FINAL BILL REPORT

HB 67

                                  C 493 L 87

BYRepresentatives Rayburn, Nealey, Prince, Kremen, McLean, C. Smith, Fuhrman, Betrozoff, Amondson, P. King, Chandler, Hargrove, Lewis and Doty

Exempting the conditioning of seed for out-of-state sales from business and occupation taxation.

House Committe on Agriculture & Rural Development

Rereferred House Committee on Ways & Means/Revenue

Senate Committee on Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

State law imposes a business and occupation (B&O) tax on manufacturing activities at a rate equal to 0.484 percent of the value of the products manufactured.

The activities that qualify as manufacturing activities for the purpose of that tax are defined broadly.  In 1985, the State Board of Tax Appeals upheld a determination by the Department of Revenue that the conditioning of vegetable seeds by a seed company constituted "manufacturing" for B&O tax purposes. Certain exemptions from the definition and reduced rates for certain categories of manufacturing are provided by law.

SUMMARY:

Conditioning of seed for use in planting is exempted from the definition of manufacturing for the purposes of the business and occupation tax.

VOTES ON FINAL PASSAGE:

      House 93   2

      Senate    44     0

EFFECTIVE:July 26, 1987