equal to:
(i)(A) Property taxes paid, by persons taxable under RCW
82.04.260(((10))) (11)(a), on machinery and equipment exempt under RCW
82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
(B) Property taxes paid, by persons taxable under RCW
82.04.260(((10))) (11)(b), on machinery and equipment exempt under RCW
82.08.02565 or 82.12.02565 and acquired after June 30, 2008; or
(C) Property taxes paid, by persons taxable under RCW 82.04.250(3)
or 82.04.290(3), on computer hardware, computer peripherals, and
software exempt under RCW 82.08.975 or 82.12.975 and acquired after
June 30, 2008.
(ii) For purposes of determining the amount eligible for credit
under (i)(A) and (B) of this subsection (2)(b), the amount of property
taxes paid is multiplied by a fraction.
(A) The numerator of the fraction is the total taxable amount
subject to the tax imposed under RCW 82.04.260(((10))) (11) (a) or (b)
on the applicable business activities of manufacturing commercial
airplanes, components of such airplanes, or tooling specifically
designed for use in the manufacturing of commercial airplanes or
components of such airplanes.
(B) The denominator of the fraction is the total taxable amount
subject to the tax imposed under all manufacturing classifications in
chapter 82.04 RCW.
(C) For purposes of both the numerator and denominator of the
fraction, the total taxable amount refers to the total taxable amount
required to be reported on the person's returns for the calendar year
before the calendar year in which the credit under this section is
earned. The department may provide for an alternative method for
calculating the numerator in cases where the tax rate provided in RCW
82.04.260(((10))) (11) for manufacturing was not in effect during the
full calendar year before the calendar year in which the credit under
this section is earned.
(D) No credit is available under (b)(i)(A) or (B) of this
subsection (2) if either the numerator or the denominator of the
fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
(E) As used in (b)(ii)(C) of this subsection (2), "returns" means
the tax returns for which the tax imposed under this chapter is
reported to the department.
(3) The definitions in this subsection apply throughout this
section, unless the context clearly indicates otherwise.
(a) "Aerospace product development" has the same meaning as
provided in RCW 82.04.4461.
(b) "Aerospace services" has the same meaning given in RCW
82.08.975.
(c) "Commercial airplane" and "component" have the same meanings as
provided in RCW 82.32.550.
(4) A credit earned during one calendar year may be carried over to
be credited against taxes incurred in a subsequent calendar year, but
may not be carried over a second year. No refunds may be granted for
credits under this section.
(5) In addition to all other requirements under this title, a
person claiming the credit under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(6) This section expires July 1, 2024.
Sec. 226 RCW 82.04.4463 and 2013 3rd sp.s. c 2 s 10 are each
amended to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for property taxes and leasehold excise taxes paid during the
calendar year.
(2) The credit is equal to:
(a)(i)(A) Property taxes paid on buildings, and land upon which the
buildings are located, constructed after December 1, 2003, and used
exclusively in manufacturing commercial airplanes or components of such
airplanes; and
(B) Leasehold excise taxes paid with respect to buildings
constructed after January 1, 2006, the land upon which the buildings
are located, or both, if the buildings are used exclusively in
manufacturing commercial airplanes or components of such airplanes; and
(C) Property taxes or leasehold excise taxes paid on, or with
respect to, buildings constructed after June 30, 2008, the land upon
which the buildings are located, or both, and used exclusively for
aerospace product development, manufacturing tooling specifically
designed for use in manufacturing commercial airplanes or their
components, or in providing aerospace services, by persons not within
the scope of (a)(i)(A) and (B) of this subsection (2) and are taxable
under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); or
(ii) Property taxes attributable to an increase in assessed value
due to the renovation or expansion, after: (A) December 1, 2003, of a
building used exclusively in manufacturing commercial airplanes or
components of such airplanes; and (B) June 30, 2008, of buildings used
exclusively for aerospace product development, manufacturing tooling
specifically designed for use in manufacturing commercial airplanes or
their components, or in providing aerospace services, by persons not
within the scope of (a)(ii)(A) of this subsection (2) and are taxable
under RCW 82.04.290(3), 82.04.260(11)(b), or 82.04.250(3); and
(b) An amount equal to:
(i)(A) Property taxes paid, by persons taxable under RCW
82.04.260(11)(a), on machinery and equipment exempt under RCW
82.08.02565 or 82.12.02565 and acquired after December 1, 2003;
(B) Property taxes paid, by persons taxable under RCW
82.04.260(11)(b), on machinery and equipment exempt under RCW
82.08.02565 or 82.12.02565 and acquired after June 30, 2008; or
(C) Property taxes paid, by persons taxable under RCW 82.04.250(3)
or 82.04.290(3), on computer hardware, computer peripherals, and
software exempt under RCW 82.08.975 or 82.12.975 and acquired after
June 30, 2008.
(ii) For purposes of determining the amount eligible for credit
under (i)(A) and (B) of this subsection (2)(b), the amount of property
taxes paid is multiplied by a fraction.
(A) The numerator of the fraction is the total taxable amount
subject to the tax imposed under RCW 82.04.260(11) (a) or (b) on the
applicable business activities of manufacturing commercial airplanes,
components of such airplanes, or tooling specifically designed for use
in the manufacturing of commercial airplanes or components of such
airplanes.
(B) The denominator of the fraction is the total taxable amount
subject to the tax imposed under all manufacturing classifications in
chapter 82.04 RCW.
(C) For purposes of both the numerator and denominator of the
fraction, the total taxable amount refers to the total taxable amount
required to be reported on the person's returns for the calendar year
before the calendar year in which the credit under this section is
earned. The department may provide for an alternative method for
calculating the numerator in cases where the tax rate provided in RCW
82.04.260(11) for manufacturing was not in effect during the full
calendar year before the calendar year in which the credit under this
section is earned.
(D) No credit is available under (b)(i)(A) or (B) of this
subsection (2) if either the numerator or the denominator of the
fraction is zero. If the fraction is greater than or equal to nine-tenths, then the fraction is rounded to one.
(E) As used in (b)(ii)(C) of this subsection (2), "returns" means
the tax returns for which the tax imposed under this chapter is
reported to the department.
(3) The definitions in this subsection apply throughout this
section, unless the context clearly indicates otherwise.
(a) "Aerospace product development" has the same meaning as
provided in RCW 82.04.4461.
(b) "Aerospace services" has the same meaning given in RCW
82.08.975.
(c) "Commercial airplane" and "component" have the same meanings as
provided in RCW 82.32.550.
(4) A credit earned during one calendar year may be carried over to
be credited against taxes incurred in a subsequent calendar year, but
may not be carried over a second year. No refunds may be granted for
credits under this section.
(5) In addition to all other requirements under this title, a
person claiming the credit under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(6) This section expires July 1, 2040.
Sec. 227 RCW 82.04.448 and 2010 c 114 s 117 are each amended to
read as follows:
(1) Subject to the limits and provisions of this section, a credit
is authorized against the tax otherwise due under RCW 82.04.240(2) for
persons engaged in the business of manufacturing semiconductor
materials. For the purposes of this section "semiconductor materials"
has the same meaning as provided in RCW 82.04.240(2).
(2)(a) The credit under this section equals three thousand dollars
for each employment position used in manufacturing production that
takes place in a new building exempt from sales and use tax under RCW
82.08.965 and 82.12.965. A credit is earned for the calendar year a
person fills a position. Additionally a credit is earned for each year
the position is maintained over the subsequent consecutive years, up to
eight years. Those positions that are not filled for the entire year
are eligible for fifty percent of the credit if filled less than six
months, and the entire credit if filled more than six months.
(b) To qualify for the credit, the manufacturing activity of the
person must be conducted at a new building that qualifies for the
exemption from sales and use tax under RCW 82.08.965 and 82.12.965.
(c) In those situations where a production building in existence on
the effective date of this section will be phased out of operation,
during which time employment at the new building at the same site is
increased, the person is eligible for credit for employment at the
existing building and new building, with the limitation that the
combined eligible employment not exceed full employment at the new
building. "Full employment" has the same meaning as in RCW 82.08.965.
The credit may not be earned until the commencement of commercial
production, as that term is used in RCW 82.08.965.
(3) No application is necessary for the tax credit. The person is
subject to all of the requirements of chapter 82.32 RCW. In no case
may a credit earned during one calendar year be carried over to be
credited against taxes incurred in a subsequent calendar year. No
refunds may be granted for credits under this section.
(4) If at any time the department finds that a person is not
eligible for tax credit under this section, the amount of taxes for
which a credit has been claimed is immediately due. The department
must assess interest, but not penalties, on the taxes for which the
person is not eligible. The interest must be assessed at the rate
provided for delinquent excise taxes under chapter 82.32 RCW, is
retroactive to the date the tax credit was taken, and accrues until the
taxes for which a credit has been used are repaid.
(5) A person claiming the credit under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act.
(6) Credits may be claimed after twelve years after the effective
date of this act, for those buildings at which commercial production
began before twelve years after the effective date of this act, subject
to all of the eligibility criteria and limitations of this section.
(7) This section expires twelve years after the effective date of
this act.
