Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Finance Committee |
SB 5596
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Extending the expiration date on the health sciences and services authority sales and use tax authorization.
Sponsors: Senators Holy and Billig.
Brief Summary of Bill |
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Hearing Date: 3/26/19
Staff: Tracey O'Brien (786-7152).
Background:
Retail Sales and Use Tax.
Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services. A retail sale is a sale to the final consumer or end user of the property, digital product, or service. If retail sales taxes were not collected when the user acquired the property, digital products, or services, then use tax applies to the value of property, digital product, or service when used in this state. The state, all counties, and all cities levy retail sales and use taxes. The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 0.5 percent to 3.9 percent, depending on the location.
Health Sciences and Services Authority
In 2007 legislation was enacted that enabled a city, town, or county (local government) to establish by ordinance or resolution a Health Sciences and Services Authority (Authority) to promote bioscience-based economic development and advance new therapies and procedures to combat disease and promote public health.
An Authority has all the general powers necessary to carry out its purposes and duties such as make and execute agreements and contracts, establish special funds, hire staff, leverage the Authority's public funds with monies received from other public and private sources, hold funds received by the Authority in trust, and make grants to entities to promote bioscience-based economic development.
A local government that creates an Authority may incur general indebtedness, and issue general obligation bonds, to finance the grants and other programs and retire the indebtedness. The bonds issued by a local government do not constitute an obligation of Washington, either general or special.
The legislative authority of a local jurisdiction that has created an Authority may impose a retail sales tax credited against the state portion of the retail sales tax from the local jurisdiction. The rate of the tax must not exceed 0.020 percent. The authority to impose an additional sales and use tax expires January 1, 2023. The authorizing statute allowed one Health Sciences and Services Authority to imposed this retail sales tax. This Authority is in Spokane County.
An Authority is allowed to borrow money and incur indebtedness if the creating local government authorizes it through ordinance. Monies borrowed by an authority must be secured by funds derived from gifts or grants from any source. The authority must incur no expense or liability that is an obligation of the state or local government and must pay no expense from funds other than funds of the authority.
No more than 10 percent of the tax distribution an authority receives may be used for staff or for contracting with other individuals.
Summary of Bill:
The expiration date for the 0.020 percent sales and use tax is extended to January 1, 2038.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.