FINAL BILL REPORT

HB 282

                                   C 28 L 87

BYRepresentatives Appelwick and R. King;by request of Department of Revenue

Exempting purchases with food coupons from sales and use tax.

House Committe on Ways & Means/Revenue

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

Federal law stipulates that states may not apply sales tax to purchases made with food stamps.  States that do tax purchases made with food stamps will become ineligible for the federal food stamp program.  The U.S. Congress felt that the practice of states taxing food stamp purchases was an indirect subsidy to state and local governments, which was not intended.  Washington has until October 1, 1987 to bring its laws into compliance.

Washington state currently exempts most food items from the state sales and use taxes.  However, there are a few items that may be purchased with food stamps that are not exempt under state law. Major items which may be purchased with food stamps but are taxed include carbonated beverages, dietary supplements, garden seeds, bottled water and ice.

SUMMARY:

Purchases made with food stamps are exempt from the retail sales and use taxes.  When purchases are made with both food stamps and cash, the cash must be first applied to the purchases of food items exempt under the current law.

VOTES ON FINAL PASSAGE:

      House 93   0

      Senate    48     0

EFFECTIVE:October 1, 1987