Sec. 228 RCW 82.04.4481 and 2011 c 174 s 302 are each amended to
read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for all property taxes paid during the calendar year on
property owned by a direct service industrial customer and reasonably
necessary for the purposes of an aluminum smelter.
(2) A person claiming the credit under this section is subject to
all the requirements of chapter 82.32 RCW. A credit earned during one
calendar year may be carried over to be credited against taxes incurred
in the subsequent calendar year, but may not be carried over a second
year. Credits carried over must be applied to tax liability before new
credits. No refunds may be granted for credits under this section.
(3) Credits may not be claimed under this section for property
taxes levied for collection in 2017 and thereafter.
(4) A person claiming the credit provided in this section must file
a complete annual report with the department under ((RCW 82.32.534))
section 201 of this act.
Sec. 229 RCW 82.04.4483 and 2010 c 114 s 119 are each amended to
read as follows:
(1) Subject to the limits and provisions of this section, a credit
is authorized against the tax otherwise due under this chapter for
persons engaged in a rural county in the business of manufacturing
computer software or programming, as those terms are defined in this
section.
(2) A person who partially or totally relocates a business from one
rural county to another rural county is eligible for any new qualifying
employment positions created as a result of the relocation but is not
eligible to receive credit for the jobs moved from one county to the
other.
(3)(a) To qualify for the credit, the qualifying activity of the
person must be conducted in a rural county and the new qualified
employment position must be located in the rural county.
(b) If an activity is conducted both from a rural county and
outside of a rural county, the credit is available if at least ninety
percent of the qualifying activity is conducted within a rural county.
If the qualifying activity is a service taxable activity, the place
where the work is performed is the place at which the activity is
conducted.
(4)(a) The credit under this section ((shall)) equals one thousand
dollars for each new qualified employment position created after
January 1, 2004, in an eligible area. A credit is earned for the
calendar year the person is hired to fill the position. Additionally
a credit is earned for each year the position is maintained over the
subsequent consecutive years, up to four years. The county must meet
the definition of a rural county at the time the position is filled.
If the county does not have a rural county status the following year or
years, the position is still eligible for the remaining years if all
other conditions are met.
(b) Participants who claimed credit under RCW 82.04.4456 for
qualified employment positions created before December 31, 2003, are
eligible to earn credit for each year the position is maintained over
the subsequent consecutive years, for up to four years, which four
years include any years claimed under RCW 82.04.4456. Those persons
who did not receive a credit under RCW 82.04.4456 before December 31,
2003, are not eligible to earn credit for qualified employment
positions created before December 31, 2003.
(c) Credit is authorized for new employees hired for new qualified
employment positions created on or after January 1, 2004. New
qualified employment positions filled by existing employees are
eligible for the credit under this section only if the position vacated
by the existing employee is filled by a new hire. A business that is
a sole proprietorship without any employees is equivalent to one
employee position and this type of business is eligible to receive
credit for one position.
(d) If a position is filled before July 1st, the position is
eligible for the full yearly credit for that calendar year. If it is
filled after June 30th, the position is eligible for half of the credit
for that calendar year.
(5) No application is necessary for the tax credit. The person
must keep records necessary for the department to verify eligibility
under this section. This information includes information relating to
description of qualifying activity conducted in the rural county and
outside the rural county by the person as well as detailed records on
positions and employees.
(6) If at any time the department finds that a person is not
eligible for tax credit under this section, the amount of taxes for
which a credit has been claimed is immediately due. The department
must assess interest, but not penalties, on the taxes for which the
person is not eligible. The interest must be assessed at the rate
provided for delinquent excise taxes under chapter 82.32 RCW, applies
retroactively to the date the tax credit was taken, and accrues until
the taxes for which a credit has been used are repaid.
(7) The credit under this section may be used against any tax due
under this chapter, but in no case may a credit earned during one
calendar year be carried over to be credited against taxes incurred in
a subsequent calendar year. A person is not eligible to receive a
credit under this section if the person is receiving credit for the
same position under chapter 82.62 RCW or RCW 82.04.44525 or is taking
a credit under this chapter for information technology help desk
services conducted from a rural county. No refunds may be granted for
credits under this section.
(8) Transfer of ownership does not affect credit eligibility.
However, the successive credits are available to the successor for
remaining periods in the five years only if the eligibility conditions
of this section are met.
(9) A person claiming a tax credit under this section must file a
complete annual ((survey)) report with the department under ((RCW
82.32.585)) section 201 of this act.
(10) As used in this section:
(a) "Computer software" has the meaning as defined in RCW 82.04.215
after June 30, 2004, and includes "software" as defined in RCW
82.04.215 before July 1, 2004.
(b) "Manufacturing" means the same as "to manufacture" under RCW
82.04.120. Manufacturing includes the activities of both manufacturers
and processors for hire.
(c) "Programming" means the activities that involve the creation or
modification of computer software, as that term is defined in this
chapter, and that are taxable as a service under RCW 82.04.290(2) or as
a retail sale under RCW 82.04.050.
(d) "Qualifying activity" means manufacturing of computer software
or programming.
(e) "Qualified employment position" means a permanent full-time
position doing programming of computer software or manufacturing of
computer software. This excludes administrative, professional,
service, executive, and other similar positions. If an employee is
either voluntarily or involuntarily separated from employment, the
employment position is considered filled on a full-time basis if the
employer is either training or actively recruiting a replacement
employee. Full-time means a position for at least thirty-five hours a
week.
(f) "Rural county" means the same as in RCW 82.14.370.
(11) No credit may be taken or accrued under this section on or
after January 1, 2011.
Sec. 230 RCW 82.04.449 and 2012 c 46 s 3 are each amended to read
as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed for participants in the Washington customized employment
training program created in RCW 28B.67.020. The credit allowed under
this section is equal to fifty percent of the value of a participant's
payments to the employment training finance account created in RCW
28B.67.030. If a participant in the program does not meet the
requirements of RCW 28B.67.020(2)(b)(ii), the participant must remit to
the department the value of any credits taken plus interest. The
credit earned by a participant in one calendar year may be carried over
to be credited against taxes incurred in a subsequent calendar year.
No credit may be allowed for repayment of training allowances received
from the Washington customized employment training program on or after
July 1, 2021.
(2) A person claiming the credit provided in this section must file
a complete annual ((survey)) report with the department under ((RCW
82.32.585)) section 201 of this act.
Sec. 231 RCW 82.08.805 and 2011 c 174 s 303 are each amended to
read as follows:
(1) A person who has paid tax under RCW 82.08.020 for personal
property used at an aluminum smelter, tangible personal property that
will be incorporated as an ingredient or component of buildings or
other structures at an aluminum smelter, or for labor and services
rendered with respect to such buildings, structures, or personal
property, is eligible for an exemption from the state share of the tax
in the form of a credit, as provided in this section. A person
claiming an exemption must pay the tax and may then take a credit equal
to the state share of retail sales tax paid under RCW 82.08.020. The
person must submit information, in a form and manner prescribed by the
department, specifying the amount of qualifying purchases or
acquisitions for which the exemption is claimed and the amount of
exempted tax.
(2) For the purposes of this section, "aluminum smelter" has the
same meaning as provided in RCW 82.04.217.
(3) A person claiming the tax preference provided in this section
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(4) Credits may not be claimed under this section for taxable
events occurring on or after January 1, 2017.
Sec. 232 RCW 82.08.965 and 2010 c 114 s 123 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to charges made
for labor and services rendered in respect to the constructing of new
buildings used for the manufacturing of semiconductor materials, to
sales of tangible personal property that will be incorporated as an
ingredient or component of such buildings during the course of the
constructing, or to labor and services rendered in respect to
installing, during the course of constructing, building fixtures not
otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The
exemption is available only when the buyer provides the seller with an
exemption certificate in a form and manner prescribed by the
department. The seller must retain a copy of the certificate for the
seller's files.
(2) To be eligible under this section the manufacturer or processor
for hire must meet the following requirements for an eight-year period,
such period beginning the day the new building commences commercial
production, or a portion of tax otherwise due will be immediately due
and payable pursuant to subsection (3) of this section:
(a) The manufacturer or processor for hire must maintain at least
seventy-five percent of full employment at the new building for which
the exemption under this section is claimed.
(b) Before commencing commercial production at a new facility the
manufacturer or processor for hire must meet with the department to
review projected employment levels in the new buildings. The
department, using information provided by the taxpayer, must make a
determination of the number of positions that would be filled at full
employment. This number must be used throughout the eight-year period
to determine whether any tax is to be repaid. This information is not
subject to the confidentiality provisions of RCW 82.32.330 and may be
disclosed to the public upon request.
(c) In those situations where a production building in existence on
the effective date of this section will be phased out of operation
during which time employment at the new building at the same site is
increased, the manufacturer or processor for hire must maintain
seventy-five percent of full employment at the manufacturing site
overall.
(d) No application is necessary for the tax exemption. The person
is subject to all the requirements of chapter 82.32 RCW. A person
claiming the exemption under this section must file a complete annual
report with the department under ((RCW 82.32.534)) section 201 of this
act.
