wa-law.org > bill > 2023-24 > HB 1644 > Original Bill
The legislature finds that the state's business and occupation tax, as a gross receipts tax, imposes significant hardships on new businesses, small businesses, and unprofitable and low profit-margin businesses. The legislature further finds that the piecemeal enactment of countless tax preferences to ameliorate these hardships has led to an exceedingly complex tax. The legislature intends to address these issues and improve Washington's economy by converting the business and occupation tax into a modified gross receipts tax to be known as the margin tax. Like the business and occupation tax, the margin tax is imposed upon virtually all business activities carried on within the state, other than those specifically exempt under the constitutions or laws of this state or of the United States.
The legislature recognizes that this proposal, if passed, would reduce the amount distributed to tribes who have entered into compacts under chapter 132, Laws of 2020, as they are currently receiving 100 percent of business and occupation tax from retail sales taxable transactions sourced to a compacting tribe's compact covered area. With the passage of this act, it is not the intent of the legislature to reduce compacting tribes' benefits under tax revenue-sharing compacts. It is the intent of the legislature for the department of revenue to fulfill its compact obligations to discuss any changes in the compact or authorizing acts that may be appropriate to preserve the intended benefits of each compact.
The legislature also recognizes that the federal permanent internet tax freedom act generally prohibits state and local governments from imposing a tax on internet access but expressly excludes certain taxes from this prohibition, including Washington's business and occupation tax. The legislature does not intend by this act to exempt internet access from any tax imposed in this act. Therefore, the legislature intends for the taxes imposed in this act to be considered a modification of the business and occupation tax.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
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"Affiliate" and a person that is "affiliated" mean a person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.
For purposes of this subsection (1), "control" means the possession, directly or indirectly, of more than 50 percent of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise.
"Affiliated group" means a group of two or more persons that are affiliated with each other.
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"Combined group" means a group of persons that are part of an affiliated group engaged in a unitary business, not including affiliates excluded from a combined group as authorized under section 209(6) of this act.
For purposes of this subsection (3), "unitary business" means a business enterprise in which there exists directly or indirectly between the members or parts of the enterprise a sharing or exchange of value as demonstrated by:
Centralized management or a common executive force;
Centralized administrative services or functions resulting in economies of scale;
Flow of goods, capital resources, or services demonstrating functional integration; and
Any other factors the department considers relevant.
"Compensation" means medicare wages properly reportable on box 5 of internal revenue service form W-2 based on federal law as it existed on the effective date of this section or a subsequent date as may be provided by the department by rule, and paid by a taxpayer to an individual for services rendered as an employee of the taxpayer.
"Cost inputs" means a taxpayer's cost of producing or acquiring goods sold by the taxpayer, or producing goods for commercial or industrial use, during the tax year as determined in section 204 of this act.
"Employee" means any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. "Employee" also includes those persons that are defined as an employee in section 3121(d) of the internal revenue code.
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"Goods" means tangible personal property or real property improvements, including agricultural products grown, raised, or produced by the seller; digital products; digital codes; and prewritten computer software.
For purposes of determining cost inputs under this subsection (7), "produced" means to construct, build, install, manufacture, develop, improve, create, raise, or grow the property.
"Internal revenue code" means the internal revenue code of 1986, as it existed on the effective date of this section or a subsequent date as may be provided by the department by rule.
"Product" has the same meaning as in RCW 82.32.023.
"Taxable margin" is the measure of the margin tax imposed under section 202 of this act: (a) After all applicable deductions have been subtracted from the gross income of the business or the value of products manufactured or extracted in this state; and (b) after apportionment or allocation to this state as provided in sections 207 and 208 of this act.
"Taxpayer" means a person or combined group subject to tax under this chapter.
"Worldwide gross income of the business" means income originating from any location globally, less any income that is excluded as a result of an election under section 209(6) of this act for foreign affiliates not engaging in business in Washington.
