AN ACT Relating to simplifying business and occupation tax administration; amending RCW 82.32.045; adding new sections to chapter 82.04 RCW; creating new sections; repealing RCW 82.04.4451; and providing an effective date.

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

(2) Therefore, this act reforms the state's business and occupation tax to provide a stable, ongoing source of funding to support educational programs, while simultaneously easing the tax burden on the state's smallest businesses. This revenue will have a direct and positive impact on the social and economic success of the state by supporting a more effective educational system, one that engages students in the advanced fields and industries critical to the modern economy.

Sec. 2.  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 and pay any taxes otherwise due under chapters 82.04 and 82.16 RCW 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((:

(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)) two hundred thousand dollars per year;

(b) The person's gross income of the business from all activities taxable under chapter 82.16 RCW is less than twenty-four thousand dollars per year; and

(c) The person is not required to collect or pay to the department of revenue any other tax or fee which the department is authorized to collect.

NEW SECTION.  Sec. 3.  A new section is added to chapter 82.04 RCW to read as follows:

(1) Beginning January 1, 2018, upon every person engaging within the state in business activities that are subject to tax under any other section of this chapter; as to such persons, an additional tax is imposed. The amount of the additional tax imposed under this section with respect to such business is equal to the tax payable under all other sections of this chapter multiplied by 14.7 percent.

(2) The additional tax under this section is due in the form and manner determined by the department.

NEW SECTION.  Sec. 4.  A new section is added to chapter 82.04 RCW to read as follows:

(1) In computing the tax imposed under this chapter, there may be deducted from the measure of tax the maximum sum of sixteen thousand six hundred sixty-seven dollars multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.

(2) When the measure of tax is equal to or less than the deduction allowed under subsection (1) of this section, no tax is due. The deduction cannot be carried forward or backward to subsequent or prior reporting periods. No refunds are allowed for the deduction under this section.

(3) For taxpayers subject to taxes imposed under multiple provisions of this chapter, this deduction must be applied to the measure of tax in order of the business activities taxed at the highest to lowest rates.

(4) This deduction is in addition to any other applicable deductions or exemptions allowed for the taxes due under this chapter and must be claimed after all other deductions are claimed.

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