(3) If the employment requirement is not met for any one calendar
year, one-eighth of the exempt sales and use taxes will be due and
payable by April 1st of the following year. The department must assess
interest to the date the tax was imposed, but not penalties, on the
taxes for which the person is not eligible.
(4) The exemption applies to new buildings, or parts of buildings,
that are used exclusively in the manufacturing of semiconductor
materials, including the storage of raw materials and finished product.
(5) For the purposes of this section:
(a) "Commencement of commercial production" is deemed to have
occurred when the equipment and process qualifications in the new
building are completed and production for sale has begun; and
(b) "Full employment" is the number of positions required for full
capacity production at the new building, for positions such as line
workers, engineers, and technicians.
(c) "Semiconductor materials" has the same meaning as provided in
RCW 82.04.240(2).
(6) No exemption may be taken after twelve years after the
effective date of this act, however all of the eligibility criteria and
limitations are applicable to any exemptions claimed before that date.
(7) This section expires twelve years after the effective date of
this act.
Sec. 233 RCW 82.08.9651 and 2010 c 114 s 124 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to sales of
gases and chemicals used by a manufacturer or processor for hire in the
production of semiconductor materials. This exemption is limited to
gases and chemicals used in the production process to grow the product,
deposit or grow permanent or sacrificial layers on the product, to etch
or remove material from the product, to anneal the product, to immerse
the product, to clean the product, and other such uses whereby the
gases and chemicals come into direct contact with the product during
the production process, or uses of gases and chemicals to clean the
chambers and other like equipment in which such processing takes place.
For the purposes of this section, "semiconductor materials" has the
meaning provided in RCW 82.04.2404 and 82.04.294(3).
(2) A person claiming the exemption under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act. No application is necessary for the tax
exemption. The person is subject to all of the requirements of chapter
82.32 RCW.
(3) This section expires December 1, 2018.
Sec. 234 RCW 82.08.970 and 2010 c 114 s 125 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to sales of
gases and chemicals used by a manufacturer or processor for hire in the
manufacturing of semiconductor materials. This exemption is limited to
gases and chemicals used in the manufacturing process to grow the
product, deposit or grow permanent or sacrificial layers on the
product, to etch or remove material from the product, to anneal the
product, to immerse the product, to clean the product, and other such
uses whereby the gases and chemicals come into direct contact with the
product during the manufacturing process, or uses of gases and
chemicals to clean the chambers and other like equipment in which such
processing takes place. For the purposes of this section,
"semiconductor materials" has the same meaning as provided in RCW
82.04.240(2).
(2) A person claiming the exemption under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act. No application is necessary for the tax
exemption. The person is subject to all of the requirements of chapter
82.32 RCW.
(3) This section expires twelve years after the effective date of
this act.
Sec. 235 RCW 82.08.980 and 2010 c 114 s 126 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to charges made
for labor and services rendered in respect to the constructing of new
buildings by a manufacturer engaged in the manufacturing of
superefficient airplanes or by a port district, to be leased to a
manufacturer engaged in the manufacturing of superefficient airplanes,
to sales of tangible personal property that will be incorporated as an
ingredient or component of such buildings during the course of the
constructing, or to labor and services rendered in respect to
installing, during the course of constructing, building fixtures not
otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The
exemption is available only when the buyer provides the seller with an
exemption certificate in a form and manner prescribed by the
department. The seller must retain a copy of the certificate for the
seller's files.
(2) No application is necessary for the tax exemption in this
section, however in order to qualify under this section before starting
construction the port district must have entered into an agreement with
the manufacturer to build such a facility. A person claiming the
exemption under this section is subject to all the requirements of
chapter 82.32 RCW. In addition, the person must file a complete annual
report with the department under ((RCW 82.32.534)) section 201 of this
act.
(3) The exemption in this section applies to buildings, or parts of
buildings, that are used exclusively in the manufacturing of
superefficient airplanes, including buildings used for the storage of
raw materials and finished product.
(4) For the purposes of this section, "superefficient airplane" has
the meaning given in RCW 82.32.550.
(5) This section expires July 1, 2024.
Sec. 236 RCW 82.08.980 and 2013 3rd sp.s. c 2 s 3 are each
amended to read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to:
(a) Charges, for labor and services rendered in respect to the
constructing of new buildings, made to (i) a manufacturer engaged in
the manufacturing of commercial airplanes or the fuselages or wings of
commercial airplanes or (ii) a port district, political subdivision, or
municipal corporation, to be leased to a manufacturer engaged in the
manufacturing of commercial airplanes or the fuselages or wings of
commercial airplanes;
(b) Sales of tangible personal property that will be incorporated
as an ingredient or component of such buildings during the course of
the constructing; or
(c) Charges made for labor and services rendered in respect to
installing, during the course of constructing such buildings, building
fixtures not otherwise eligible for the exemption under RCW
82.08.02565(2)(b).
(2) The exemption is available only when the buyer provides the
seller with an exemption certificate in a form and manner prescribed by
the department. The seller must retain a copy of the certificate for
the seller's files.
(3) No application is necessary for the tax exemption in this
section. However, in order to qualify under this section before
starting construction, the port district, political subdivision, or
municipal corporation must have entered into an agreement with the
manufacturer to build such a facility. A person claiming the exemption
under this section is subject to all the requirements of chapter 82.32
RCW. In addition, the person must file a complete annual report with
the department under ((RCW 82.32.534)) section 201 of this act.
(4) The exemption in this section applies to buildings or parts of
buildings, including buildings or parts of buildings used for the
storage of raw materials or finished product, that are used primarily
in the manufacturing of any one or more of the following products:
(a) Commercial airplanes;
(b) Fuselages of commercial airplanes; or
(c) Wings of commercial airplanes.
(5) For the purposes of this section, "commercial airplane" has the
meaning given in RCW 82.32.550.
(6) This section expires July 1, 2040.
Sec. 237 RCW 82.08.986 and 2012 2nd sp.s. c 6 s 302 are each
amended to read as follows:
(1) An exemption from the tax imposed by RCW 82.08.020 is provided
for sales to qualifying businesses and to qualifying tenants of
eligible server equipment to be installed, without intervening use, in
an eligible computer data center, and to charges made for labor and
services rendered in respect to installing eligible server equipment.
The exemption also applies to sales to qualifying businesses and to
qualifying tenants of eligible power infrastructure, including labor
and services rendered in respect to constructing, installing,
repairing, altering, or improving eligible power infrastructure.
(2)(a) In order to claim the exemption under this section, a
qualifying business or a qualifying tenant must submit an application
to the department for an exemption certificate. The application must
include the information necessary, as required by the department, to
determine that a business or tenant qualifies for the exemption under
this section. The department must issue exemption certificates to
qualifying businesses and qualifying tenants. The department may
assign a unique identification number to each exemption certificate
issued under this section.
(b) A qualifying business or a qualifying tenant claiming the
exemption under this section must present the seller with an exemption
certificate in a form and manner prescribed by the department. The
seller must retain a copy of the certificate for the seller's files.
(3)(a) Within six years of the date that the department issued an
exemption certificate under this section to a qualifying business or a
qualifying tenant with respect to an eligible computer data center, the
qualifying business or qualifying tenant must establish that net
employment at the eligible computer data center has increased by a
minimum of:
(i) Thirty-five family wage employment positions; or
(ii) Three family wage employment positions for each twenty
thousand square feet of space or less that is newly dedicated to
housing working servers at the eligible computer data center. For
qualifying tenants, the number of family wage employment positions that
must be increased under this subsection (3)(a)(ii) is based only on the
space occupied by the qualifying tenant in the eligible computer data
center.
(b) In calculating the net increase in family wage employment
positions:
(i) The owner of an eligible computer data center, in addition to
its own net increase in family wage employment positions, may include:
(A) The net increase in family wage employment positions employed
by qualifying tenants; and
(B) The net increase in family wage employment positions described
in (c)(ii)(B) of this subsection (3).
(ii)(A) Qualifying tenants, in addition to their own net increase
in family wage employment positions, may include:
(I) A portion of the net increase in family wage employment
positions employed by the owner; and
(II) A portion of the net increase in family wage employment
positions described in (c)(ii)(B) of this subsection (3).
(B) The portion of the net increase in family wage employment
positions to be counted under this subsection (3)(b)(ii) by each
qualifying tenant must be in proportion to the amount of space in the
eligible computer data center occupied by the qualifying tenant
compared to the total amount of space in the eligible computer data
center occupied by all qualifying tenants.
(c)(i) For purposes of this subsection, family wage employment
positions are new permanent employment positions requiring forty hours
of weekly work, or their equivalent, on a full-time basis at the
eligible computer data center and receiving a wage equivalent to or
greater than one hundred fifty percent of the per capita personal
income of the county in which the qualified project is located. An
employment position may not be counted as a family wage employment
position unless the employment position is entitled to health insurance
coverage provided by the employer of the employment position. For
purposes of this subsection (3)(c), "new permanent employment position"
means an employment position that did not exist or that had not
previously been filled as of the date that the department issued an
exemption certificate to the owner or qualifying tenant of an eligible
computer data center, as the case may be.
