BILL REQ. #: S-1059.1
| State of Washington | 63rd Legislature | 2013 Regular Session |
Read first time 02/08/13. Referred to Committee on Trade & Economic Development.
AN ACT Relating to simplifying definitions and classifications concerning state and local tax systems; amending RCW 35.102.030, 35.102.040, 35.102.140, 35.102.160, 82.04.060, 82.04.230, 82.04.255, 82.04.260, 82.04.280, 82.04.285, 82.04.290, 35.102.150, 48.14.080, 82.04.051, 82.04.257, 82.04.261, 82.04.270, 82.04.29001, 82.04.29002, 82.04.293, 82.04.297, 82.04.298, 82.04.334, 82.04.360, 82.04.440, 82.04.4451, 82.04.44525, 82.04.4463, 82.04.4483, 82.04.460, 82.04.540, 82.04.620, 82.08.806, 82.16.100, 82.32.045, 82.32.533, and 82.45.195; reenacting and amending RCW 82.04.250 and 82.04.260; adding new sections to chapter 35.102 RCW; adding a new section to chapter 82.04 RCW; creating new sections; repealing RCW 82.04.272, 82.04.2905, 82.04.2906, 82.04.2907, 82.04.2908, 82.04.2909, 82.04.294, and 35.102.120; repealing 2010 c 114 s 104; repealing 2003 c 149 s 3; repealing 2010 c 106 s 206; repealing 2009 c 461 s 3; repealing 2006 c 300 s 7; repealing 2003 c 149 s 4; providing effective dates; and providing expiration dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 RCW 35.102.030 and 2003 c 79 s 3 are each amended to
read as follows:
The definitions in this section apply throughout this chapter ((79,
Laws of 2003,)) unless the context clearly requires otherwise.
(1) "Business" has the same meaning as given in chapter 82.04 RCW.
(2) "City" means a city, town, or code city.
(3) "Business and occupation tax" or "gross receipts tax" means a
tax imposed on or measured by the value of products, the gross income
of the business, or the gross proceeds of sales, as the case may be,
and that is the legal liability of the business.
(4) "Value of products" has the same meaning as given in chapter
82.04 RCW.
(5) "Gross income of the business" has the same meaning as given in
chapter 82.04 RCW.
(6) "Gross proceeds of sales" has the same meaning as given in
chapter 82.04 RCW.
(7) "Department" means the department of revenue.
(8) "State business and occupation tax" means the tax imposed in
chapter 82.04 RCW.
(9) "State business and occupation tax definitions" means the
definitions in chapter 82.04 RCW, rules adopted by the department to
administer chapter 82.04 RCW, and interpretive statements or other
public guidance issued by the department relating to the tax imposed in
chapter 82.04 RCW.
(10) "City business and occupation tax" means a business and
occupation tax imposed by a city.
(11) "Service and other business activities classification" means
the classification under which an activity is taxed if it is not taxed
under some other classification.
Sec. 102 RCW 35.102.040 and 2010 c 271 s 706 are each amended to
read as follows:
(1)(a) ((The cities, working through the association of Washington
cities, shall form a model ordinance development committee made up of
a representative sampling of cities that as of July 27, 2003, impose a
business and occupation tax. This committee shall work through the
association of Washington cities to adopt a model ordinance on
municipal gross receipts business and occupation tax. The model
ordinance and subsequent amendments shall)) After June 30, 2013, only
the department may amend the city business and occupation tax model
ordinance. Beginning July 1, 2013, the department may amend the model
ordinance as it deems appropriate. Amendments, other than those
required to conform with changes to state law, must be adopted using a
process that includes opportunity for substantial input from cities,
individually or through the association of Washington cities, business
stakeholders, and other members of the public. Input ((shall)) must be
solicited from statewide business associations and from local chambers
of commerce and downtown business associations in cities that levy a
business and occupation tax.
(b) The department of commerce ((shall)) must contract to post the
model ordinance on an internet web site and to make paper copies
available for inspection upon request. The department of revenue and
the department of licensing ((shall)) must post copies of or links to
the model ordinance on their internet web sites. Additionally, a city
that imposes a business and occupation tax must make copies of its
ordinance available for inspection and copying as provided in chapter
42.56 RCW.
(((c) The definitions and tax classifications in the model
ordinance may not be amended more frequently than once every four
years, however the model ordinance may be amended at any time to comply
with changes in state law. Any amendment to a mandatory provision of
the model ordinance must be adopted with the same effective date by all
cities.))
(2) A city that imposes a business and occupation tax must adopt
the mandatory provisions of the model ordinance. The following
provisions are mandatory:
(a) ((A system of credits that meets the requirements of RCW
35.102.060 and a form for such use;)) A uniform, minimum small business tax threshold of at least
the equivalent of twenty thousand dollars in gross income annually. A
city may elect to deviate from this requirement by creating a higher
threshold or exemption but it shall not deviate lower than the level
required in this subsection. If a city has a small business threshold
or exemption in excess of that provided in this subsection as of
January 1, 2003, and chooses to deviate below the threshold or
exemption level that was in place as of January 1, 2003, the city must
notify all businesses licensed to do business within the city at least
one hundred twenty days prior to the potential implementation of a
lower threshold or exemption amount;
(b)
(((c))) (b) Tax reporting frequencies that meet the requirements of
RCW 35.102.070;
(((d))) (c) Penalty and interest provisions that meet the
requirements of RCW 35.102.080 and 35.102.090;
(((e))) (d) Claim periods that meet the requirements of RCW
35.102.100;
(((f))) (e) Refund provisions that meet the requirements of RCW
35.102.110; ((and)) (f) Provisions consistent with RCW 82.04.480 and 82.04.520;
(g) Definitions, which at a minimum, must include the definitions
enumerated in RCW 35.102.030 and 35.102.120. The definitions in
chapter 82.04 RCW shall be used as the baseline for all definitions in
the model ordinance, and any deviation in the model ordinance from
these definitions must be described by a comment in the model
ordinance.
(3)
(g)(i) Tax classifications for reporting purposes that include all
of the state business and occupation tax classifications, including
those created in RCW 82.04.230 through 82.04.298, classifications
created after the effective date of this section and codified outside
of those statutes, and any classifications created by the department
under the authority of section 202 of this act.
(ii) The model ordinance may not include:
(A) Any classifications that are not used for state business and
occupation tax purposes;
(B) Any classifications for persons taxable under the state public
utility tax classification engaging in the following activities:
Hauling persons or property for hire by watercraft between points in
Washington; operating tugboats of any size and income from the sale of
transportation services by vessels over sixty-five feet; sales of
transportation services using vessels under sixty-five feet, other than
tugboats; or persons engaged in chartering or transporting persons by
water from one location in Washington to another location within this
state. This subsection (2)(g)(i)(B) does not include sightseeing tours
or activities that are in the nature of guided tours where the tour may
include some water transportation; and
(C) Any classifications for persons taxable under the state
business and occupation tax classifications of motor transportation or
urban transportation; and
(h)(i) A provision stating that the state business and occupation
tax definitions apply to the model ordinance and any city's business
and occupation tax in the same manner as they apply for purposes of
chapter 82.04 RCW. Any deviation in the model ordinance from these
definitions is only permitted when expressly provided for by statute.
If a deviation is allowed by statute, such definition must be stated in
full in the model ordinance. Further, any deviation in the definitions
allowed is subject to the publication requirements in subsection (5) of
this section.
(ii) Except as provided otherwise in this subsection, a city may
not, for purposes of its business and occupation tax, deviate from the
state business and occupation tax definitions in its ordinances, rules,
other public guidance, and interpretations.
(iii) For purposes of complying with this subsection (2)(h),
references to the department in state business and occupation tax
definitions must be construed as references to the city or cities,
unless the context clearly requires otherwise.
(iv) For purposes of complying with this subsection (2)(h),
references to the state in state business and occupation tax
definitions must be construed as references to the city or cities,
unless the context clearly requires otherwise.
(v) Any portion of a state business and occupation tax definition
that relates solely to sales or use tax or otherwise does not apply to
the tax imposed in chapter 82.04 RCW does not apply to the model
ordinance or business and occupation taxes imposed by the cities.
(vi) Except as otherwise provided in this section, the cities and
the model ordinance need not adopt any exclusionary language contained
in a state business and occupation tax definition, but only if the
exclusionary language has the effect of exempting a person, activity,
or income from the tax imposed in chapter 82.04 RCW.
(vii) Notwithstanding (h)(vi) of this subsection (2), a city may
not deviate from the exclusion in RCW 82.04.062 from the definitions of
"wholesale sale," "sale at wholesale," "retail sale," and "sale at
retail." Cities imposing a business and occupation tax must compute
tax on the business of making sales of precious metal bullion or
monetized bullion consistent with RCW 82.04.062.
(viii) Notwithstanding (h)(vii) of this subsection (2), cities may
not deviate from the exclusion in RCW 82.04.216 of steam, electricity,
and electrical energy from various terms denoting tangible items that
may be used, sold, or consumed.
(ix) Language in a state business and occupation tax definition
governing how the defined term is to be applied for state business and
occupation tax purposes also applies for purposes of city business and
occupation taxes.
(3) Tax classifications must be uniform among all cities and with
state business and occupation tax classifications.
(4) Except for the deduction required by RCW 35.102.160 and the
system of credits developed to address multiple taxation ((under
subsection (2)(a) of this section)), a city may adopt its own
provisions for tax rates, tax exemptions, tax credits, and tax
deductions.
(((4))) (5) Any city that adopts an ordinance that deviates from
the nonmandatory provisions of the model ordinance ((shall)) must make
a description of such differences available to the department for
publication by the department to the public((, in written and
electronic form)).