For the act or privilege of engaging within this state in business, a tax is imposed on each taxpayer that has a substantial nexus with Washington under RCW 82.04.067, including taxpayers subject to tax under subsection (2) of this section.
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For the act or privilege of engaging within this state in business, a tax is imposed on each taxpayer engaging within this state in business as a manufacturer.
For the act or privilege of engaging within this state in business, a tax is imposed on each taxpayer engaging within this state in business as an extractor.
Taxpayers engaging in business both as a manufacturer and extractor are subject to the taxes imposed under this subsection (2) on both business activities.
The taxes imposed in this subsection (2) are in addition to the tax imposed in subsection (1) of this section.
Credits are provided in section 302 of this act to ensure that a taxpayer's taxable margin is taxed only once with respect to a product that is both produced and sold by the taxpayer.
The taxes imposed under this section are computed by multiplying a taxpayer's taxable margin by 3.1966 percent.
The tax imposed in this section may be referred to as the margin tax or Washington margin tax.
For purposes of the tax imposed under section 202(1) of this act, a taxpayer must calculate its taxable margin by selecting one of the following options to deduct from its worldwide gross income of the business:
Worldwide gross income of the business earned during the tax year multiplied by 30 percent;
The standard deduction, which is $1,000,000 for the tax year beginning January 1, 2027, and is adjusted for subsequent tax years as provided by section 206 of this act;
Cost inputs, as determined under section 204 of this act; or
Compensation, as determined under section 205 of this act.
For purposes of the taxes imposed under section 202(2) of this act, a taxpayer must calculate its taxable margin by selecting one of the following options to deduct from its value of products, including byproducts, manufactured or extracted in Washington for sale or for commercial or industrial use:
Value of products manufactured or extracted in Washington during the tax year multiplied by 30 percent;
The standard deduction, which is $1,000,000 for the tax year beginning January 1, 2027, and is adjusted for subsequent tax years as provided by section 206 of this act; or
Cost inputs for the products manufactured or extracted in Washington during the tax year, as determined under section 204 of this act.
Taxpayers must apportion or allocate their taxable margin to this state as provided by sections 207 and 208 of this act.
The taxable margin of a taxpayer cannot be less than zero.
Payments made between members of a combined group taxpayer may be deducted under subsection (1) or (2) of this section, provided those amounts were included in the taxpayer's gross income of the business or value of products.
A taxpayer may elect to claim any one of the deductions under subsection (1) or (2) of this section for a tax year. However, once a taxpayer has made its election by filing a tax return or otherwise notifying the department in writing of its election, it cannot later change its election for the tax year. The taxpayer may change its deduction election for subsequent tax years.
Amounts deducted from either gross income of the business or the value of products under any other section of this chapter cannot also be deducted from gross income of the business or value of products as compensation or cost input under this chapter, except as provided in RCW 82.04.767.
In calculating a taxpayer's taxable margin during an audit for a tax year for which the taxpayer failed to file a tax return, the department must use the deduction under this section that appears to the department to be the most advantageous to the taxpayer.
A taxpayer that elects to deduct its cost inputs for the purpose of computing its taxable margin under section 203 of this act must determine the amount of the cost inputs as provided by this section.
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The cost inputs deductible under section 203 of this act are the cost of goods sold properly reportable for federal income tax purposes. The department need not accept the cost of goods sold reported on the taxpayer's federal income tax return if the department determines that such amount is in error.
For taxpayers that would be able to report cost of goods sold for federal income tax purposes if they were subject to federal income tax, the cost inputs deductible under section 203 of this act are the cost of goods sold that would be properly reportable for federal income tax purposes if the taxpayer were subject to federal income tax.
For purposes of the tax imposed under section 202(2) of this act, cost inputs are limited to the costs of goods sold for products manufactured or extracted in Washington, whether for sale or for commercial or industrial use.
A combined group that elects to subtract cost of goods sold must determine that amount by:
Determining the cost of goods sold for each of its members as provided by this section as if each member were an individual taxable entity; and
Adding the amounts determined under (a) of this subsection (3).