(ii)(A) Family wage employment positions include positions filled
by employees of the owner of the eligible computer data center and by
employees of qualifying tenants.
(B) Family wage employment positions also include individuals
performing work at an eligible computer data center as an independent
contractor hired by the owner of the eligible computer data center or
as an employee of an independent contractor hired by the owner of the
eligible computer data center, if the work is necessary for the
operation of the computer data center, such as security and building
maintenance, and provided that all of the requirements in (c)(i) of
this subsection (3) are met.
(d) All previously exempted sales and use taxes are immediately due
and payable for a qualifying business or qualifying tenant that does
not meet the requirements of this subsection.
(4) A qualifying business or a qualifying tenant claiming an
exemption under this section or RCW 82.12.986 must complete an annual
report with the department as required under ((RCW 82.32.534)) section
201 of this act.
(5)(a) The exemption provided in this section does not apply to:
(i) Any person who has received the benefit of the deferral program
under chapter 82.60 RCW on: (A) The construction, renovation, or
expansion of a structure or structures used as a computer data center;
or (B) machinery or equipment used in a computer data center; and
(ii) Any person affiliated with a person within the scope of (a)(i)
of this subsection (5).
(b) If a person claims an exemption under this section and
subsequently receives the benefit of the deferral program under chapter
82.60 RCW on either the construction, renovation, or expansion of a
structure or structures used as a computer data center or machinery or
equipment used in a computer data center, the person must repay the
amount of taxes exempted under this section. Interest as provided in
chapter 82.32 RCW applies to amounts due under this section until paid
in full.
(6) For purposes of this section the following definitions apply
unless the context clearly requires otherwise:
(a) "Affiliated" means that one person has a direct or indirect
ownership interest of at least twenty percent in another person.
(b)(i) "Computer data center" means a facility comprised of one or
more buildings, which may be comprised of multiple businesses,
constructed or refurbished specifically, and used primarily, to house
working servers, where the facility has the following characteristics:
(A) Uninterruptible power supplies, generator backup power, or both;
(B) sophisticated fire suppression and prevention systems; and (C)
enhanced physical security, such as: Restricted access to the facility
to selected personnel; permanent security guards; video camera
surveillance; an electronic system requiring passcodes, keycards, or
biometric scans, such as hand scans and retinal or fingerprint
recognition; or similar security features.
(ii) For a computer data center comprised of multiple buildings,
each separate building constructed or refurbished specifically, and
used primarily, to house working servers is considered a computer data
center if it has all of the characteristics listed in (b)(i)(A) through
(C) of this subsection (6).
(iii) A facility comprised of one building or more than one
building must have a combined square footage of at least one hundred
thousand square feet.
(c) "Electronic data storage and data management services" include,
but are not limited to: Providing data storage and backup services,
providing computer processing power, hosting enterprise software
applications, and hosting web sites. The term also includes providing
services such as e-mail, web browsing and searching, media
applications, and other online services, regardless of whether a charge
is made for such services.
(d)(i) "Eligible computer data center" means a computer data
center:
(A) Located in a rural county as defined in RCW 82.14.370;
(B) Having at least twenty thousand square feet dedicated to
housing working servers, where the server space has not previously been
dedicated to housing working servers; and
(C) For which the commencement of construction occurs:
(I) After March 31, 2010, and before July 1, 2011; or
(II) After March 31, 2012, and before July 1, 2015.
(ii) For purposes of this section, "commencement of construction"
means the date that a building permit is issued under the building code
adopted under RCW 19.27.031 for construction of the computer data
center. The construction of a computer data center includes the
expansion, renovation, or other improvements made to existing
facilities, including leased or rented space. "Commencement of
construction" does not include soil testing, site clearing and grading,
site preparation, or any other related activities that are initiated
before the issuance of a building permit for the construction of the
foundation of a computer data center.
(iii) With respect to facilities in existence on April 1, 2010,
that are expanded, renovated, or otherwise improved after March 31,
2010, or facilities in existence on April 1, 2012, that are expanded,
renovated, or otherwise improved after March 31, 2012, an eligible
computer data center includes only the portion of the computer data
center meeting the requirements in (d)(i)(B) of this subsection (6).
(e) "Eligible power infrastructure" means all fixtures and
equipment owned by a qualifying business or qualifying tenant and
necessary for the transformation, distribution, or management of
electricity that is required to operate eligible server equipment
within an eligible computer data center. The term includes generators;
wiring; cogeneration equipment; and associated fixtures and equipment,
such as electrical switches, batteries, and distribution, testing, and
monitoring equipment.
(f) "Eligible server equipment" means:
(i) For a qualifying business whose computer data center qualifies
as an eligible computer data center under (d)(i)(C)(I) of this
subsection (6), the original server equipment installed in an eligible
computer data center on or after April 1, 2010, and replacement server
equipment. For purposes of this subsection (6)(f)(i), "replacement
server equipment" means server equipment that:
(A) Replaces existing server equipment, if the sale or use of the
server equipment to be replaced qualified for an exemption under this
section or RCW 82.12.986; and
(B) Is installed and put into regular use before April 1, 2018.
(ii) For a qualifying business whose computer data center qualifies
as an eligible computer data center under (d)(i)(C)(II) of this
subsection (6), "eligible server equipment" means the original server
equipment installed in an eligible computer data center on or after
April 1, 2012, and replacement server equipment. For purposes of this
subsection (6)(f)(ii), "replacement server equipment" means server
equipment that:
(A) Replaces existing server equipment, if the sale or use of the
server equipment to be replaced qualified for an exemption under this
section or RCW 82.12.986; and
(B) Is installed and put into regular use before April 1, 2020.
(iii) For a qualifying tenant who leases space within an eligible
computer data center, "eligible server equipment" means the original
server equipment installed within the space it leases from an eligible
computer data center on or after April 1, 2010, and replacement server
equipment. For purposes of this subsection (6)(f)(iii), "replacement
server equipment" means server equipment that:
(A) Replaces existing server equipment, if the sale or use of the
server equipment to be replaced qualified for an exemption under this
section or RCW 82.12.986; and
(B) Is installed and put into regular use before April 1, 2020.
(g) "Qualifying business" means a business entity that exists for
the primary purpose of engaging in commercial activity for profit and
that is the owner of an eligible computer data center. The term does
not include the state or federal government or any of their
departments, agencies, and institutions; tribal governments; political
subdivisions of this state; or any municipal, quasi-municipal, public,
or other corporation created by the state or federal government, tribal
government, municipality, or political subdivision of the state.
(h) "Qualifying tenant" means a business entity that exists for the
primary purpose of engaging in commercial activity for profit and that
leases space from a qualifying business within an eligible computer
data center. The term does not include the state or federal government
or any of their departments, agencies, and institutions; tribal
governments; political subdivisions of this state; or any municipal,
quasi-municipal, public, or other corporation created by the state or
federal government, tribal government, municipality, or political
subdivision of the state. The term also does not include a lessee of
space in an eligible computer data center under (d)(i)(C)(I) of this
subsection (6), if the lessee and lessor are affiliated and:
(i) That space will be used by the lessee to house server equipment
that replaces server equipment previously installed and operated in
that eligible computer data center by the lessor or another person
affiliated with the lessee; or
(ii) Prior to May 2, 2012, the primary use of the server equipment
installed in that eligible computer data center was to provide
electronic data storage and data management services for the business
purposes of either the lessor, persons affiliated with the lessor, or
both.
(i) "Server equipment" means the computer hardware located in an
eligible computer data center and used exclusively to provide
electronic data storage and data management services for internal use
by the owner or lessee of the computer data center, for clients of the
owner or lessee of the computer data center, or both. "Server
equipment" also includes computer software necessary to operate the
computer hardware. "Server equipment" does not include personal
computers, the racks upon which the server equipment is installed, and
computer peripherals such as keyboards, monitors, printers, and mice.
(7) This section expires April 1, 2020.
Sec. 238 RCW 82.12.022 and 2011 c 174 s 304 are each amended to
read as follows:
(1) A use tax is levied on every person in this state for the
privilege of using natural gas or manufactured gas within this state as
a consumer.
(2) The tax must be levied and collected in an amount equal to the
value of the article used by the taxpayer multiplied by the rate in
effect for the public utility tax on gas distribution businesses under
RCW 82.16.020. The "value of the article used" does not include any
amounts that are paid for the hire or use of a gas distribution
business as defined in RCW 82.16.010(2) in transporting the gas subject
to tax under this subsection if those amounts are subject to tax under
that chapter.
(3) The tax levied in this section does not apply to the use of
natural or manufactured gas delivered to the consumer by other means
than through a pipeline.
(4) The tax levied in this section does not apply to the use of
natural or manufactured gas if the person who sold the gas to the
consumer has paid a tax under RCW 82.16.020 with respect to the gas for
which exemption is sought under this subsection.
(5)(a) The tax levied in this section does not apply to the use of
natural or manufactured gas by an aluminum smelter as that term is
defined in RCW 82.04.217 before January 1, 2017.