Sec. 103 RCW 35.102.140 and 2003 c 79 s 14 are each amended to
read as follows:
((Cities imposing business and occupation taxes must comply with
all requirements of RCW 35.102.020 through 35.102.130 by December 31,
2004. A city that has not complied with the requirements of RCW
35.102.020 through 35.102.130 by December 31, 2004, may not impose a
tax that is imposed by a city on the privilege of engaging in business
activities.)) (1) Cities imposing business and occupation taxes after
December 31, 2004, must comply with ((RCW 35.102.020 through
35.102.130)) this chapter.
(2) The department may issue official written guidance on any
provision of a city's business and occupation tax that is required by
this chapter to be administered consistently with the state business
and occupation tax. Any such official public guidance issued by the
department preempts any conflicting interpretation of the city.
Likewise, any official public guidance issued by the department on a
state business and occupation tax matter preempts any conflicting
interpretation by the city on a matter involving a provision of the
city's business and occupation tax that is required by this chapter to
be administered consistently with the state business and occupation
tax. Nothing in this subsection is intended to affect the
interpretation or application of a city's business and occupation tax
for periods before the effective date of this section.
Sec. 104 RCW 35.102.160 and 2006 c 301 s 6 are each amended to
read as follows:
(1) The provision of professional employer services by a
professional employer organization is taxable under a city's service
and other business activities classification. A city that imposes its
business and occupation tax on professional employer services performed
by a professional employer organization((, regardless of the tax
classification applicable to such services, shall)) must provide a
deduction identical to the deduction in RCW 82.04.540(2).
(2) For the purposes of this section, "professional employer
organization" and "professional employer services" have the same
meanings as in RCW 82.04.540.
NEW SECTION. Sec. 105 A new section is added to chapter 35.102
RCW to read as follows:
Beginning on the effective date of this section, the department may
adopt rules and issue interpretive and policy statements in accordance
with the administrative procedure act, chapter 34.05 RCW, as it
considers necessary or useful in enhancing uniformity between state and
city business and occupation taxes and in carrying out the department's
duties under this chapter. Such rules and interpretive and policy
statements take precedence over any conflicting rules and interpretive
or policy guidance issued by the cities. The department must seek
input from affected cities before issuing any rules and interpretive
and policy statements concerning city business and occupation taxes to
the extent required by chapter 34.05 RCW.
NEW SECTION. Sec. 106 A new section is added to chapter 35.102
RCW to read as follows:
For purposes of city business and occupation taxes, a person may
meet its burden of proving that a sale is a wholesale sale rather than
a retail sale as provided in RCW 82.04.470. Upon request of a city,
the department must assist the city in determining whether a person has
met the requirements of RCW 82.04.470(6).
NEW SECTION. Sec. 201 (1) The legislature finds that there are
currently over fifty tax classifications for purposes of the state
business and occupation tax. Most of these tax classifications were
created to provide a reduced tax rate to certain business activities.
(2) The legislature further finds that the considerable number of
state business and occupation tax classifications creates complexity
for taxpayers, increases opportunities for disputes between taxpayers
and the department of revenue, and is a major barrier to achieving
significant uniformity between state and local business and occupation
tax systems.
(3) Therefore, the legislature intends Part II of this act to
significantly reduce state business and occupation tax classifications
by:
(a) Consolidating the extracting and extracting for hire
classifications;
(b) Consolidating the public road construction and government
contracting classifications into the wholesaling classification; and
(c) Consolidating the public and nonprofit hospital and real estate
broker classifications into the catch-all service and other business
activities classification.
(4) Part II of this act is not intended to materially affect the
tax burden of any person. If any provision of sections 202 through 238
of this act would, under a plain meaning analysis, materially impact a
person's tax liability, the legislature expresses its intent that such
provision should be deemed a mistake and interpreted to achieve a
result that is consistent with the legislature's intent as described in
this section.
NEW SECTION. Sec. 202 A new section is added to chapter 82.04
RCW to read as follows:
(1) Except as provided otherwise in subsection (2) of this section,
for purposes of reporting the tax due under this chapter in a way that
provides taxpayers with more consistency between state and city-imposed
business and occupation taxes or for ease of administration for the
department or taxpayers, the department may classify business
activities other than as provided in RCW 82.04.230 through 82.04.298.
However, new classifications created under the authority of this
section do not affect the tax rates applicable to the activities that
come within the new classifications.
(2) The department may not consolidate the manufacturing and
processing for hire classifications.
Sec. 203 RCW 82.04.060 and 2010 c 106 s 203 are each amended to
read as follows:
"Sale at wholesale" or "wholesale sale" means:
(1) Any sale, which is not a sale at retail, of:
(a) Tangible personal property;
(b) Services defined as a retail sale in RCW 82.04.050(2) (a) or
(g);
(c) Amusement or recreation services as defined in RCW
82.04.050(3)(a);
(d) Prewritten computer software;
(e) Services described in RCW 82.04.050(6)(b);
(f) Extended warranties as defined in RCW 82.04.050(7);
(g) Competitive telephone service, ancillary services, or
telecommunications service as those terms are defined in RCW 82.04.065;
or
(h) Digital goods, digital codes, or digital automated services;
(2) Any charge made for labor and services rendered for persons who
are not consumers, in respect to real or personal property, if such
charge is expressly defined as a retail sale by RCW 82.04.050 when
rendered to or for consumers. For the purposes of this subsection (2),
"real or personal property" does not include any natural products named
in RCW 82.04.100; ((and))
(3) The sale of any service for resale, if the sale is excluded
from the definition of "sale at retail" and "retail sale" in RCW
82.04.050(14); and
(4) Any sale of or charge made for labor and services if the sale
or charge is excluded from the definition of retail sale in RCW
82.04.050 (10) or (12). Nothing in this subsection may be construed as
affecting the status of persons providing such services to consumers as
provided in RCW 82.04.190.
Sec. 204 RCW 82.04.230 and 2006 c 300 s 5 are each amended to
read as follows:
(1) Upon every person engaging within this state in business as an
extractor or extractor for hire, except persons taxable as an extractor
or extractor for hire under any other provision in this chapter; as to
such persons the amount of the tax with respect to such business
((shall be)) is, in the case of extractors, equal to the value of the
products, including by-products, extracted for sale or for commercial
or industrial use, and, in the case of extractors for hire, the gross
income of the business of extracting for hire, multiplied by the rate
of 0.484 percent.
(2) The measure of the tax on extractors is the value of the
products, including by-products, so extracted, regardless of the place
of sale or the fact that deliveries may be made to points outside the
state.
Sec. 205 RCW 82.04.250 and 2010 1st sp.s. c 23 s 509 are each
reenacted and amended to read as follows:
(1) Upon every person engaging within this state in the business of
making sales at retail, except persons taxable ((as retailers)) under
other provisions of this chapter on the business of making sales at
retail, as to such persons, the amount of tax with respect to such
business is equal to the gross proceeds of sales of the business,
multiplied by the rate of 0.471 percent.
(2) Upon every person engaging within this state in the business of
making sales at retail that are exempt from the tax imposed under
chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or
82.08.0263, except persons taxable under ((RCW 82.04.260(10) or))
subsection (3) of this section, as to such persons, the amount of tax
with respect to such business is equal to the gross proceeds of sales
of the business, multiplied by the rate of 0.484 percent.
(3) Until July 1, 2024, upon every person classified by the federal
aviation administration as a federal aviation regulation part 145
certificated repair station and that is engaging within this state in
the business of making sales at retail that are exempt from the tax
imposed under chapter 82.08 RCW by reason of RCW 82.08.0261,
82.08.0262, or 82.08.0263, as to such persons, the amount of tax with
respect to such business is equal to the gross proceeds of sales of the
business, multiplied by the rate of .2904 percent.
Sec. 206 RCW 82.04.255 and 2011 c 322 s 2 are each amended to
read as follows:
(1) ((Upon every person engaging within the state in)) The business
of providing real estate brokerage services((; as to such persons, the
amount of the tax with respect to such business is equal to the gross
income of the business, multiplied by the rate of 1.5 percent)) is
subject to tax under RCW 82.04.290.
(2) The measure of the tax on real estate commissions earned by the
real estate firm is the gross commission earned by the particular real
estate firm including that portion of the commission paid to brokers,
including designated and managing brokers, in the same firm on a
particular transaction. However, when a real estate commission on a
particular transaction is divided among real estate firms at the
closing of the transaction, including a firm located out of state, each
firm must pay the tax only upon its respective shares of said
commission. Moreover, when the real estate firm has paid the tax as
provided herein, brokers, including designated and managing brokers,
within the same real estate firm may not be required to pay a similar
tax upon the same transaction. If any firm located out of state
receives a share of commission on a particular transaction, that
company or broker must pay the tax based on the requirements of this
section and RCW 82.04.067.
(3) For the purposes of this section, "broker," "designated
broker," "managing broker," and "real estate firm" have the same
meaning as provided in RCW 18.85.011.
Sec. 207 RCW 82.04.260 and 2012 2nd sp.s. c 6 s 602 and 2012 2nd
sp.s. c 6 s 204 are each reenacted and amended to read as follows:
(1) ((Upon every person engaging within this state in the business
of manufacturing:)) 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.
(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) Beginning July 1, 2015, dairy products that as of September 20,
2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135,
including by-products from the manufacturing of the dairy products such
as whey and casein; or selling the same to purchasers who transport in
the ordinary course of business the goods out of state; as to such
persons the tax imposed is equal to the value of the products
manufactured or the gross proceeds derived from such sales multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(d) Beginning July 1, 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)
(((8))) (2)(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.)) (3)(a) Beginning October 1, 2005, upon every person engaging
within this state in the business of manufacturing commercial
airplanes, or components of such airplanes, or making sales, at retail
or wholesale, of commercial airplanes or components of such airplanes,
manufactured by the seller, as to such persons the amount of tax with
respect to such business is, in the case of manufacturers, equal to the
value of the product manufactured and the gross proceeds of sales of
the product manufactured, or in the case of processors for hire, equal
to the gross income of the business, multiplied by the rate of:
(10) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a
nonprofit corporation or by the state or any of its political
subdivisions, as to such persons, the amount of tax with respect to
such activities is equal to the gross income of the business multiplied
by the rate of 0.75 percent through June 30, 1995, and 1.5 percent
thereafter.