A taxpayer that elects to deduct compensation to determine taxable margin under section 203 of this act may deduct an amount equal to:
The total amount of compensation paid to the taxpayer's employees during the tax year, less any amount of compensation in excess of the compensation cap in (b) of this subsection (1).
For purposes of this subsection (1), the compensation cap applies on a per-employee basis and is $400,000 per employee for the tax year beginning January 1, 2027. The compensation cap is adjusted for subsequent tax years as provided by section 206 of this act.
If an employee receives compensation from more than one member of a combined group, the combined group may not deduct in relation to that employee a total of more than the compensation cap.
A combined group that elects to deduct compensation must determine the amount of the deduction by:
Determining the compensation for each of its members as provided by this section as if each member were an individual taxable entity, subject to the limitations prescribed by subsections (1) and (2) of this section; and
Adding the amounts determined under (a) of this subsection (3).
Effective for tax years beginning January 1, 2029, and every two years thereafter, the department must adjust the standard deduction and compensation deduction cap as prescribed by sections 203 and 205 of this act respectively. The adjustment is calculated by multiplying the previous standard deduction and compensation deduction cap by the sum of one plus the percentage increase in the consumer price index during the preceding state fiscal biennium, rounded to the nearest $10,000. If the consumer price index decreased during the preceding state fiscal biennium, the department shall not adjust the standard deduction and compensation cap deduction.
The department must publish the updated standard deduction and compensation deduction cap on its website.
For purposes of this section, "consumer price index" means the seasonally adjusted consumer price index for all urban consumers (CPI-U), United States city average, as most recently published by November 20th by the United States bureau of labor statistics or its successor agency.
For purposes of determining the proper amount of any tax due under this chapter, taxable margin, value of products, and gross income of the business, including gross proceeds of sales, are allocated and apportioned as provided in this section.
Except for taxable margin and gross income of the business allocated under the provisions of subsection (4) or (5) of this section, taxable margin and gross income of the business are apportioned to this state by multiplying the taxable margin or gross income of the business by a fraction, as follows:
The numerator of the fraction is the taxpayer's gross income of the business attributed to Washington as provided in section 208 of this act;
The denominator of the fraction is the worldwide gross income of the business.
A taxpayer that is required to file returns as a combined group must include in the numerator computed under subsection (2)(a) of this section the gross income of the business from engaging in business in Washington of each affiliate that is a member of the combined group, without regard to whether that entity has a substantial nexus with this state for the purpose of the taxes imposed in this chapter.
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Except as otherwise provided in (b) of this subsection (4), in the case of manufacturing, extracting, processing for hire, extracting for hire, and selling standing timber, where a business is subject to tax under section 202(2) of this act or RCW 82.04.261, the taxable margin, value of products, and gross income of the business from those activities conducted in this state is allocated to this state in its entirety.
Where the manufacturing of a product occurs partly within and outside of this state, the taxpayer must attribute the portion of the measure of tax that reasonably reflects the extent of the manufacturing activity that occurred within this state.
In the case of the surcharge imposed in RCW 82.04.261 on wholesale sales, the gross proceeds of sales are allocated to this state in the same manner as retail sales are sourced to this state under RCW 82.32.730 for retail sales tax purposes.
Except as otherwise provided in subsection (4)(d) of this section, gross income of the business is attributable to Washington as provided in this section.
In the case of gross income of the business from the retail sale or wholesale sale of any product, the gross income of the business is attributed to this state if the sale is sourced to this state under RCW 82.32.730 for purposes of the retail sales tax or would be sourced to this state under that statute if the retail sales tax imposed in chapter 82.08 RCW applied to that sale.
In the case of gross income of the business from the granting of a right to use, enter, or enjoy real property, the gross income of the business is attributed to this state if the real property is located in this state. If the real property is located in this and any other state, the gross income of the business must be attributed to this state in proportion to the area of the real property located in this state relative to the total area of the real property both within and outside of this state.