(b) A person claiming the exemption provided in this subsection (5)
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(6) There is a credit against the tax levied under this section in
an amount equal to any tax paid by:
(a) The person who sold the gas to the consumer when that tax is a
gross receipts tax similar to that imposed pursuant to RCW 82.16.020 by
another state with respect to the gas for which a credit is sought
under this subsection; or
(b) The person consuming the gas upon which a use tax similar to
the tax imposed by this section was paid to another state with respect
to the gas for which a credit is sought under this subsection.
(7) The use tax imposed in this section must be paid by the
consumer to the department.
(8) There is imposed a reporting requirement on the person who
delivered the gas to the consumer to make a quarterly report to the
department. Such report must contain the volume of gas delivered, name
of the consumer to whom delivered, and such other information as the
department may require by rule.
(9) The department may adopt rules under chapter 34.05 RCW for the
administration and enforcement of sections 1 through 6, chapter 384,
Laws of 1989.
Sec. 239 RCW 82.12.025651 and 2011 c 23 s 5 are each amended to
read as follows:
(1) The provisions of this chapter do not apply in respect to the
use by a public research institution of machinery and equipment used
primarily in a research and development operation, or to the use of
labor and services rendered in respect to installing, repairing,
cleaning, altering, or improving the machinery and equipment.
(2) The definitions in RCW 82.08.025651 apply to this section.
(3) A public research institution receiving the benefit of the
exemption provided in this section must file a complete annual
((survey)) report with the department under ((RCW 82.32.585)) section
201 of this act.
Sec. 240 RCW 82.12.805 and 2011 c 174 s 305 are each amended to
read as follows:
(1) A person who is subject to tax under RCW 82.12.020 for personal
property used at an aluminum smelter, or for tangible personal property
that will be incorporated as an ingredient or component of buildings or
other structures at an aluminum smelter, or for labor and services
rendered with respect to such buildings, structures, or personal
property, is eligible for an exemption from the state share of the tax
in the form of a credit, as provided in this section. The amount of
the credit equals the state share of use tax computed to be due under
RCW 82.12.020. The person must submit information, in a form and
manner prescribed by the department, specifying the amount of
qualifying purchases or acquisitions for which the exemption is claimed
and the amount of exempted tax.
(2) For the purposes of this section, "aluminum smelter" has the
same meaning as provided in RCW 82.04.217.
(3) A person reporting under the tax rate provided in this section
must file a complete annual report with the department under ((RCW
82.32.534)) section 201 of this act.
(4) Credits may not be claimed under this section for taxable
events occurring on or after January 1, 2017.
Sec. 241 RCW 82.12.965 and 2010 c 114 s 129 are each amended to
read as follows:
(1) The provisions of this chapter do not apply with respect to the
use of tangible personal property that will be incorporated as an
ingredient or component of new buildings used for the manufacturing of
semiconductor materials during the course of constructing such
buildings or to labor and services rendered in respect to installing,
during the course of constructing, building fixtures not otherwise
eligible for the exemption under RCW 82.08.02565(2)(b).
(2) The eligibility requirements, conditions, and definitions in
RCW 82.08.965 apply to this section, including the filing of a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) No exemption may be taken twelve years after the effective date
of this act, however all of the eligibility criteria and limitations
are applicable to any exemptions claimed before that date.
(4) This section expires twelve years after the effective date of
this act.
Sec. 242 RCW 82.12.9651 and 2010 c 114 s 130 are each amended to
read as follows:
(1) The provisions of this chapter do not apply with respect to the
use of gases and chemicals used by a manufacturer or processor for hire
in the production of semiconductor materials. This exemption is
limited to gases and chemicals used in the production process to grow
the product, deposit or grow permanent or sacrificial layers on the
product, to etch or remove material from the product, to anneal the
product, to immerse the product, to clean the product, and other such
uses whereby the gases and chemicals come into direct contact with the
product during the production process, or uses of gases and chemicals
to clean the chambers and other like equipment in which such processing
takes place. For purposes of this section, "semiconductor materials"
has the meaning provided in RCW 82.04.2404 and 82.04.294(3).
(2) A person claiming the exemption under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act. No application is necessary for the tax
exemption. The person is subject to all of the requirements of chapter
82.32 RCW.
(3) This section expires December 1, 2018.
Sec. 243 RCW 82.12.970 and 2010 c 114 s 131 are each amended to
read as follows:
(1) The provisions of this chapter do not apply with respect to the
use of gases and chemicals used by a manufacturer or processor for hire
in the manufacturing of semiconductor materials. This exemption is
limited to gases and chemicals used in the manufacturing process to
grow the product, deposit or grow permanent or sacrificial layers on
the product, to etch or remove material from the product, to anneal the
product, to immerse the product, to clean the product, and other such
uses whereby the gases and chemicals come into direct contact with the
product during the manufacturing process, or uses of gases and
chemicals to clean the chambers and other like equipment in which such
processing takes place. For purposes of this section, "semiconductor
materials" has the same meaning as provided in RCW 82.04.240(2).
(2) A person claiming the exemption under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act. No application is necessary for the tax
exemption. The person is subject to all of the requirements of chapter
82.32 RCW.
(3) This section expires twelve years after the effective date of
this act.
Sec. 244 RCW 82.12.980 and 2010 c 114 s 132 are each amended to
read as follows:
(1) The provisions of this chapter do not apply with respect to the
use of tangible personal property that will be incorporated as an
ingredient or component of new buildings by a manufacturer engaged in
the manufacturing of superefficient airplanes or owned by a port
district and to be leased to a manufacturer engaged in the
manufacturing of superefficient airplanes, during the course of
constructing such buildings, or to labor and services rendered in
respect to installing, during the course of constructing, building
fixtures not otherwise eligible for the exemption under RCW
82.08.02565(2)(b).
(2) The eligibility requirements, conditions, and definitions in
RCW 82.08.980 apply to this section, including the filing of a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) This section expires July 1, 2024.
Sec. 245 RCW 82.12.980 and 2013 3rd sp.s. c 2 s 4 are each
amended to read as follows:
(1) The provisions of this chapter do not apply with respect to the
use of:
(a) Tangible personal property that will be incorporated as an
ingredient or component in constructing new buildings for (i) a
manufacturer engaged in the manufacturing of commercial airplanes or
the fuselages or wings of commercial airplanes or (ii) a port district,
political subdivision, or municipal corporation, to be leased to a
manufacturer engaged in the manufacturing of commercial airplanes or
the fuselages or wings of commercial airplanes; or
(b) Labor and services rendered in respect to installing, during
the course of constructing such buildings, building fixtures not
otherwise eligible for the exemption under RCW 82.08.02565(2)(b).
(2) The eligibility requirements, conditions, and definitions in
RCW 82.08.980 apply to this section, including the filing of a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) This section expires July 1, 2040.
Sec. 246 RCW 82.16.0421 and 2010 c 114 s 133 are each amended to
read as follows:
(1) For the purposes of this section:
(a) "Chlor-alkali electrolytic processing business" means a person
who is engaged in a business that uses more than ten average megawatts
of electricity per month in a chlor-alkali electrolytic process to
split the electrochemical bonds of sodium chloride and water to make
chlorine and sodium hydroxide. A "chlor-alkali electrolytic processing
business" does not include direct service industrial customers or their
subsidiaries that contract for the purchase of power from the
Bonneville power administration as of June 10, 2004.
(b) "Sodium chlorate electrolytic processing business" means a
person who is engaged in a business that uses more than ten average
megawatts of electricity per month in a sodium chlorate electrolytic
process to split the electrochemical bonds of sodium chloride and water
to make sodium chlorate and hydrogen. A "sodium chlorate electrolytic
processing business" does not include direct service industrial
customers or their subsidiaries that contract for the purchase of power
from the Bonneville power administration as of June 10, 2004.
(2) Effective July 1, 2004, the tax levied under this chapter does
not apply to sales of electricity made by a light and power business to
a chlor-alkali electrolytic processing business or a sodium chlorate
electrolytic processing business for the electrolytic process if the
contract for sale of electricity to the business contains the following
terms:
(a) The electricity to be used in the electrolytic process is
separately metered from the electricity used for general operations of
the business;
(b) The price charged for the electricity used in the electrolytic
process will be reduced by an amount equal to the tax exemption
available to the light and power business under this section; and
(c) Disallowance of all or part of the exemption under this section
is a breach of contract and the damages to be paid by the chlor-alkali
electrolytic processing business or the sodium chlorate electrolytic
processing business are the amount of the tax exemption disallowed.
(3) The exemption provided for in this section does not apply to
amounts received from the remarketing or resale of electricity
originally obtained by contract for the electrolytic process.
(4) In order to claim an exemption under this section, the chlor-alkali electrolytic processing business or the sodium chlorate
electrolytic processing business must provide the light and power
business with an exemption certificate in a form and manner prescribed
by the department.
(5) A person receiving the benefit of the exemption provided in
this section must file a complete annual report with the department
under ((RCW 82.32.534)) section 201 of this act.
(6)(a) This section does not apply to sales of electricity made
after December 31, 2018.
(b) This section expires June 30, 2019.