(11)
(i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
(ii) 0.2904 percent beginning July 1, 2007.
(b) Beginning July 1, 2008, upon every person who is not eligible
to report under the provisions of (a) of this subsection (((11))) (3)
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))) (3), "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))) (3) must file a complete annual report with the department
under RCW 82.32.534.
(e) This subsection (((11))) (3) does not apply on and after July
1, 2024.
(((12))) (4)(a) Until July 1, 2024, upon every person engaging
within this state in the business of extracting timber or extracting
timber for hire ((timber)); as to such persons the amount of tax with
respect to the business is, in the case of extractors, equal to the
value of products, including by-products, extracted, or in the case of
extractors for hire, equal to the gross income of the business,
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(b) Until July 1, 2024, upon every person engaging within this
state in the business of manufacturing or processing for hire: (i)
Timber into timber products or wood products; or (ii) timber products
into other timber products or wood products; as to such persons the
amount of the tax with respect to the business is, in the case of
manufacturers, equal to the value of products, including by-products,
manufactured, or in the case of processors for hire, equal to the gross
income of the business, multiplied by the rate of 0.4235 percent from
July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1,
2007, through June 30, 2024.
(c) Until July 1, 2024, upon every person engaging within this
state in the business of selling at wholesale: (i) Timber extracted by
that person; (ii) timber products manufactured by that person from
timber or other timber products; or (iii) wood products manufactured by
that person from timber or timber products; as to such persons the
amount of the tax with respect to the business is equal to the gross
proceeds of sales of the timber, timber products, or wood products
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(d) Until July 1, 2024, upon every person engaging within this
state in the business of selling standing timber; as to such persons
the amount of the tax with respect to the business is equal to the
gross income of the business multiplied by the rate of 0.2904 percent.
For purposes of this subsection (((12))) (4)(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))) (4)(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))) (4) must file a complete annual survey with the department
under RCW 82.32.585.
(((13) Upon every person engaging within this state in inspecting,
testing, labeling, and storing canned salmon owned by another person,
as to such persons, the amount of tax with respect to such activities
is equal to the gross income derived from such activities multiplied by
the rate of 0.484 percent.)) (5)(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.
(14)
(b) A person reporting under the tax rate provided in this
subsection (((14))) (5) must file a complete annual report with the
department under RCW 82.32.534.
Sec. 208 RCW 82.04.260 and 2012 2nd sp.s. c 6 s 204 are each
amended to read as follows:
(1) ((Upon every person engaging within this state in the business
of manufacturing:)) 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.
(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) Beginning July 1, 2015, dairy products that as of September 20,
2001, are identified in 21 C.F.R., chapter 1, parts 131, 133, and 135,
including by-products from the manufacturing of the dairy products such
as whey and casein; or selling the same to purchasers who transport in
the ordinary course of business the goods out of state; as to such
persons the tax imposed is equal to the value of the products
manufactured or the gross proceeds derived from such sales multiplied
by the rate of 0.138 percent. Sellers must keep and preserve records
for the period required by RCW 82.32.070 establishing that the goods
were transported by the purchaser in the ordinary course of business
out of this state;
(d) Beginning July 1, 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)
(((8))) (2)(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.)) (3)(a) Beginning October 1, 2005, upon every person engaging
within this state in the business of manufacturing commercial
airplanes, or components of such airplanes, or making sales, at retail
or wholesale, of commercial airplanes or components of such airplanes,
manufactured by the seller, as to such persons the amount of tax with
respect to such business is, in the case of manufacturers, equal to the
value of the product manufactured and the gross proceeds of sales of
the product manufactured, or in the case of processors for hire, equal
to the gross income of the business, multiplied by the rate of:
(10) Upon every person engaging within this state in business as a
hospital, as defined in chapter 70.41 RCW, that is operated as a
nonprofit corporation or by the state or any of its political
subdivisions, as to such persons, the amount of tax with respect to
such activities is equal to the gross income of the business multiplied
by the rate of 0.75 percent through June 30, 1995, and 1.5 percent
thereafter.
(11)
(i) 0.4235 percent from October 1, 2005, through June 30, 2007; and
(ii) 0.2904 percent beginning July 1, 2007.
(b) Beginning July 1, 2008, upon every person who is not eligible
to report under the provisions of (a) of this subsection (((11))) (3)
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))) (3), "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))) (3) must file a complete annual report with the department
under RCW 82.32.534.
(e) This subsection (((11))) (3) does not apply on and after July
1, 2024.
(((12))) (4)(a) Until July 1, 2024, upon every person engaging
within this state in the business of extracting timber or extracting
timber for hire ((timber)); as to such persons the amount of tax with
respect to the business is, in the case of extractors, equal to the
value of products, including by-products, extracted, or in the case of
extractors for hire, equal to the gross income of the business,
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(b) Until July 1, 2024, upon every person engaging within this
state in the business of manufacturing or processing for hire: (i)
Timber into timber products or wood products; or (ii) timber products
into other timber products or wood products; as to such persons the
amount of the tax with respect to the business is, in the case of
manufacturers, equal to the value of products, including by-products,
manufactured, or in the case of processors for hire, equal to the gross
income of the business, multiplied by the rate of 0.4235 percent from
July 1, 2006, through June 30, 2007, and 0.2904 percent from July 1,
2007, through June 30, 2024.
(c) Until July 1, 2024, upon every person engaging within this
state in the business of selling at wholesale: (i) Timber extracted by
that person; (ii) timber products manufactured by that person from
timber or other timber products; or (iii) wood products manufactured by
that person from timber or timber products; as to such persons the
amount of the tax with respect to the business is equal to the gross
proceeds of sales of the timber, timber products, or wood products
multiplied by the rate of 0.4235 percent from July 1, 2006, through
June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
2024.
(d) Until July 1, 2024, upon every person engaging within this
state in the business of selling standing timber; as to such persons
the amount of the tax with respect to the business is equal to the
gross income of the business multiplied by the rate of 0.2904 percent.
For purposes of this subsection (((12))) (4)(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))) (4)(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))) (4) must file a complete annual survey with the department
under RCW 82.32.585.
(((13) Upon every person engaging within this state in inspecting,
testing, labeling, and storing canned salmon owned by another person,
as to such persons, the amount of tax with respect to such activities
is equal to the gross income derived from such activities multiplied by
the rate of 0.484 percent.)) (5)(a) Upon every person engaging within this state in the
business of printing a newspaper, publishing a newspaper, or both, the
amount of tax on such business is equal to the gross income of the
business multiplied by the rate of 0.2904 percent.
(14)
(b) A person reporting under the tax rate provided in this
subsection (((14))) (5) must file a complete annual report with the
department under RCW 82.32.534.
Sec. 209 RCW 82.04.280 and 2010 c 106 s 205 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business
of: (a) Printing materials other than newspapers, and of publishing
periodicals or magazines; or (b) ((building, repairing or improving any
street, place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
which is owned by a municipal corporation or political subdivision of
the state or by the United States and which is used or to be used,
primarily for foot or vehicular traffic including mass transportation
vehicles of any kind and including any readjustment, reconstruction or
relocation of the facilities of any public, private or cooperatively
owned utility or railroad in the course of such building, repairing or
improving, the cost of which readjustment, reconstruction, or
relocation, is the responsibility of the public authority whose street,
place, road, highway, easement, right-of-way, mass public
transportation terminal or parking facility, bridge, tunnel, or trestle
is being built, repaired or improved; (c) extracting for hire or
processing for hire, except persons taxable as extractors for hire or
processors for hire under another section of this chapter; (d)
operating a cold storage warehouse or storage warehouse, but not
including the rental of cold storage lockers; (e) representing and
performing services for fire or casualty insurance companies as an
independent resident managing general agent licensed under the
provisions of chapter 48.17 RCW; (f))) radio and television
broadcasting, excluding network, national and regional advertising
computed as a standard deduction based on the national average thereof
as annually reported by the federal communications commission, or in
lieu thereof by itemization by the individual broadcasting station, and
excluding that portion of revenue represented by the out-of-state
audience computed as a ratio to the station's total audience as
measured by the 100 micro-volt signal strength and delivery by wire, if
any; (((g) engaging in activities which bring a person within the
definition of consumer contained in RCW 82.04.190(6);)) as to such
persons, the amount of tax on such business is equal to the gross
income of the business multiplied by the rate of 0.484 percent.
(2) For the purposes of this section, ((the following definitions
apply unless the context clearly requires otherwise.)) "periodical or magazine" means a printed publication, other
than a newspaper, issued regularly at stated intervals at least once
every three months, including any supplement or special edition of the
publication.
(a) "Cold storage warehouse" means a storage warehouse used to
store fresh and/or frozen perishable fruits or vegetables, meat,
seafood, dairy products, or fowl, or any combination thereof, at a
desired temperature to maintain the quality of the product for orderly
marketing.
(b) "Storage warehouse" means a building or structure, or any part
thereof, in which goods, wares, or merchandise are received for storage
for compensation, except field warehouses, fruit warehouses, fruit
packing plants, warehouses licensed under chapter 22.09 RCW, public
garages storing automobiles, railroad freight sheds, docks and wharves,
and "self-storage" or "mini storage" facilities whereby customers have
direct access to individual storage areas by separate entrance.
"Storage warehouse" does not include a building or structure, or that
part of such building or structure, in which an activity taxable under
RCW 82.04.272 is conducted.
(c)
Sec. 210 RCW 82.04.285 and 2005 c 369 s 5 are each amended to
read as follows:
(1) Upon every person engaging within this state in the business of
operating contests of chance; as to such persons, the amount of tax
with respect to the business of operating contests of chance is equal
to the gross income of the business derived from contests of chance
multiplied by the rate of 1.5 percent.
