HOUSE BILL REPORT

SHB 198

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Sayan and Madsen; by request of Department of Revenue)

Providing for retail sales tax trust fund accountability.

House Committe on Ways & Means/Revenue

Majority Report:     The substitute bill be substituted therefore and the substitute bill do pass.  (10)

     Signed by Representatives Appelwick, Chair; Basich, Grimm, Holland, Madsen, Rust, Schoon, Taylor, Valle and Winsley.

House Staff:Rick Wickman (786-7150)

AS PASSED HOUSE FEBRUARY 27, 1987

BACKGROUND:

Estimates are that the state is losing $5 million per year in sales taxes collected but not remitted.

Various other states have this type of provision and it would give the state of Washington equal authority with the IRS in regard to personal liability for corporate trust fund taxes.

SUMMARY:

This bill creates a new section of law dealing with sales tax collected but not remitted by corporate businesses.

It provides that in the event of termination of a corporate business, anyone having a proprietary interest in the corporation shall be personally liable for state and local sales tax funds collected but not remitted to the state within 10 days of the termination date.

EFFECT OF SENATE AMENDMENT(S):  Sales taxes paid by businesses on an accrual basis of accounting may be deducted from sales tax not paid when there are disputes over sales tax liability.

Revenue:   The bill has a revenue impact.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Barney McClure, Department of Revenue.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     This bill creates new law dealing with sales taxes collected but not remitted by corporate businesses; provides for liability and collection of unremitted sales taxes.

House Committee - Testimony Against: None Presented.