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In the case of gross income of the business from services or from royalties for the use of the taxpayer's intangible property, other than activities described in subsections (2) and (3) of this section, the gross income of the business is attributed to this state if the customer received the benefit of the taxpayer's service or, in the case of gross income from royalties, the customer used the taxpayer's intangible property, in this state. When a customer receives the benefit of the taxpayer's services or uses the taxpayer's intangible property in this and one or more other states, the taxpayer must attribute to this state a portion of gross income of the business that reasonably reflects the extent to which the customer received the benefit of the taxpayer's services or used the taxpayer's intangible property in this state.
In the case of gross income of the business generated from activities other than those described in (a) of this subsection (4) and subsections (2) and (3) of this section, gross income of the business is attributed to this state to the extent that the gross income of the business fairly represents those business activities of the taxpayer conducted in this state.
For purposes of this section, gross income of the business must be excluded from the denominator of the receipts factor if, in respect to such gross income of the business, at least some of the activity that generated that income is performed in this state, and the gross income of the business would be attributable to a state in which the taxpayer is not taxable if that state's business activity tax laws were identical to the provisions of this chapter.
(a) through (c) of this subsection (4) do not apply to financial institutions. For gross income of the business that would otherwise be attributed as provided in this subsection (4), financial institutions must calculate the receipts factor as provided in a rule that the department must adopt. The rule required under this subsection (4)(d) must, to the extent feasible, be consistent with the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions as it existed on the effective date of this section or a subsequent date as may be provided by the department by rule, consistent with the purposes of this section, except that:
The department's rule must provide for a single factor apportionment method based on the receipts factor; and
The definition of "financial institution" contained in appendix A to the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions is advisory only.
For purposes of this section, the definitions in this subsection apply.
"Business activities tax" means a tax measured by the amount of, or economic results of, business activity conducted in a state. "Business activities tax" includes taxes measured in whole or in part on net income or gross income or receipts, including taxes similar to the margin tax imposed in this chapter. "Business activities tax" does not include a sales tax, use tax, or a similar transaction tax, imposed on the sale or acquisition of goods or services, whether or not denominated a gross receipts tax or a tax imposed on the privilege of doing business.
"Customer" means a person or entity to whom the taxpayer makes a sale, renders services, or who pays royalties or charges in the nature of royalties for the use of the taxpayer's intangible property.
"Not taxable" means that the taxpayer is not subject to a business activities tax by that state, except that a taxpayer is taxable in a state in which it would be deemed to have a substantial nexus with that state under the standards in RCW 82.04.067 regardless of whether that state imposes such a tax.
"State" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any foreign country or political subdivision of a foreign country.
A combined group must register with the department, file, and pay the taxes imposed in this chapter as a single taxpayer.
The combined group must designate a single member as the reporting entity to register, file, and pay taxes on behalf of the combined group. The combined group may change the reporting entity only when the entity no longer has substantial nexus with this state under RCW 82.04.067, is no longer a member of the combined group, or as otherwise permitted or required by the department, at which time the combined group must designate another entity as the reporting entity.
The department may collect identifying information about all members of a combined group and may require disclosure to the department, for each member, of the business activity inside and outside of this state.
Each affiliate that is part of a combined group must, for purposes of determining taxable margin and apportioned taxable margin, include its activities for the same tax period as the combined group.
Each affiliate that is part of a combined group is jointly and severally liable for the taxes owed by the combined group.
A combined group includes all of its affiliated members, including those that do not have a substantial nexus with this state under RCW 82.04.067. However, a combined group may elect to exclude foreign members from the combined group that have not engaged within this state in business during the tax year. The department may by rule adopt policies and procedures for elections made under this subsection.
For any taxpayer that is a combined group, the taxpayer is subject to any tax imposed in this chapter expressly on a taxpayer engaging in a specific business activity, including the taxes imposed in section 202(2) of this act and RCW 82.04.261 through 82.04.299, if any member of the taxpayer's combined group engages in the specific business activity within this state.