(2) An additional tax is imposed on those persons subject to tax in
subsection (1) of this section. The amount of the additional tax with
respect to the business of operating contests of chance is equal to the
gross income of the business derived from contests of chance multiplied
by the rate of 0.1 percent through June 30, 2006, and 0.13 percent
thereafter. The money collected under this subsection (2) ((shall))
must be deposited in the problem gambling account created in RCW
43.20A.892. ((This subsection does not apply to businesses operating
contests of chance when the gross income from the operation of contests
of chance is less than fifty thousand dollars per year.))
(3) For the purpose of this section, "contests of chance" means any
contests, games, gaming schemes, or gaming devices, other than the
state lottery as defined in RCW 67.70.010, in which the outcome depends
in a material degree upon an element of chance, notwithstanding that
skill of the contestants may also be a factor in the outcome. The term
includes social card games, bingo, raffle, and punchboard games, and
pull-tabs as defined in chapter 9.46 RCW. The term does not include
race meets for the conduct of which a license must be secured from the
Washington horse racing commission, or "amusement game" as defined in
RCW 9.46.0201.
(4) "Gross income of the business" does not include the monetary
value or actual cost of any prizes that are awarded, amounts paid to
players for winning wagers, accrual of prizes for progressive jackpot
contests, or repayment of amounts used to seed guaranteed progressive
jackpot prizes.
Sec. 211 RCW 82.04.290 and 2011 c 174 s 101 are each amended to
read as follows:
(1) ((Upon every person engaging within this state in the business
of providing international investment management services, as to such
persons, the amount of tax with respect to such business shall be equal
to the gross income or gross proceeds of sales of the business
multiplied by a rate of 0.275 percent.)) Upon every person engaging within this state in any
business activity other than or in addition to an activity taxed
explicitly under another section in this chapter ((
(2)(a)or subsection (1) or
(3) of this section)); as to such persons the amount of tax on account
of such activities ((shall be)) is equal to the gross income of the
business multiplied by the rate of 1.5 percent.
(((b))) (2) This ((subsection (2) includes)) section applies to,
among others, and without limiting the scope hereof (whether or not
title to materials used in the performance of such business passes to
another by accession, confusion or other than by outright sale),
persons engaged in the business of rendering any type of service which
does not constitute a "sale at retail" or a "sale at wholesale." This
includes, but is not limited to, the business of inspecting, testing,
labeling, and storing canned salmon owned by another person; conducting
research and development for compensation; providing chemical
dependency treatment services; providing travel agent or tour operator
services; acting as an international steamship agent, international
customs house broker, international freight forwarder, vessel or cargo
charter broker in foreign commerce, or international air cargo agent;
performing aerospace product development for others; operating a
warehouse; providing international investment management services;
providing boarding home services; receiving income from royalties;
providing day care services; and performing insurance services.
(3) The value of advertising, demonstration, and promotional
supplies and materials furnished to an agent by his or her principal or
supplier to be used for informational, educational, and promotional
purposes ((shall)) is not ((be)) considered a part of the agent's
remuneration or commission and ((shall)) is not ((be)) subject to
taxation under this section.
(((3))) (4)(a) Until July 1, 2024, upon every person engaging
within this state in the business of performing aerospace product
development for others, as to such persons, the amount of tax with
respect to such business shall be equal to the gross income of the
business multiplied by a rate of 0.9 percent.
(b) "Aerospace product development" has the meaning as provided in
RCW 82.04.4461.
(5) The definitions in this subsection apply throughout this
section unless the context clearly requires otherwise.
(a) "Boarding home services" means any services that a licensed
boarding home is authorized to provide to residents of the boarding
home, either directly or indirectly, and housing provided to residents
of the boarding home.
(b) "Licensed boarding home" means a boarding home licensed under
chapter 18.20 RCW.
(c) "Insurance services" means:
(i) Representing and performing services for fire or casualty
insurance companies as an independent resident managing general agent
licensed under the provisions of chapter 48.17 RCW; or
(ii) The licensed activities of insurance producers or title
insurance agents licensed under chapter 48.17 RCW or surplus line
brokers licensed under chapter 48.15 RCW.
NEW SECTION. Sec. 212 The following acts or parts of acts are
each repealed:
(1) RCW 82.04.272 (Tax on warehousing and reselling prescription
drugs) and 2003 c 168 s 401 & 1998 c 343 s 1;
(2) RCW 82.04.2905 (Tax on providing day care) and 1998 c 312 s 7;
(3) RCW 82.04.2906 (Tax on certain chemical dependency services)
and 2003 c 343 s 1;
(4) RCW 82.04.2907 (Tax on royalties) and 2010 1st sp.s. c 23 s
107, 2010 c 111 s 302, 2009 c 535 s 407, 2001 c 320 s 3, & 1998 c 331
s 1;
(5) RCW 82.04.2908 (Tax on provision of room and domiciliary care
to assisted living facility residents) and 2012 c 10 s 70, 2005 c 514
s 302, & 2004 c 174 s 1;
(6) RCW 82.04.2909 (Tax on aluminum smelters) and 2011 c 174 s 301;
(7) RCW 82.04.294 (Tax on manufacturers or wholesalers of solar
energy systems) and 2011 c 179 s 1, 2010 c 114 s 109, 2009 c 469 s 501,
2007 c 54 s 8, & 2005 c 301 s 2;
(8) RCW 35.102.120 (Definitions -- Tax classifications) and 2003 c 79
s 12;
(9) 2010 c 114 s 104;
(10) 2003 c 149 s 3;
(11) 2010 c 106 s 206;
(12) 2009 c 461 s 3;
(13) 2006 c 300 s 7; and
(14) 2003 c 149 s 4.
Sec. 213 RCW 35.102.150 and 2011 c 174 s 201 are each amended to
read as follows:
Notwithstanding RCW 35.102.130, a city that imposes a business and
occupation tax must allocate a person's gross income from the
activities of printing, and of publishing newspapers, periodicals, or
magazines, to the principal place in this state from which the
taxpayer's business is directed or managed. As used in this section,
the activities of printing, and of publishing newspapers, periodicals,
or magazines are those activities to which the tax rates in RCW
82.04.260(((13))) (5) and 82.04.280(1)(a) apply.
Sec. 214 RCW 48.14.080 and 2010 1st sp.s. c 23 s 520 are each
amended to read as follows:
(1) As to insurers, other than title insurers and taxpayers under
RCW 48.14.0201, the taxes imposed by this title are in lieu of all
other taxes, except as otherwise provided in this section.
(2) Subsection (1) of this section does not apply with respect to:
(a) Taxes on real and tangible personal property;
(b) Excise taxes on the sale, purchase, use, or possession of (i)
real property; (ii) tangible personal property; (iii) extended
warranties; (iv) services, including digital automated services as
defined in RCW 82.04.192; and (v) digital goods and digital codes as
those terms are defined in RCW 82.04.192; and
(c) The tax imposed in ((RCW 82.04.260(9), regarding)) chapter
82.04 RCW on public and nonprofit hospitals.
(3) For the purposes of this section, the term "taxes" includes
taxes imposed by the state or any county, city, town, municipal
corporation, quasi-municipal corporation, or other political
subdivision.
Sec. 215 RCW 82.04.051 and 1999 c 212 s 2 are each amended to
read as follows:
(1) As used in RCW 82.04.050, the term "services rendered in
respect to" means those services that are directly related to the
constructing, building, repairing, improving, and decorating of
buildings or other structures and that are performed by a person who is
responsible for the performance of the constructing, building,
repairing, improving, or decorating activity. The term does not
include services such as engineering, architectural, surveying,
flagging, accounting, legal, consulting, or administrative services
provided to the consumer of, or person responsible for performing, the
constructing, building, repairing, improving, or decorating services.
(2) A contract or agreement under which a person is responsible for
both services that would otherwise be subject to tax as a service under
RCW 82.04.290(((2))) and also constructing, building, repairing,
improving, or decorating activities that would otherwise be subject to
tax under another section of this chapter is subject to the tax that
applies to the predominant activity under the contract or agreement.
(3) Unless otherwise provided by law, a contract or agreement under
which a person is responsible for activities that are subject to tax as
a service under RCW 82.04.290(((2))), and a subsequent contract or
agreement under which the same person is responsible for constructing,
building, repairing, improving, or decorating activities subject to tax
under another section of this chapter, ((shall)) may not be combined
and taxed as a single activity if at the time of the first contract or
agreement it was not contemplated by the parties, as evidenced by the
facts, that the same person would be awarded both contracts.
(4) As used in this section "responsible for the performance" means
that the person is obligated to perform the activities, either
personally or through a third party. A person who reviews work for a
consumer, retailer, or wholesaler but does not supervise or direct the
work is not responsible for the performance of the work. A person who
is financially obligated for the work, such as a bank, but who does not
have control over the work itself is not responsible for the
performance of the work.
Sec. 216 RCW 82.04.257 and 2010 c 111 s 301 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section, upon
every person engaging within this state in the business of making sales
at retail or wholesale of digital goods, digital codes, digital
automated services, or services described in RCW 82.04.050 (2)(g) or
(6)(b), as to such persons, the amount of tax with respect to such
business is equal to the gross proceeds of sales of the business,
multiplied by the rate of 0.471 percent in the case of retail sales and
by the rate of 0.484 percent in the case of wholesale sales.
(2) Persons providing subscription television services or
subscription radio services are subject to tax under RCW
82.04.290(((2))) on the gross income of the business received from
providing such services.
(3) For purposes of this section, a person is considered to be
engaging within this state in the business of making sales of digital
goods, digital codes, digital automated services, or services described
in RCW 82.04.050 (2)(g) or (6)(b), if the person makes sales of digital
goods, digital codes, digital automated services, or services described
in RCW 82.04.050 (2)(g) or (6)(b) and the sales are sourced to this
state under RCW 82.32.730 for sales tax purposes or would have been
sourced to this state under RCW 82.32.730 if the sale had been taxable
under chapter 82.08 RCW.
