WSR 14-21-161

PREPROPOSAL STATEMENT OF INQUIRY

[Filed October 22, 2014, 7:30 a.m.]

Subject of Possible Rule Making: WAC 458-20-146 (Rule 146) National and state banks, mutual savings banks, savings and loan associations and other financial institutions.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300 and 82.01.060(2).

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Rule 146 explains how national banks, state banks, mutual savings banks, savings and loan associations, and other financial institutions may be subject to business and occupation tax, retail sales and/or use taxes. It also provides examples of when retail sales tax should be collected from the taxpayers' customers and remitted to the state. The department is considering revisions to the rule to incorporate information from legislation (ESB 6635, chapter 6, Laws of 2012) that limits which financial businesses are allowed a deduction for interest earnings on loans secured by first mortgages or deeds of trust on residential properties. The department is also considering including information currently found in ETA 3076 that covers deductibility of interest received on investments or loans primarily secured by first mortgages or trust deeds on nontransient residential properties.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

Process for Developing New Rule: Parties interested in this rule making may contact the individual listed below. The public may also participate by providing written comments throughout this rule making or giving oral testimony at the public meeting or public hearing.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication: A preliminary draft of possible rule changes is available via the department's online Rules Agenda.

Written comments may be submitted by mail and should be directed to Gayle Carlson, ITA Division, P.O. Box 47453, Olympia, WA 98504-7453, e-mail GayleC@dor.wa.gov.

Written and oral comments will be accepted at the public meeting.

Public Meeting Location: Capital Plaza Building, 1st Floor Conference Room, 1025 Union Avenue S.E., Olympia, WA, on December 4, 2014, at 9:00 a.m. Call-in option can be provided upon request no later than three days before the meeting date.

Assistance for Persons with Disabilities: Contact Mary Carol LaPalm, (360) 725-7499, or Renee Cosare, (360) 725-7514, no later than ten days before the meeting date. For hearing impaired please contact us via the Washington relay operator at (800) 833-6384.

October 22, 2014

Dylan Waits

Rules Coordinator