Notwithstanding any other provision of this chapter, a taxpayer who is subject to the margin tax under section 202(1) of this act and whose gross income of the business for the tax year from its entire business is not more than $5,000,000 may elect to pay the tax imposed under section 202(1) of this act in the amount computed and at the rate provided by this section rather than in the amount computed and at the tax rate provided under section 202 of this act.
The amount of the tax due under the method authorized in this section is computed by:
Determining the taxpayer's gross income of the business from all activities subject to tax under section 202(1) of this act;
Apportioning the amount determined under (a) of this subsection (2) as provided by sections 207 and 208 of this act; and
Multiplying the amount computed under (b) of this subsection (2) by 1.75 percent.
A taxpayer that elects to pay the tax as provided by this section may not claim any deduction provided for in section 203 of this act.
The option for taxpayers to apply the tax rate under this section does not apply to taxpayers engaged in the business of air commerce or air transportation as defined in 49 U.S.C. Sec. 40102 as it existed on the effective date of this section, or a subsequent date as may be provided by the department by rule, consistent with the purposes of this section.
Before adopting a rule described in subsection (5) of this section, an agency must:
Clearly state in detail the general goals and specific objectives of the statute that the rule implements;
Determine that the rule is needed to achieve the general goals and specific objectives stated under (a) of this subsection, and analyze alternatives to rule making and the consequences of not adopting the rule;
Provide notification in the notice of proposed rule making under RCW 34.05.320 that a preliminary cost-benefit analysis is available. The preliminary cost-benefit analysis must fulfill the requirements of the cost-benefit analysis under (d) of this subsection. If the agency files a supplemental notice under RCW 34.05.340, the supplemental notice must include notification that a revised preliminary cost-benefit analysis is available. A final cost-benefit analysis must be available when the rule is adopted under RCW 34.05.360;
Determine that the probable benefits of the rule are greater than its probable costs, taking into account both the qualitative and quantitative benefits and costs and the specific directives of the statute being implemented;
Determine, after considering alternative versions of the rule and the analysis required under (b), (c), and (d) of this subsection, that the rule being adopted is the least burdensome alternative for those required to comply with it that will achieve the general goals and specific objectives stated under (a) of this subsection;
Determine that the rule does not require those to whom it applies to take an action that violates requirements of another federal or state law;
Determine that the rule does not impose more stringent performance requirements on private entities than on public entities unless required to do so by federal or state law;
Determine if the rule differs from any federal regulation or statute applicable to the same activity or subject matter and, if so, determine that the difference is justified by the following:
A state statute that explicitly allows the agency to differ from federal standards; or
Substantial evidence that the difference is necessary to achieve the general goals and specific objectives stated under (a) of this subsection; and
Coordinate the rule, to the maximum extent practicable, with other federal, state, and local laws applicable to the same activity or subject matter.
In making its determinations pursuant to subsection (1)(b) through (h) of this section, the agency must place in the rule-making file documentation of sufficient quantity and quality so as to persuade a reasonable person that the determinations are justified.
Before adopting rules described in subsection (5) of this section, an agency must place in the rule-making file a rule implementation plan for rules filed under each adopting order. The plan must describe how the agency intends to:
Implement and enforce the rule, including a description of the resources the agency intends to use;
Inform and educate affected persons about the rule;
Promote and assist voluntary compliance; and
Evaluate whether the rule achieves the purpose for which it was adopted, including, to the maximum extent practicable, the use of interim milestones to assess progress and the use of objectively measurable outcomes.
After adopting a rule described in subsection (5) of this section regulating the same activity or subject matter as another provision of federal or state law, an agency must do all of the following:
Coordinate implementation and enforcement of the rule with the other federal and state entities regulating the same activity or subject matter by making every effort to do one or more of the following:
Deferring to the other entity;
Designating a lead agency; or
Entering into an agreement with the other entities specifying how the agency and entities will coordinate implementation and enforcement.