(4) A person subject to tax under this section is subject to the
mandatory electronic filing and payment requirements in RCW 82.32.080.
Sec. 217 RCW 82.04.261 and 2010 1st sp.s. c 23 s 510 are each
amended to read as follows:
(1) In addition to the taxes imposed under RCW 82.04.260(((11)))
(4), a surcharge is imposed on those persons who are subject to any of
the taxes imposed under RCW 82.04.260(((11))) (4). Except as otherwise
provided in this section, the surcharge is equal to 0.052 percent. The
surcharge is added to the rates provided in RCW 82.04.260(((11))) (4)
(a), (b), (c), and (d). The surcharge and this section expire July 1,
2024.
(2) All receipts from the surcharge imposed under this section must
be deposited into the forest and fish support account created in RCW
76.09.405.
(3)(a) The surcharge imposed under this section is suspended if:
(i) Receipts from the surcharge total at least eight million
dollars during any fiscal biennium; or
(ii) The office of financial management certifies to the department
that the federal government has appropriated at least two million
dollars for participation in forest and fish report-related activities
by federally recognized Indian tribes located within the geographical
boundaries of the state of Washington for any federal fiscal year.
(b)(i) The suspension of the surcharge under (a)(i) of this
subsection (3) takes effect on the first day of the calendar month that
is at least thirty days after the end of the month during which the
department determines that receipts from the surcharge total at least
eight million dollars during the fiscal biennium. The surcharge is
imposed again at the beginning of the following fiscal biennium.
(ii) The suspension of the surcharge under (a)(ii) of this
subsection (3) takes effect on the later of the first day of October of
any federal fiscal year for which the federal government appropriates
at least two million dollars for participation in forest and fish
report-related activities by federally recognized Indian tribes located
within the geographical boundaries of the state of Washington, or the
first day of a calendar month that is at least thirty days following
the date that the office of financial management makes a certification
to the department under subsection (5) of this section. The surcharge
is imposed again on the first day of the following July.
(4)(a) If, by October 1st of any federal fiscal year, the office of
financial management certifies to the department that the federal
government has appropriated funds for participation in forest and fish
report-related activities by federally recognized Indian tribes located
within the geographical boundaries of the state of Washington but the
amount of the appropriation is less than two million dollars, the
department must adjust the surcharge in accordance with this
subsection.
(b) The department must adjust the surcharge by an amount that the
department estimates will cause the amount of funds deposited into the
forest and fish support account for the state fiscal year that begins
July 1st and that includes the beginning of the federal fiscal year for
which the federal appropriation is made, to be reduced by twice the
amount of the federal appropriation for participation in forest and
fish report-related activities by federally recognized Indian tribes
located within the geographical boundaries of the state of Washington.
(c) Any adjustment in the surcharge takes effect at the beginning
of a calendar month that is at least thirty days after the date that
the office of financial management makes the certification under
subsection (5) of this section.
(d) The surcharge is imposed again at the rate provided in
subsection (1) of this section on the first day of the following state
fiscal year unless the surcharge is suspended under subsection (3) of
this section or adjusted for that fiscal year under this subsection.
(e) Adjustments of the amount of the surcharge by the department
are final and may not be used to challenge the validity of the
surcharge imposed under this section.
(f) The department must provide timely notice to affected taxpayers
of the suspension of the surcharge or an adjustment of the surcharge.
(5) The office of financial management must make the certification
to the department as to the status of federal appropriations for tribal
participation in forest and fish report-related activities.
Sec. 218 RCW 82.04.270 and 2004 c 24 s 5 are each amended to read
as follows:
Upon every person engaging within this state in the business of
making sales at wholesale, except persons taxable ((as wholesalers))
under other provisions of this chapter on the business of making sales
at wholesale; as to such persons the amount of tax with respect to such
business ((shall be)) is equal to the gross proceeds of sales of such
business multiplied by the rate of 0.484 percent.
Sec. 219 RCW 82.04.29001 and 2003 c 168 s 602 are each amended to
read as follows:
(1) The creation and distribution of custom software is a service
taxable under RCW 82.04.290(((2))). Duplication of the software for
the same person, or by the same person for its own use, does not change
the character of the software.
(2) The customization of prewritten computer software is a service
taxable under RCW 82.04.290(((2))).
Sec. 220 RCW 82.04.29002 and 2010 1st sp.s. c 23 s 1101 are each
amended to read as follows:
(1) Beginning May 1, 2010, through June 30, 2013, an additional
rate of tax of 0.30 percent is added to the rate provided for in RCW
((82.04.255,)) 82.04.285((,)) and 82.04.290(((2)(a))).
(2)(((a))) The additional rate in subsection (1) of this section
does not apply to:
(a) Persons engaging within this state in business as a hospital.
"Hospital" has the meaning provided in chapter 70.41 RCW but also
includes any hospital that comes within the scope of chapter 71.12 RCW
if the hospital is also licensed under chapter 70.41 RCW((.));
(b) ((The additional rate in subsection (1) of this section does
not apply to)) Amounts received from performing scientific research and
development services including but not limited to aerospace product
development, as defined in RCW 82.04.4461, performed for others, and
research and development in the physical, engineering, and life
sciences (such as agriculture, bacteriological, biotechnology,
chemical, life sciences, and physical science research and development
laboratories or services);
(c) Amounts received by nonprofit corporations or nonprofit
associations engaging in the business of conducting research and
development for compensation;
(d) Amounts received from inspecting, testing, labeling, and
storing canned salmon owned by another person;
(e) Amounts received from providing eligible chemical dependency
treatment services;
(f) Amounts received from providing qualifying travel or
transportation-related activities;
(g) Amounts received from operating a qualifying warehouse;
(h) Amounts received from providing international investment
management services;
(i) Amounts received by boarding homes licensed under chapter 18.20
RCW for providing boarding home services as defined in RCW 82.04.290;
(j) Amounts received from providing child day care;
(k) Amounts received from providing insurance services as defined
in RCW 82.04.290; and
(l) Gross income from royalties.
(3) The definitions in this subsection apply throughout this
section unless the context clearly requires otherwise.
(a) "Eligible chemical dependency treatment services" means
intensive inpatient or recovery house residential treatment services
for chemical dependency, certified by the department of social and
health services, for which payment from the United States or any of its
instrumentalities or from the state of Washington or any of its
municipal corporations or political subdivisions is received as
compensation for or to support those services.
(b) "Qualifying travel or transportation-related activities" means
engaging within this state in one or more of the following businesses:
Travel agent, tour operator, international steamship agent,
international customs house broker, international freight forwarder,
vessel or cargo charter broker in foreign commerce, or international
air cargo agent.
(c) "Qualifying warehouse" means a cold storage warehouse or
storage warehouse. The term does not include cold storage lockers.
(d) "Gross income from royalties" means compensation for the use of
intangible property, including charges in the nature of royalties,
regardless of where the intangible property will be used. For purposes
of this subsection, "intangible property" includes copyrights, patents,
licenses, franchises, trademarks, trade names, and similar items.
"Gross income from royalties" does not include compensation for any
natural resource, the licensing of prewritten computer software to the
end user, or the licensing of digital goods, digital codes, or digital
automated services to the end user as defined in RCW 82.04.190(11).
(e) "Child day care" means providing child care for continuous
periods of less than twenty-four hours.
Sec. 221 RCW 82.04.293 and 1997 c 7 s 3 are each amended to read
as follows:
For purposes of ((RCW 82.04.290)) this chapter:
(1) A person is engaged in the business of providing international
investment management services, if:
(a) Such person is engaged primarily in the business of providing
investment management services; and
(b) At least ten percent of the gross income of such person is
derived from providing investment management services to any of the
following: (i) Persons or collective investment funds residing outside
the United States; or (ii) persons or collective investment funds with
at least ten percent of their investments located outside the United
States.
(2) "Investment management services" means investment research,
investment consulting, portfolio management, fund administration, fund
distribution, investment transactions, or related investment services.
(3) "Collective investment fund" includes:
(a) A mutual fund or other regulated investment company, as defined
in section 851(a) of the internal revenue code of 1986, as amended;
(b) An "investment company," as that term is used in section 3(a)
of the investment company act of 1940, as well as any entity that would
be an investment company for this purpose but for the exemptions
contained in section 3(c)(1) or (11);
(c) An "employee benefit plan," which includes any plan, trust,
commingled employee benefit trust, or custodial arrangement that is
subject to the employee retirement income security act of 1974, as
amended, 29 U.S.C. Sec. 1001 et seq., or that is described in sections
125, 401, 403, 408, 457, and 501(c)(9) and (17) through (23) of the
internal revenue code of 1986, as amended, or a similar plan maintained
by a state or local government, or a plan, trust, or custodial
arrangement established to self-insure benefits required by federal,
state, or local law;
(d) A fund maintained by a tax-exempt organization, as defined in
section 501(c)(3) of the internal revenue code of 1986, as amended, for
operating, quasi-endowment, or endowment purposes;
(e) Funds that are established for the benefit of such tax-exempt
organizations, such as charitable remainder trusts, charitable lead
trusts, charitable annuity trusts, or other similar trusts; or
(f) Collective investment funds similar to those described in (a)
through (e) of this subsection created under the laws of a foreign
jurisdiction.
(4) Investments are located outside the United States if the
underlying assets in which the investment constitutes a beneficial
interest reside or are created, issued or held outside the United
States.
Sec. 222 RCW 82.04.297 and 2010 c 111 s 303 are each amended to
read as follows:
(1) The provision of internet access is subject to tax under RCW
82.04.290(((2))).
(2)(a) Except as provided in (b) of this subsection, "internet" and
"internet access" have the same meaning as those terms are defined in
the federal internet tax freedom act, Title 47 U.S.C. Sec. 151 note, as
existing on July 1, 2009.