Sec. 247 RCW 82.29A.137 and 2010 c 114 s 134 are each amended to
read as follows:
(1) All leasehold interests in port district facilities exempt from
tax under RCW 82.08.980 or 82.12.980 and used by a manufacturer engaged
in the manufacturing of superefficient airplanes, as defined in RCW
82.32.550, are exempt from tax under this chapter. A person claiming
the credit under RCW 82.04.4463 is not eligible for the exemption under
this section.
(2) In addition to all other requirements under this title, a
person claiming the exemption under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) This section expires July 1, 2024.
Sec. 248 RCW 82.29A.137 and 2013 3rd sp.s. c 2 s 13 are each
amended to read as follows:
(1) All leasehold interests in port district facilities exempt from
tax under RCW 82.08.980 or 82.12.980 and used by a manufacturer engaged
in the manufacturing of superefficient airplanes, as defined in RCW
82.32.550, are exempt from tax under this chapter. A person claiming
the credit under RCW 82.04.4463 is not eligible for the exemption under
this section.
(2) In addition to all other requirements under this title, a
person claiming the exemption under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) This section expires July 1, 2040.
Sec. 249 RCW 82.60.070 and 2010 1st sp.s. c 16 s 9 are each
amended to read as follows:
(1)(a) Each recipient of a deferral of taxes granted under this
chapter must file a complete annual ((survey)) report with the
department under ((RCW 82.32.585)) section 201 of this act. If the
economic benefits of the deferral are passed to a lessee as provided in
RCW 82.60.025, the lessee must file a complete annual ((survey))
report, and the applicant is not required to file a complete annual
((survey)) report.
(b) The department must use the information reported on the annual
((survey)) report required by this section to study the tax deferral
program authorized under this chapter. The department must report to
the legislature by December 1, ((2019)) 2018. The report must measure
the effect of the program on job creation, the number of jobs created
for residents of eligible areas, company growth, ((the introduction of
new products, the diversification of the state's economy, growth in
research and development investment, the movement of firms or the
consolidation of firms' operations into the state,)) and such other
factors as the department selects.
(2) Except as provided in RCW 82.60.063, if, on the basis of a
((survey under RCW 82.32.585)) report under section 201 of this act or
other information, the department finds that an investment project is
not eligible for tax deferral under this chapter, the amount of
deferred taxes outstanding for the project, according to the repayment
schedule in RCW 82.60.060, is immediately due. For purposes of this
subsection (2), the repayment schedule in RCW 82.60.060 is tolled
during the period of time that a taxpayer is receiving relief from
repayment of deferred taxes under RCW 82.60.063.
(3) A recipient who must repay deferred taxes under subsection (2)
of this section because the department has found that an investment
project is not eligible for tax deferral under this chapter is no
longer required to file annual ((surveys under RCW 82.32.585)) reports
under section 201 of this act beginning on the date an investment
project is used for nonqualifying purposes.
(4) Notwithstanding any other provision of this section or ((RCW
82.32.585)) under section 201 of this act, deferred taxes on the
following need not be repaid:
(a) Machinery and equipment, and sales of or charges made for labor
and services, which at the time of purchase would have qualified for
exemption under RCW 82.08.02565; and
(b) Machinery and equipment which at the time of first use would
have qualified for exemption under RCW 82.12.02565.
Sec. 250 RCW 82.63.020 and 2010 c 114 s 140 are each amended to
read as follows:
(1) Application for deferral of taxes under this chapter must be
made before initiation of construction of, or acquisition of equipment
or machinery for the investment project. In the case of an investment
project involving multiple qualified buildings, applications must be
made for, and before the initiation of construction of, each qualified
building. The application must be made to the department in a form and
manner prescribed by the department. The application must contain
information regarding the location of the investment project, the
applicant's average employment in the state for the prior year,
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 must rule on
the application within sixty days.
(2) Each recipient of a deferral of taxes under this chapter must
file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act. If the economic benefits of
the deferral are passed to a lessee as provided in RCW 82.63.010(7),
the lessee must file a complete annual ((survey)) report, and the
applicant is not required to file the annual ((survey)) report.
(3) ((The department must use the information reported on the
annual survey required by this section to study the tax deferral
program authorized under this chapter. The department must report to
the legislature by December 1, 2009, and December 1, 2013. The reports
must measure the effect of the program on job creation, the number of
jobs created for Washington residents, company growth, the introduction
of new products, the diversification of the state's economy, growth in
research and development investment, the movement of firms or the
consolidation of firms' operations into the state, and such other
factors as the department selects.)) A recipient who must repay deferred taxes under RCW 82.63.045
because the department has found that an investment project is used for
purposes other than research and development performed within this
state in the fields of advanced computing, advanced materials,
biotechnology, electronic device technology, and environmental
technology is no longer required to file annual ((
(4)surveys under RCW
82.32.585)) reports under section 201 of this act beginning on the date
an investment project is used for nonqualifying purposes.
Sec. 251 RCW 82.63.045 and 2010 c 114 s 141 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section and ((RCW
82.32.585)) section 201 of this act, taxes deferred under this chapter
need not be repaid.
(2)(a) If, on the basis of the ((survey under RCW 82.32.585))
report under section 201 of this act or other information, the
department finds that an investment project is used for purposes other
than qualified research and development or pilot scale manufacturing at
any time during the calendar year in which the investment project is
certified by the department as having been operationally completed, or
at any time during any of the seven succeeding calendar years, a
portion of deferred taxes is immediately due according to the following
schedule:
Year in which use occurs | % of deferred taxes due |
1 | 100% |
2 | 87.5% |
3 | 75% |
4 | 62.5% |
5 | 50% |
6 | 37.5% |
7 | 25% |
8 | 12.5% |
Sec. 252 RCW 82.74.040 and 2010 c 114 s 142 are each amended to
read as follows:
(1) Each recipient of a deferral of taxes granted under this
chapter must file a complete annual ((survey)) report with the
department under ((RCW 82.32.585)) section 201 of this act. If the
economic benefits of the deferral are passed to a lessee as provided in
RCW 82.74.010(6), the lessee must file a complete annual ((survey))
report, and the applicant is not required to file the annual ((survey))
report.
(2) A recipient who must repay deferred taxes under RCW
82.74.050(2) because the department has found that an investment
project is used for purposes other than fresh fruit and vegetable
processing, dairy product manufacturing, seafood product manufacturing,
cold storage warehousing, or research and development is no longer
required to file annual ((surveys under RCW 82.32.585)) reports under
section 201 of this act beginning on the date an investment project is
used for nonqualifying purposes.
Sec. 253 RCW 82.74.050 and 2010 c 114 s 143 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section and ((RCW
82.32.585)) section 201 of this act, taxes deferred under this chapter
need not be repaid.
(2)(a) If, on the basis of the ((survey under RCW 82.32.585))
report under section 201 of this act or other information, the
department finds that an investment project is used for purposes other
than fresh fruit and vegetable processing, dairy product manufacturing,
seafood product manufacturing, cold storage warehousing, or research
and development at any time during the calendar year in which the
investment project is certified by the department as having been
operationally completed, or at any time during any of the seven
succeeding calendar years, a portion of deferred taxes is immediately
due according to the following schedule:
Year in which nonqualifying use occurs | % of deferred taxes due |
1 | 100% |
2 | 87.5% |
3 | 75% |
4 | 62.5% |
5 | 50% |
6 | 37.5% |
7 | 25% |
8 | 12.5% |
Sec. 254 RCW 82.75.040 and 2010 c 114 s 147 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section and ((RCW
82.32.585)) section 201 of this act, taxes deferred under this chapter
need not be repaid.
(2)(a) If, on the basis of the ((survey under RCW 82.32.585))
report under section 201 of this act or other information, the
department finds that an investment project is used for purposes other
than qualified biotechnology product manufacturing or medical device
manufacturing activities at any time during the calendar year in which
the eligible investment project is certified by the department as
having been operationally completed, or at any time during any of the
seven succeeding calendar years, a portion of deferred taxes is
immediately due and payable according to the following schedule:
Year in which use occurs | % of deferred taxes due |
1 | 100% |
2 | 87.5% |
3 | 75% |
4 | 62.5% |
5 | 50% |
6 | 37.5% |
7 | 25% |
8 | 12.5% |
Sec. 255 RCW 82.75.070 and 2010 c 114 s 144 are each amended to
read as follows:
(1) Each recipient of a deferral of taxes granted under this
chapter must file a complete annual ((survey)) report with the
department under ((RCW 82.32.585)) section 201 of this act. If the
economic benefits of the deferral are passed to a lessee as provided in
RCW 82.75.010(5), the lessee must file a complete annual ((survey))
report, and the applicant is not required to file the annual ((survey))
report.
(2) A recipient who must repay deferred taxes under RCW
82.75.040(2) because the department has found that an investment
project is used for purposes other than qualified biotechnology product
manufacturing or medical device manufacturing activities is no longer
required to file annual ((surveys under RCW 82.32.585)) reports under
section 201 of this act beginning on the date an investment project is
used for nonqualifying purposes.
