HOUSE BILL REPORT

SB 6350

BYSenators Smith and Hayner

Modifying acceptable proof of a corporation's nonresident status.

House Committe on Revenue

Majority Report:  Do pass.  (13)

      Signed by Representatives Wang, Chair; Pruitt, Vice Chair; Horn, Assistant Ranking Republican Member; Appelwick, Basich, Fraser, Fuhrman, Grant, Morris, Phillips, Rust, H. Sommers and Van Luven.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Brumsickle and Haugen.

House Staff:Robin Appleford (786-7093)

AS REPORTED BY COMMITTEE ON REVENUE FEBRUARY 21, 1990

BACKGROUND:

Nonresidents of Washington are exempt from sales tax, for purchases made in Washington for use outside the state, provided they reside in a state or province not imposing a 3 percent or more sales tax.

Prior to July 1, 1989, a permit was required in order to qualify for the exemption.  The permits were eliminated on that date and replaced with a requirement that two pieces of valid ID establishing residence in another state sufficed.  One of the required pieces of valid ID is either a driver's license or other ID containing a photograph of the person.  Nonresident corporations do not possess such ID and since they could not meet this statutory requirement, their tax exempt status was uncertain.  The Department of Revenue resolved the problem by adopting a rule reinstating the permit process for nonresident corporations.

SUMMARY:

The department is authorized to issue permits to nonresident corporations.

Fiscal Note:      Available

House Committee ‑ Testified For:    No one.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    None.

House Committee - Testimony Against:      None.