(b) "Internet access" does not include telecommunications service
purchased, used, or sold by a person that provides a service that
enables users to connect to the internet to access content,
information, or other services offered over the internet, to the extent
such telecommunications service is purchased, used, or sold: (i) To
provide such service; or (ii) to otherwise enable users to access
content, information, or other services offered over the internet.
(3) Unless the context clearly requires otherwise, the definitions
in this section apply throughout this chapter.
Sec. 223 RCW 82.04.298 and 2011 c 2 s 204 are each amended to
read as follows:
(1) The amount of tax with respect to a qualified grocery
distribution cooperative's sales of groceries or related goods for
resale, excluding ((items subject to tax under RCW 82.04.260(4)))
qualifying meat products, to customer-owners of the grocery
distribution cooperative is equal to the gross proceeds of sales of the
grocery distribution cooperative multiplied by the rate of one and
one-half percent.
(2) A qualified grocery distribution cooperative is allowed a
deduction from the gross proceeds of sales of groceries or related
goods for resale, excluding ((items subject to tax under RCW
82.04.260(4))) qualifying meat products, to customer-owners of the
grocery distribution cooperative that is equal to the portion of the
gross proceeds of sales for resale that represents the actual cost of
the merchandise sold by the grocery distribution cooperative to
customer-owners.
(3) The definitions in this subsection apply throughout this
section unless the context clearly requires otherwise.
(a) "Grocery distribution cooperative" means an entity that sells
groceries and related items to customer-owners of the grocery
distribution cooperative and has customer-owners, in the aggregate, who
own a majority of the outstanding ownership interests of the grocery
distribution cooperative or of the entity controlling the grocery
distribution cooperative. "Grocery distribution cooperative" includes
an entity that controls a grocery distribution cooperative.
(b) "Qualified grocery distribution cooperative" means:
(i) A grocery distribution cooperative that has been determined by
a court of record of the state of Washington to be not engaged in
wholesaling or making sales at wholesale, within the meaning of RCW
82.04.270 or any similar provision of a municipal ordinance that
imposes a tax on gross receipts, gross proceeds of sales, or gross
income, with respect to purchases made by customer-owners, and
subsequently changes its form of doing business to make sales at
wholesale of groceries or related items to its customer-owners; or
(ii) A grocery distribution cooperative that has acquired
substantially all of the assets of a grocery distribution cooperative
described in (b)(i) of this subsection.
(c) "Customer-owner" means a person who has an ownership interest
in a grocery distribution cooperative and purchases groceries and
related items at wholesale from that grocery distribution cooperative.
(d) "Controlling" means holding fifty percent or more of the voting
interests of an entity and having at least equal power to direct or
cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract, or
otherwise.
(e) "Qualifying meat product" means: (i) With respect to any
person, a perishable meat product; and (ii) any meat product,
perishable or not, that is the result of the seller taking an animal or
a perishable meat product, processing it, and selling the resulting
meat product at wholesale, even if meat is only a component of the
finished product.
Sec. 224 RCW 82.04.334 and 2010 1st sp.s. c 23 s 512 are each
amended to read as follows:
This chapter does not apply to any sale of standing timber excluded
from the definition of "sale" in RCW 82.45.010(3). The definitions in
RCW 82.04.260(((11))) (4) apply to this section.
Sec. 225 RCW 82.04.360 and 2010 1st sp.s. c 23 s 702 are each
amended to read as follows:
(1) This chapter does not apply to any person in respect to his or
her employment in the capacity of an employee or servant as
distinguished from that of an independent contractor. For the purposes
of this section, the definition of employee includes those persons that
are defined in section 3121(d)(3)(B) of the federal internal revenue
code of 1986, as amended through January 1, 1991.
(2) Until July 1, 2010, this chapter does not apply to amounts
received by an individual from a corporation as compensation for
serving as a member of that corporation's board of directors.
Beginning on July 1, 2010, such amounts are taxable under RCW
82.04.290(((2))).
(3) A booth renter is an independent contractor for purposes of
this chapter. For purposes of this section, "booth renter" means any
person who:
(a) Performs cosmetology, barbering, esthetics, or manicuring
services for which a license is required under chapter 18.16 RCW; and
(b) Pays a fee for the use of salon or shop facilities and receives
no compensation or other consideration from the owner of the salon or
shop for the services performed.
Sec. 226 RCW 82.04.440 and 2011 c 2 s 205 are each amended to
read as follows:
(1) Every person engaged in activities that are subject to tax
under two or more provisions of RCW 82.04.230 through 82.04.298,
inclusive, is taxable under each provision applicable to those
activities.
(2) Persons taxable under RCW ((82.04.2909(2),)) 82.04.250,
82.04.270, ((82.04.294(2),)) or 82.04.260 (((1)(b), (c), or (d), (4),
(11), or (12))) (3) or (4)(c) with respect to selling products in this
state, including those persons who are also taxable under RCW
82.04.261, are allowed a credit against those taxes for any (a)
manufacturing taxes paid with respect to the manufacturing of products
so sold in this state, and/or (b) extracting taxes paid with respect to
the extracting of products so sold in this state or ingredients of
products so sold in this state. Extracting taxes taken as credit under
subsection (3) of this section may also be taken under this subsection,
if otherwise allowable under this subsection. The amount of the credit
may not exceed the tax liability arising under this chapter with
respect to the sale of those products.
(3) Persons taxable as manufacturers under RCW 82.04.240 or
82.04.260 (((1)(b) or (12))) (4), including those persons who are also
taxable under RCW 82.04.261, are allowed a credit against those taxes
for any extracting taxes paid with respect to extracting the
ingredients of the products so manufactured in this state. The amount
of the credit may not exceed the tax liability arising under this
chapter with respect to the manufacturing of those products.
(4) Persons taxable under RCW 82.04.230, 82.04.240,
((82.04.2909(1), 82.04.294(1), 82.04.2404,)) or 82.04.260 (((1), (2),
(4), (11), or (12))) (3) or (4), including those persons who are also
taxable under RCW 82.04.261, with respect to extracting or
manufacturing products in this state are allowed a credit against those
taxes for any (i) gross receipts taxes paid to another state with
respect to the sales of the products so extracted or manufactured in
this state, (ii) manufacturing taxes paid with respect to the
manufacturing of products using ingredients so extracted in this state,
or (iii) manufacturing taxes paid with respect to manufacturing
activities completed in another state for products so manufactured in
this state. The amount of the credit may not exceed the tax liability
arising under this chapter with respect to the extraction or
manufacturing of those products.
(5) For the purpose of this section:
(a) "Gross receipts tax" means a tax:
(i) Which is imposed on or measured by the gross volume of
business, in terms of gross receipts or in other terms, and in the
determination of which the deductions allowed would not constitute the
tax an income tax or value added tax; and
(ii) Which is also not, pursuant to law or custom, separately
stated from the sales price.
(b) "State" means (i) the state of Washington, (ii) a state of the
United States other than Washington, or any political subdivision of
such other state, (iii) the District of Columbia, and (iv) any foreign
country or political subdivision thereof.
(c) "Manufacturing tax" means a gross receipts tax imposed on the
act or privilege of engaging in business as a manufacturer, and
includes (i) the taxes imposed on persons who are engaged in business
as a manufacturer in RCW 82.04.240((, 82.04.2404, 82.04.2909(1),)) and
82.04.260 (((1), (2), (4), (11), and (12), and 82.04.294(1))) (3) or
(4); (ii) the tax imposed under RCW 82.04.261 on persons who are
engaged in business as a manufacturer; and (iii) similar gross receipts
taxes paid to other states.
(d) "Extracting tax" means a gross receipts tax imposed on the act
or privilege of engaging in business as an extractor, and includes (i)
the tax imposed on extractors in RCW 82.04.230 and 82.04.260(((12)))
(4); (ii) the tax imposed under RCW 82.04.261 on persons who are
engaged in business as an extractor; and (iii) similar gross receipts
taxes paid to other states.
(e) "Business", "manufacturer", "extractor", and other terms used
in this section have the meanings given in RCW 82.04.020 through
((82.04.212 [82.04.217])) 82.04.217, notwithstanding the use of those
terms in the context of describing taxes imposed by other states.
Sec. 227 RCW 82.04.4451 and 2010 1st sp.s. c 23 s 1102 are each
amended to read as follows:
(1) In computing the tax imposed under this chapter, a credit is
allowed against the amount of tax otherwise due under this chapter, as
provided in this section. Except for taxpayers that report at least
fifty percent of their taxable amount under RCW ((82.04.255,))
82.04.290(((2)(a),)) and 82.04.285, the maximum credit for a taxpayer
for a reporting period is thirty-five dollars multiplied by the number
of months in the reporting period, as determined under RCW 82.32.045.
For a taxpayer that reports at least fifty percent of its taxable
amount under RCW ((82.04.255,)) 82.04.290(((2)(a),)) and 82.04.285, the
maximum credit for a reporting period is seventy dollars multiplied by
the number of months in the reporting period, as determined under RCW
82.32.045.
(2) When the amount of tax otherwise due under this chapter is
equal to or less than the maximum credit, a credit is allowed equal to
the amount of tax otherwise due under this chapter.
(3) When the amount of tax otherwise due under this chapter exceeds
the maximum credit, a reduced credit is allowed equal to twice the
maximum credit, minus the tax otherwise due under this chapter, but not
less than zero.
(4) The department may prepare a tax credit table consisting of tax
ranges using increments of no more than five dollars and a
corresponding tax credit to be applied to those tax ranges. The table
((shall)) must be prepared in such a manner that no taxpayer will owe
a greater amount of tax by using the table than would be owed by
performing the calculation under subsections (1) through (3) of this
section. A table prepared by the department under this subsection must
be used by all taxpayers in taking the credit provided in this section.
Sec. 228 RCW 82.04.44525 and 2009 c 535 s 1104 are each amended
to read as follows:
(1) Subject to the limits in this section, an eligible person is
allowed a credit against the tax due under this chapter. The credit is
based on qualified employment positions in eligible areas. The credit
is available to persons who are engaged in international services as
defined in this section. In order to receive the credit, the
international service activities must take place at a business within
the eligible area.