Sec. 256 RCW 82.82.020 and 2010 c 114 s 148 are each amended to
read as follows:
(1) Application for deferral of taxes under this chapter can be
made at any time prior to completion of construction of a qualified
building or buildings, but tax liability incurred prior to the
department's receipt of an application may not be deferred. The
application must be made to the department in a form and manner
prescribed by the department. The application must contain information
regarding the location of the investment project, the applicant's
average employment in the state for the prior year, 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 must rule on the application within
sixty days.
(2) Applications for deferral of taxes under this section may not
be made after December 31, 2020.
(3) Each recipient of a deferral of taxes under this chapter must
file a complete annual ((survey)) report with the department under
((RCW 82.32.585)) section 201 of this act. If the economic benefits of
the deferral are passed to a lessee as provided in RCW 82.82.010(5),
the lessee must file a complete annual ((survey)) report, and the
applicant is not required to file the annual ((survey)) report.
(4) A recipient who must repay deferred taxes under RCW 82.82.040
because the department has found that an investment project is no
longer an eligible investment project is no longer required to file
annual ((surveys under RCW 82.32.585)) reports under section 201 of
this act beginning on the date an investment project is used for
nonqualifying purposes.
Sec. 257 RCW 82.82.040 and 2010 c 114 s 149 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section and ((RCW
82.32.585)) section 201 of this act, taxes deferred under this chapter
need not be repaid.
(2)(a) If, on the basis of the ((survey under RCW 82.32.585))
report under section 201 of this act or other information, the
department finds that an investment project is no longer an "eligible
investment project" under RCW 82.82.010 at any time during the calendar
year in which the investment project is certified by the department as
having been operationally completed, or at any time during any of the
seven succeeding calendar years, a portion of deferred taxes are
immediately due according to the following schedule:
Year in which use occurs | % of deferred taxes due |
1 | 100% |
2 | 87.5% |
3 | 75% |
4 | 62.5% |
5 | 50% |
6 | 37.5% |
7 | 25% |
8 | 12.5% |
Sec. 258 RCW 84.36.645 and 2010 c 114 s 150 are each amended to
read as follows:
(1) Machinery and equipment exempt under RCW 82.08.02565 or
82.12.02565 used in manufacturing semiconductor materials at a building
exempt from sales and use tax and in compliance with the employment
requirement under RCW 82.08.965 and 82.12.965 are exempt from property
taxation. "Semiconductor materials" has the same meaning as provided
in RCW 82.04.240(2).
(2) A person seeking this exemption must make application to the
county assessor, on forms prescribed by the department.
(3) A person claiming an exemption under this section must file a
complete annual report with the department under ((RCW 82.32.534))
section 201 of this act.
(4) This section is effective for taxes levied for collection one
year after the effective date of this act and thereafter.
(5) This section expires December 31st of the year occurring twelve
years after the effective date of this act, for taxes levied for
collection in the following year.
Sec. 259 RCW 84.36.655 and 2010 c 114 s 151 are each amended to
read as follows:
(1) Effective January 1, 2005, all buildings, machinery, equipment,
and other personal property of a lessee of a port district eligible
under RCW 82.08.980 and 82.12.980, used exclusively in manufacturing
superefficient airplanes, are exempt from property taxation. A person
taking the credit under RCW 82.04.4463 is not eligible for the
exemption under this section. For the purposes of this section,
"superefficient airplane" and "component" have the meanings given in
RCW 82.32.550.
(2) In addition to all other requirements under this title, a
person claiming the exemption under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) Claims for exemption authorized by this section must be filed
with the county assessor on forms prescribed by the department and
furnished by the assessor. The assessor must verify and approve claims
as the assessor determines to be justified and in accordance with this
section. No claims may be filed after December 31, 2023. The
department may adopt rules, under the provisions of chapter 34.05 RCW,
as necessary to properly administer this section.
(4) This section applies to taxes levied for collection in 2006 and
thereafter.
(5) This section expires July 1, 2024.
Sec. 260 RCW 84.36.655 and 2013 3rd sp.s. c 2 s 14 are each
amended to read as follows:
(1) Effective January 1, 2005, all buildings, machinery, equipment,
and other personal property of a lessee of a port district eligible
under RCW 82.08.980 and 82.12.980, used exclusively in manufacturing
superefficient airplanes, are exempt from property taxation. A person
taking the credit under RCW 82.04.4463 is not eligible for the
exemption under this section. For the purposes of this section,
"superefficient airplane" and "component" have the meanings given in
RCW 82.32.550.
(2) In addition to all other requirements under this title, a
person claiming the exemption under this section must file a complete
annual report with the department under ((RCW 82.32.534)) section 201
of this act.
(3) Claims for exemption authorized by this section must be filed
with the county assessor on forms prescribed by the department and
furnished by the assessor. The assessor must verify and approve claims
as the assessor determines to be justified and in accordance with this
section. No claims may be filed after December 31, 2039. The
department may adopt rules, under the provisions of chapter 34.05 RCW,
as necessary to properly administer this section.
(4) This section applies to taxes levied for collection in 2006 and
thereafter.
(5) This section expires July 1, 2040.
Sec. 301 RCW 82.32.330 and 2011 c 174 s 404 are each amended to
read as follows:
(1) For purposes of this section:
(a) "Disclose" means to make known to any person in any manner
whatever a return or tax information;
(b) "Return" means a tax or information return or claim for refund
required by, or provided for or permitted under, the laws of this state
which is filed with the department of revenue by, on behalf of, or with
respect to a person, and any amendment or supplement thereto, including
supporting schedules, attachments, or lists that are supplemental to,
or part of, the return so filed;
(c) "Tax information" means (i) a taxpayer's identity, (ii) the
nature, source, or amount of the taxpayer's income, payments, receipts,
deductions, exemptions, credits, assets, liabilities, net worth, tax
liability deficiencies, overassessments, or tax payments, whether taken
from the taxpayer's books and records or any other source, (iii)
whether the taxpayer's return was, is being, or will be examined or
subject to other investigation or processing, (iv) a part of a written
determination that is not designated as a precedent and disclosed
pursuant to RCW 82.32.410, or a background file document relating to a
written determination, and (v) other data received by, recorded by,
prepared by, furnished to, or collected by the department of revenue
with respect to the determination of the existence, or possible
existence, of liability, or the amount thereof, of a person under the
laws of this state for a tax, penalty, interest, fine, forfeiture, or
other imposition, or offense. However, data, material, or documents
that do not disclose information related to a specific or identifiable
taxpayer do not constitute tax information under this section. Except
as provided by RCW 82.32.410, nothing in this chapter requires any
person possessing data, material, or documents made confidential and
privileged by this section to delete information from such data,
material, or documents so as to permit its disclosure;
(d) "State agency" means every Washington state office, department,
division, bureau, board, commission, or other state agency;
(e) "Taxpayer identity" means the taxpayer's name, address,
telephone number, registration number, or any combination thereof, or
any other information disclosing the identity of the taxpayer; and
(f) "Department" means the department of revenue or its officer,
agent, employee, or representative.
(2) Returns and tax information are confidential and privileged,
and except as authorized by this section, neither the department of
revenue nor any other person may disclose any return or tax
information.