(2)(a) The credit ((shall)) equals three thousand dollars for each
qualified employment position created after July 1, 1998, in an
eligible area. A credit is earned for the calendar year the person is
hired to fill the position, plus the four subsequent consecutive years,
if the position is maintained for those four years.
(b) Credit may not be taken for hiring of persons into positions
that exist on July 1, 1998. Credit is authorized for new employees
hired for new positions created after July 1, 1998. New 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.
(c) When a position is newly created, if it is filled before July
1st, this position is eligible for the full yearly credit. If it is
filled after June 30th, this position is eligible for half of the
credit.
(d) Credit may be accrued and carried over until it is used. No
refunds may be granted for credits under this section.
(3) For the purposes of this section:
(a) "Eligible area" means: (i) A community empowerment zone under
RCW 43.31C.020; or (ii) a contiguous group of census tracts that meets
the unemployment and poverty criteria of RCW 43.31C.030 and is
designated under subsection (4) of this section;
(b) "Eligible person" means a person, as defined in RCW 82.04.030,
who in an eligible area at a specific location is engaged in the
business of providing international services;
(c)(i) "International services" means the provision of a service,
as defined under (c)(iii) of this subsection, that is subject to tax
under RCW 82.04.290 (((2) or (3))), and either:
(A) Is for a person domiciled outside the United States; or
(B) The service itself is for use primarily outside of the United
States.
(ii) "International services" excludes ((any service taxable under
RCW 82.04.290(1))) international investment management services.
(iii) Eligible services are: Computer; data processing;
information; legal; accounting and tax preparation; engineering;
architectural; business consulting; business management; public
relations and advertising; surveying; geological consulting; real
estate appraisal; or financial services. For the purposes of this
section these services mean the following:
(A) "Computer services" are services such as computer programming,
custom software modification, customization of canned software, custom
software installation, custom software maintenance, custom software
repair, training in the use of software, computer systems design, and
custom software update services;
(B) "Data processing services" are services such as word
processing, data entry, data retrieval, data search, information
compilation, payroll processing, business accounts processing, data
production, and other computerized data and information storage or
manipulation. "Data processing services" also includes the use of a
computer or computer time for data processing whether the processing is
performed by the provider of the computer or by the purchaser or other
beneficiary of the service;
(C) "Information services" are services such as electronic data
retrieval or research that entails furnishing financial or legal
information, data or research, internet access as defined in RCW
82.04.297, general or specialized news, or current information;
(D) "Legal services" are services such as representation by an
attorney, or other person when permitted, in an administrative or legal
proceeding, legal drafting, paralegal services, legal research
services, and court reporting services, arbitration, and mediation
services;
(E) "Accounting and tax preparation services" are services such as
accounting, auditing, actuarial, bookkeeping, or tax preparation
services;
(F) "Engineering services" are services such as civil, electrical,
mechanical, petroleum, marine, nuclear, and design engineering, machine
designing, machine tool designing, and sewage disposal system designing
services;
(G) "Architectural services" are services such as structural or
landscape design or architecture, interior design, building design,
building program management, and space planning services;
(H) "Business consulting services" are services such as primarily
providing operating counsel, advice, or assistance to the management or
owner of any business, private, nonprofit, or public organization,
including but not limited to those in the following areas:
Administrative management consulting; general management consulting;
human resource consulting or training; management engineering
consulting; management information systems consulting; manufacturing
management consulting; marketing consulting; operations research
consulting; personnel management consulting; physical distribution
consulting; site location consulting; economic consulting; motel,
hotel, and resort consulting; restaurant consulting; government affairs
consulting; and lobbying;
(I) "Business management services" are services such as
administrative management, business management, and office management.
"Business management services" does not include property management or
property leasing, motel, hotel, and resort management, or automobile
parking management;
(J) "Public relations and advertising services" are services such
as layout, art direction, graphic design, copy writing, mechanical
preparation, opinion research, marketing research, marketing, or
production supervision;
(K) "Surveying services" are services such as land surveying;
(L) "Geological consulting services" are services rendered for the
oil, gas, and mining industry and other earth resource industries, and
other services such as soil testing;
(M) "Real estate appraisal services" are services such as market
appraisal and other real estate valuation; and
(N) "Financial services" are services such as banking, loan,
security, investment management, investment advisory, mortgage
servicing, contract collection, and finance leasing services, engaged
in by financial businesses, or businesses similar to or in competition
with financial businesses; and
(d) "Qualified employment position" means a permanent full-time
position to provide international services. 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.
(4) By ordinance, the legislative authority of a city, or
legislative authorities of contiguous cities by ordinance of each
city's legislative authority, with population greater than eighty
thousand, located in a county containing no community empowerment zones
as designated under RCW 43.31C.020, may designate a contiguous group of
census tracts within the city or cities as an eligible area under this
section. Each of the census tracts must meet the unemployment and
poverty criteria of RCW 43.31C.030. Upon making the designation, the
city or cities ((shall)) must transmit to the department of revenue a
certification letter and a map, each explicitly describing the
boundaries of the census tract. This designation must be made by
December 31, 1998.
(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:
(a) Employment records for the previous six years;
(b) Information relating to description of international service
activity engaged in at the eligible location by the person; and
(c) Information relating to customers of international service
activity engaged in at that location by the person.
(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 used ((shall be)) is immediately due. The
department ((shall)) must assess interest, but not penalties, on the
credited taxes for which the person is not eligible. The interest
((shall be)) is assessed at the rate provided for delinquent excise
taxes under chapter 82.32 RCW, ((shall be)) is assessed retroactively
to the date the tax credit was taken, and ((shall)) accrues until the
taxes for which a credit has been used are repaid.
(7) The employment security department ((shall)) must provide to
the department of revenue such information needed by the department of
revenue to verify eligibility under this section.
Sec. 229 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))) (4), 82.04.260(((10))) (3)(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))) (4), 82.04.260(((10))) (3)(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))) (3)(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))) (3)(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))) (4), 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))) (3) (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))) (3) 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.
(6) This section expires July 1, ((2024)) 2025.
Sec. 230 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 with the department under RCW 82.32.585.
(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)) 2012.
Sec. 231 RCW 82.04.460 and 2011 c 174 s 203 are each amended to
read as follows:
(1) Except as otherwise provided in this section, any person
earning apportionable income taxable under this chapter and also
taxable in another state must, for the purpose of computing tax
liability under this chapter, apportion to this state, in accordance
with RCW 82.04.462, that portion of the person's apportionable income
derived from business activities performed within this state.
(2) The department must by rule provide a method of apportioning
the apportionable income of financial institutions, where such
apportionable income is taxable under RCW 82.04.290. The rule adopted
by the department must, to the extent feasible, be consistent with the
multistate tax commission's recommended formula for the apportionment
and allocation of net income of financial institutions as existing on
June 1, 2010, or such subsequent date as may be provided by the
department by rule, consistent with the purposes of this section,
except that:
(a) The department's rule must provide for a single factor
apportionment method based on the receipts factor; and
(b) The definition of "financial institution" contained in appendix
A to the multistate tax commission's recommended formula for the
apportionment and allocation of net income of financial institutions is
advisory only.
(3) The department may by rule provide a method or methods of
apportioning or allocating gross income derived from sales of
telecommunications service and competitive telephone service taxed
under this chapter, if the gross proceeds of sales subject to tax under
this chapter do not fairly represent the extent of the taxpayer's
income attributable to this state. The rule must provide for an
equitable and constitutionally permissible division of the tax base.
(4) For purposes of this section, the following definitions apply
unless the context clearly requires otherwise:
(a) "Apportionable income" means gross income of the business
generated from engaging in apportionable activities, including income
received from apportionable activities performed outside this state if
the income would be taxable under this chapter if received from
activities in this state, less the exemptions and deductions allowable
under this chapter. For purposes of this subsection, "apportionable
activities" means only those activities taxed under:
(i) ((RCW 82.04.255;)) RCW 82.04.260 ((
(ii)(3), (4), (5), (6), (7), (8), (9), and
(12))) (1) and (2);
(((iii) RCW 82.04.280 (1)(e);)) RCW 82.04.285;
(iv)
(((v))) (ii) RCW 82.04.286;
(((vi))) (iii) RCW 82.04.290;
(((vii) RCW 82.04.2907;)) (iv) RCW 82.04.263, but only to the extent of any activity
that would be taxable under ((
(viii) RCW 82.04.2908;
(ix)any of the provisions enumerated under
(a)(i) through (viii) of this subsection (4))) RCW 82.04.290 if the tax
classification in RCW 82.04.263 did not exist; and
(((x))) (v) RCW 82.04.260(((13))) (5) and 82.04.280(1)(a), but only
with respect to advertising.
(b)(i) "Taxable in another state" means that the taxpayer is
subject to a business activities tax by another state on its income
received from engaging in apportionable activities; or the taxpayer is
not subject to a business activities tax by another state on its income
received from engaging in apportionable activities, but any other state
has jurisdiction to subject the taxpayer to a business activities tax
on such income under the substantial nexus standards in RCW
82.04.067(1).
(ii) For purposes of this subsection (4)(b), "business activities
tax" and "state" have the same meaning as in RCW 82.04.462.
Sec. 232 RCW 82.04.540 and 2006 c 301 s 1 are each amended to
read as follows:
(1) The provision of professional employer services by a
professional employer organization is taxable under RCW
82.04.290(((2))).
(2) A professional employer organization is allowed a deduction
from the gross income of the business derived from performing
professional employer services that is equal to the portion of the fee
charged to a client that represents the actual cost of wages and
salaries, benefits, workers' compensation, payroll taxes, withholding,
or other assessments paid to or on behalf of a covered employee by the
professional employer organization under a professional employer
agreement.
(3) For the purposes of this section, the following definitions
apply:
(a) "Client" means any person who enters into a professional
employer agreement with a professional employer organization. For
purposes of this subsection (3)(a), "person" has the same meaning as
"buyer" in RCW 82.08.010.
(b) "Coemployer" means either a professional employer organization
or a client.
(c) "Coemployment relationship" means a relationship which is
intended to be an ongoing relationship rather than a temporary or
project-specific one, wherein the rights, duties, and obligations of an
employer which arise out of an employment relationship have been
allocated between coemployers pursuant to a professional employer
agreement and applicable state law. In such a coemployment
relationship:
(i) The professional employer organization is entitled to enforce
only such employer rights and is subject to only those obligations
specifically allocated to the professional employer organization by the
professional employer agreement or applicable state law;
(ii) The client is entitled to enforce those rights and obligated
to provide and perform those employer obligations allocated to such
client by the professional employer agreement and applicable state law;
and
(iii) The client is entitled to enforce any right and obligated to
perform any obligation of an employer not specifically allocated to the
professional employer organization by the professional employer
agreement or applicable state law.
(d) "Covered employee" means an individual having a coemployment
relationship with a professional employer organization and a client who
meets all of the following criteria: (i) The individual has received
written notice of coemployment with the professional employer
organization, and (ii) the individual's coemployment relationship is
pursuant to a professional employer agreement. Individuals who are
officers, directors, shareholders, partners, and managers of the client
are covered employees to the extent the professional employer
organization and the client have expressly agreed in the professional
employer agreement that such individuals would be covered employees and
provided such individuals meet the criteria of this subsection and act
as operational managers or perform day-to-day operational services for
the client.
(e) "Professional employer agreement" means a written contract by
and between a client and a professional employer organization that
provides:
(i) For the coemployment of covered employees; and
(ii) For the allocation of employer rights and obligations between
the client and the professional employer organization with respect to
the covered employees.
(f) "Professional employer organization" means any person engaged
in the business of providing professional employer services. The
following ((shall)) are not ((be)) deemed to be professional employer
organizations or the providing of professional employer services for
purposes of this section:
(i) Arrangements wherein a person, whose principal business
activity is not entering into professional employer arrangements and
which does not hold itself out as a professional employer organization,
shares employees with a commonly owned company within the meaning of
((section)) 26 U.S.C. Sec. 414(b) and (c) of the internal revenue code
of 1986, as amended;
(ii) Independent contractor arrangements by which a person assumes
responsibility for the product produced or service performed by such
person or his or her agents and retains and exercises primary direction
and control over the work performed by the individuals whose services
are supplied under such arrangements; or
(iii) Providing staffing services.
(g) "Professional employer services" means the service of entering
into a coemployment relationship with a client in which all or a
majority of the employees providing services to a client or to a
division or work unit of a client are covered employees.
(h) "Staffing services" means services consisting of a person:
(i) Recruiting and hiring its own employees;
(ii) Finding other organizations that need the services of those
employees;
(iii) Assigning those employees on a temporary basis to perform
work at or services for the other organizations to support or
supplement the other organizations' workforces, or to provide
assistance in special work situations such as, but not limited to,
employee absences, skill shortages, seasonal workloads, or to perform
special assignments or projects, all under the direction and
supervision of the customer; and
(iv) Customarily attempting to reassign the employees to other
organizations when they finish each assignment.
Sec. 233 RCW 82.04.620 and 2007 c 447 s 1 are each amended to
read as follows:
In computing tax there may be deducted from the measure of tax
imposed by RCW 82.04.290(((2))) amounts received by physicians or
clinics for drugs for infusion or injection by licensed physicians or
their agents for human use pursuant to a prescription, but only if the
amounts: (1) Are separately stated on invoices or other billing
statements; (2) do not exceed the then current federal rate; and (3)
are covered or required under a health care service program subsidized
by the federal or state government. The federal rate means the rate at
or below which the federal government or its agents reimburse providers
for prescription drugs administered to patients as provided for in the
medicare, part B, drugs average sales price information resource as
published by the United States department of health and human services,
or any successor index thereto.
Sec. 234 RCW 82.08.806 and 2011 c 174 s 204 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 does not apply to sales, to a
printer or publisher, of computer equipment, including repair parts and
replacement parts for such equipment, when the computer equipment is
used primarily in the printing or publishing of any printed material,
or to sales of or charges made for labor and services rendered in
respect to installing, repairing, cleaning, altering, or improving the
computer equipment. This exemption applies only to computer equipment
not otherwise exempt under RCW 82.08.02565.
(2) A person taking the exemption under this section must keep
records necessary for the department to verify eligibility under this
section. This exemption is available only when the purchaser 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) The definitions in this subsection (3) apply throughout this
section, unless the context clearly requires otherwise.
(a) "Computer" has the same meaning as in RCW 82.04.215.
(b) "Computer equipment" means a computer and the associated
physical components that constitute a computer system, including
monitors, keyboards, printers, modems, scanners, pointing devices, and
other computer peripheral equipment, cables, servers, and routers.
"Computer equipment" also includes digital cameras and computer
software.
(c) "Computer software" has the same meaning as in RCW 82.04.215.
(d) "Primarily" means greater than fifty percent as measured by
time.
(e) "Printer or publisher" means a person, as defined in RCW
82.04.030, who is subject to tax under RCW 82.04.260(((13))) (5) or
82.04.280(1)(a).
(4) "Computer equipment" does not include computer equipment that
is used primarily for administrative purposes including but not limited
to payroll processing, accounting, customer service, telemarketing, and
collection. If computer equipment is used simultaneously for
administrative and nonadministrative purposes, the administrative use
must be disregarded during the period of simultaneous use for purposes
of determining whether the computer equipment is used primarily for
administrative purposes.
Sec. 235 RCW 82.16.100 and 2001 c 320 s 8 are each amended to
read as follows:
The business of collection, receipt, transfer, including
transportation between any locations, storage, or disposal of solid
waste is not subject to this chapter. Any such business activities are
subject to taxation under the classification in RCW 82.04.290(((2))).
"Solid waste" for purposes of this section is defined in RCW 82.18.010.
Sec. 236 RCW 82.32.045 and 2010 1st sp.s. c 23 s 1103 are each
amended to read as follows:
(1) Except as otherwise provided in this chapter, payments of the
taxes imposed under chapters 82.04, 82.08, 82.12, 82.14, and 82.16 RCW,
along with reports and returns on forms prescribed by the department,
are due monthly within twenty-five days after the end of the month in
which the taxable activities occur.
(2) The department of revenue may relieve any taxpayer or class of
taxpayers from the obligation of remitting monthly and may require the
return to cover other longer reporting periods, but in no event may
returns be filed for a period greater than one year. For these
taxpayers, tax payments are due on or before the last day of the month
next succeeding the end of the period covered by the return.
(3) The department of revenue may also require verified annual
returns from any taxpayer, setting forth such additional information as
it may deem necessary to correctly determine tax liability.
(4) Notwithstanding subsections (1) and (2) of this section, the
department may relieve any person of the requirement to file returns if
the following conditions are met:
(a) The person's value of products, gross proceeds of sales, or
gross income of the business, from all business activities taxable
under chapter 82.04 RCW, is less than:
(i) Twenty-eight thousand dollars per year; or
(ii) Forty-six thousand six hundred sixty-seven dollars per year
for persons generating at least fifty percent of their taxable amount
from activities taxable under RCW ((82.04.255,)) 82.04.290(((2)(a),))
and 82.04.285;
(b) The person's gross income of the business from all activities
taxable under chapter 82.16 RCW is less than twenty-four thousand
dollars per year; and
(c) The person is not required to collect or pay to the department
of revenue any other tax or fee which the department is authorized to
collect.
Sec. 237 RCW 82.32.533 and 2010 c 111 s 801 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section, no person
may be held liable for the failure to collect or pay state and local
sales and use taxes accrued before July 26, 2009, on the sale or use of
digital goods or of services defined as a retail sale in RCW
82.04.050(2)(a) and rendered in respect to digital goods.
(2) Subsection (1) of this section does not relieve any person from
liability for state and local sales taxes that the person collected
from buyers but did not remit to the department of revenue.
(3) Nothing in this section may be construed as authorizing the
refund of state and local sales and use taxes properly paid on the sale
or use, before July 26, 2009, of digital goods or of services defined
as a retail sale in RCW 82.04.050(2)(a) and rendered in respect to
digital goods.
(4) A person is not entitled to a credit or refund of any business
and occupation tax paid in excess of that properly due as a result of
the person paying tax on its income earned from the sale of eligible
digital products and services at the tax rate provided in RCW
82.04.290(((2)(a))) rather than the tax rate provided in RCW
82.04.250(((1))), unless the person requesting the credit or refund has
paid the proper amount of state and local sales taxes due on the sales
of the eligible digital products and services that generated the income
in respect to which the business and occupation tax credit or refund is
sought. For purposes of this subsection, "eligible digital products
and services" means: (a) Digital goods; and (b) services defined as a
retail sale in RCW 82.04.050(2)(a) and rendered in respect to digital
goods.
(5) For purposes of this section, "digital goods" has the same
meaning as in RCW 82.04.192.
Sec. 238 RCW 82.45.195 and 2010 1st sp.s. c 23 s 518 are each
amended to read as follows:
A sale of standing timber is exempt from tax under this chapter if
the gross income from such sale is taxable under RCW 82.04.260(((11)))
(4)(d).
NEW SECTION. Sec. 301 (1) Except for section 208 of this act,
this act takes effect January 1, 2014.
(2) Section 208 of this act takes effect July 1, 2015.
NEW SECTION. Sec. 302 Section 207 of this act expires July 1,
2015.
NEW SECTION. Sec. 303 The provisions of this act are to be
liberally construed to effectuate the intent, policies, and purpose of
this act to reduce the complexity of state and local business and
occupation taxes and to make it easier for businesses to meet their
local licensing and business and occupation tax filing obligations.
NEW SECTION. Sec. 304 If any provision of this act or its
application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other
persons or circumstances is not affected.