(3) This section does not prohibit the department of revenue from:
(a) Disclosing such return or tax information in a civil or
criminal judicial proceeding or an administrative proceeding:
(i) In respect of any tax imposed under the laws of this state if
the taxpayer or its officer or other person liable under this title or
chapter 83.100 RCW is a party in the proceeding;
(ii) In which the taxpayer about whom such return or tax
information is sought and another state agency are adverse parties in
the proceeding; or
(iii) Brought by the department under RCW 18.27.040 or 19.28.071;
(b) Disclosing, subject to such requirements and conditions as the
director prescribes by rules adopted pursuant to chapter 34.05 RCW,
such return or tax information regarding a taxpayer to such taxpayer or
to such person or persons as that taxpayer may designate in a request
for, or consent to, such disclosure, or to any other person, at the
taxpayer's request, to the extent necessary to comply with a request
for information or assistance made by the taxpayer to such other
person. However, tax information not received from the taxpayer must
not be so disclosed if the director determines that such disclosure
would compromise any investigation or litigation by any federal, state,
or local government agency in connection with the civil or criminal
liability of the taxpayer or another person, or that such disclosure
would identify a confidential informant, or that such disclosure is
contrary to any agreement entered into by the department that provides
for the reciprocal exchange of information with other government
agencies which agreement requires confidentiality with respect to such
information unless such information is required to be disclosed to the
taxpayer by the order of any court;
(c) Disclosing the name of a taxpayer against whom a warrant under
RCW 82.32.210 has been either issued or filed and remains outstanding
for a period of at least ten working days. The department is not
required to disclose any information under this subsection if a
taxpayer has entered a deferred payment arrangement with the department
for the payment of a warrant that has not been filed and is making
payments upon such deficiency that will fully satisfy the indebtedness
within twelve months;
(d) Publishing statistics so classified as to prevent the
identification of particular returns or reports or items thereof;
(e) Disclosing such return or tax information, for official
purposes only, to the governor or attorney general, or to any state
agency, or to any committee or subcommittee of the legislature dealing
with matters of taxation, revenue, trade, commerce, the control of
industry or the professions;
(f) Permitting the department of revenue's records to be audited
and examined by the proper state officer, his or her agents and
employees;
(g) Disclosing any such return or tax information to a peace
officer as defined in RCW 9A.04.110 or county prosecuting attorney, for
official purposes. The disclosure may be made only in response to a
search warrant, subpoena, or other court order, unless the disclosure
is for the purpose of criminal tax enforcement. A peace officer or
county prosecuting attorney who receives the return or tax information
may disclose that return or tax information only for use in the
investigation and a related court proceeding, or in the court
proceeding for which the return or tax information originally was
sought;
(h) Disclosing any such return or tax information to the proper
officer of the internal revenue service of the United States, the
Canadian government or provincial governments of Canada, or to the
proper officer of the tax department of any state or city or town or
county, for official purposes, but only if the statutes of the United
States, Canada or its provincial governments, or of such other state or
city or town or county, as the case may be, grants substantially
similar privileges to the proper officers of this state;
(i) Disclosing any such return or tax information to the United
States department of justice, including the bureau of alcohol, tobacco,
firearms and explosives, the department of defense, the immigration and
customs enforcement and the customs and border protection agencies of
the United States department of homeland security, the United States
coast guard, the alcohol and tobacco tax and trade bureau of the United
States department of treasury, and the United States department of
transportation, or any authorized representative of these federal
agencies, for official purposes;
(j) Publishing or otherwise disclosing the text of a written
determination designated by the director as a precedent pursuant to RCW
82.32.410;
(k) Disclosing, in a manner that is not associated with other tax
information, the taxpayer name, entity type, business address, mailing
address, revenue tax registration numbers, reseller permit numbers and
the expiration date and status of such permits, North American industry
classification system or standard industrial classification code of a
taxpayer, and the dates of opening and closing of business. This
subsection may not be construed as giving authority to the department
to give, sell, or provide access to any list of taxpayers for any
commercial purpose;
(l) Disclosing such return or tax information that is also
maintained by another Washington state or local governmental agency as
a public record available for inspection and copying under the
provisions of chapter 42.56 RCW or is a document maintained by a court
of record and is not otherwise prohibited from disclosure;
(m) Disclosing such return or tax information to the United States
department of agriculture for the limited purpose of investigating food
stamp fraud by retailers;
(n) Disclosing to a financial institution, escrow company, or title
company, in connection with specific real property that is the subject
of a real estate transaction, current amounts due the department for a
filed tax warrant, judgment, or lien against the real property;
(o) Disclosing to a person against whom the department has asserted
liability as a successor under RCW 82.32.140 return or tax information
pertaining to the specific business of the taxpayer to which the person
has succeeded;
(p) Disclosing real estate excise tax affidavit forms filed under
RCW 82.45.150 in the possession of the department, including real
estate excise tax affidavit forms for transactions exempt or otherwise
not subject to tax;
(q) Disclosing to local taxing jurisdictions the identity of
sellers granted relief under RCW 82.32.430(5)(b)(i) and the period for
which relief is granted;
(r) Disclosing such return or tax information to the court in
respect to the department's application for a subpoena under RCW
82.32.117;
(s) Disclosing to a person against whom the department has asserted
liability under RCW 83.100.120 return or tax information pertaining to
that person's liability for tax under chapter 83.100 RCW;
(t) Disclosing such return or tax information to the streamlined
sales tax governing board, member states of the streamlined sales tax
governing board, or authorized representatives of such board or states,
for the limited purposes of:
(i) Conducting on behalf of member states sales and use tax audits
of taxpayers; or
(ii) Auditing certified service providers or certified automated
systems providers; or
(u) Disclosing the amount of any tax preference claimed by a
taxpayer filing an annual report under section 201 of this act or any
new tax preference, as defined in RCW 82.32.805;
(v) Disclosing select tax information of any corporation,
partnership, or limited liability company, if the following criteria
are met, of which verification of (v)(i) of this subsection must be
provided to the department in a form and manner prescribed by the
department:
(i) The ownership interests in the taxpayer, regardless of whether
such interests are in the form of stock or any other type of security,
are covered securities under 15 U.S.C. Sec. 77 r(b)(1) or the entity is
controlled, directly or indirectly, by an entity with ownership
interests that are covered securities under 15 U.S.C. Sec. 77 r(b)(1);
(ii) The taxpayer electronically files a tax return on a monthly or
quarterly basis;
(iii) The taxpayer claims one or more tax preferences and the
amount of any single tax preference claimed by the taxpayer is ten
thousand dollars or more for any calendar year subject to disclosure.
If the amount of any single tax preference claimed by the taxpayer is
ten thousand dollars or more for the calendar year subject to
disclosure, the amount of any other tax preference claimed by the
taxpayer for the calendar year is subject to disclosure regardless of
the amount claimed; and
(iv) The tax reporting periods subject to disclosure ended at least
twenty-four months prior to the date of disclosure. For purposes of
this subsection (3)(v), "select tax information" means the taxable
amount and tax due and the tax savings from claiming a preferential tax
rate or tax credit, for taxes due under chapter 82.04 or 82.16 RCW.
"Select tax information" also includes the amount claimed by a taxpayer
under RCW 82.04.4292.
(w) Disclosing any such return or tax information when the
disclosure is specifically authorized under any other section of the
Revised Code of Washington.
(4)(a) The department may disclose return or taxpayer information
to a person under investigation or during any court or administrative
proceeding against a person under investigation as provided in this
subsection (4). The disclosure must be in connection with the
department's official duties relating to an audit, collection activity,
or a civil or criminal investigation. The disclosure may occur only
when the person under investigation and the person in possession of
data, materials, or documents are parties to the return or tax
information to be disclosed. The department may disclose return or tax
information such as invoices, contracts, bills, statements, resale or
exemption certificates, or checks. However, the department may not
disclose general ledgers, sales or cash receipt journals, check
registers, accounts receivable/payable ledgers, general journals,
financial statements, expert's workpapers, income tax returns, state
tax returns, tax return workpapers, or other similar data, materials,
or documents.
(b) Before disclosure of any tax return or tax information under
this subsection (4), the department must, through written
correspondence, inform the person in possession of the data, materials,
or documents to be disclosed. The correspondence must clearly identify
the data, materials, or documents to be disclosed. The department may
not disclose any tax return or tax information under this subsection
(4) until the time period allowed in (c) of this subsection has expired
or until the court has ruled on any challenge brought under (c) of this
subsection.
(c) The person in possession of the data, materials, or documents
to be disclosed by the department has twenty days from the receipt of
the written request required under (b) of this subsection to petition
the superior court of the county in which the petitioner resides for
injunctive relief. The court must limit or deny the request of the
department if the court determines that:
(i) The data, materials, or documents sought for disclosure are
cumulative or duplicative, or are obtainable from some other source
that is more convenient, less burdensome, or less expensive;
(ii) The production of the data, materials, or documents sought
would be unduly burdensome or expensive, taking into account the needs
of the department, the amount in controversy, limitations on the
petitioner's resources, and the importance of the issues at stake; or
(iii) The data, materials, or documents sought for disclosure
contain trade secret information that, if disclosed, could harm the
petitioner.
(d) The department must reimburse reasonable expenses for the
production of data, materials, or documents incurred by the person in
possession of the data, materials, or documents to be disclosed.
(e) Requesting information under (b) of this subsection that may
indicate that a taxpayer is under investigation does not constitute a
disclosure of tax return or tax information under this section.
(5) Service of a subpoena issued under RCW 82.32.117 does not
constitute a disclosure of return or tax information under this
section. Notwithstanding anything else to the contrary in this
section, a person served with a subpoena under RCW 82.32.117 may
disclose the existence or content of the subpoena to that person's
legal counsel.
(6) Any person acquiring knowledge of any return or tax information
in the course of his or her employment with the department of revenue
and any person acquiring knowledge of any return or tax information as
provided under subsection (3) (e), (f), (g), (h), (i), or (m) of this
section, who discloses any such return or tax information to another
person not entitled to knowledge of such return or tax information
under the provisions of this section, is guilty of a misdemeanor. If
the person guilty of such violation is an officer or employee of the
state, such person must forfeit such office or employment and is
incapable of holding any public office or employment in this state for
a period of two years thereafter.
NEW SECTION. Sec. 302 A new section is added to chapter 82.32
RCW to read as follows:
The department must provide tax information that is subject to
public disclosure under RCW 82.32.330(3) (u) and (v) on its web site in
the form of a searchable database and any additional format it deems
appropriate.
NEW SECTION. Sec. 401 Section 211 of this act expires July 1,
2015.
NEW SECTION. Sec. 402 Section 212 of this act takes effect July
1, 2015.
NEW SECTION. Sec. 403 Section 213 of this act expires July 1,
2015, subject to the contingency stated in section 2, chapter 2, Laws
of 2013 3rd sp. sess.
NEW SECTION. Sec. 404 Section 214 of this act takes effect July
1, 2015, subject to the contingency stated in section 2, chapter 2,
Laws of 2013 3rd sp. sess.