If the agency is unable to comply with this subsection (4)(a), the agency must report to the legislature pursuant to (b) of this subsection;
b. Report to the joint administrative rules review committee:
i. The existence of any overlap or duplication of other federal or state laws, any differences from federal law, and any known overlap, duplication, or conflict with local laws; and
ii. Make recommendations for any legislation that may be necessary to eliminate or mitigate any adverse effects of such overlap, duplication, or difference.
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Except as provided in (b) of this subsection, this section applies to:
Significant legislative rules of the departments of ecology, labor and industries, health, revenue, social and health services, and natural resources, the employment security department, the forest practices board, the office of the insurance commissioner, the state building code council, and to the legislative rules of the department of fish and wildlife implementing chapter 77.55 RCW; and
Any rule of any agency, if this section is voluntarily made applicable to the rule by the agency, or is made applicable to the rule by a majority vote of the joint administrative rules review committee within forty-five days of receiving the notice of proposed rule making under RCW 34.05.320.
This section does not apply to:
Emergency rules adopted under RCW 34.05.350;
Rules relating only to internal governmental operations that are not subject to violation by a nongovernment party;
Rules adopting or incorporating by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule;
Rules that only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect;
Rules the content of which is explicitly and specifically dictated by statute, including any rules of the department of revenue adopted under the authority of RCW 82.32.762(3);
Rules that set or adjust fees under the authority of RCW 19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW 19.80.045;
Rules of the department of social and health services relating only to client medical or financial eligibility and rules concerning liability for care of dependents;
Rules of the department of revenue that adopt a uniform expiration date for reseller permits as authorized in RCW 82.32.780 and 82.32.783; or
ix. Rules of the department of revenue that adopt policies or procedures for taxpayers making an election under section 209(6) of this act.
For purposes of this subsection:
A "procedural rule" is a rule that adopts, amends, or repeals (A) any procedure, practice, or requirement relating to any agency hearings; (B) any filing or related process requirement for making application to an agency for a license or permit; or (C) any policy statement pertaining to the consistent internal operations of an agency.
An "interpretive rule" is a rule, the violation of which does not subject a person to a penalty or sanction, that sets forth the agency's interpretation of statutory provisions it administers.
A "significant legislative rule" is a rule other than a procedural or interpretive rule that (A) adopts substantive provisions of law pursuant to delegated legislative authority, the violation of which subjects a violator of such rule to a penalty or sanction; (B) establishes, alters, or revokes any qualification or standard for the issuance, suspension, or revocation of a license or permit; or (C) adopts a new, or makes significant amendments to, a policy or regulatory program.
In the notice of proposed rule making under RCW 34.05.320, an agency must state whether this section applies to the proposed rule pursuant to (a)(i) of this subsection, or if the agency will apply this section voluntarily.
By January 31, 1996, and by January 31st of each even-numbered year thereafter, the office of regulatory assistance, after consulting with state agencies, counties, and cities, and business, labor, and environmental organizations, must report to the governor and the legislature regarding the effects of this section on the regulatory system in this state. The report must document:
The rules proposed to which this section applied and to the extent possible, how compliance with this section affected the substance of the rule, if any, that the agency ultimately adopted;
The costs incurred by state agencies in complying with this section;
Any legal action maintained based upon the alleged failure of any agency to comply with this section, the costs to the state of such action, and the result;
The extent to which this section has adversely affected the capacity of agencies to fulfill their legislatively prescribed mission;
The extent to which this section has improved the acceptability of state rules to those regulated; and
Any other information considered by the office of financial management to be useful in evaluating the effect of this section.
"Tax year" means the calendar year.
"Engaging within this state," "engaging within the state," "conducted in this state," and similar terms mean that a person generates gross income of the business from sources within this state, such as customers or intangible property located in this state, regardless of whether the person is physically present in this state.
A person engaging in business is deemed to have substantial nexus with this state if, in the current or immediately preceding calendar year, the person is:
An individual and is a resident or domiciliary of this state;
A business entity and is organized or commercially domiciled in this state; or
A nonresident individual or a business entity that is organized or commercially domiciled outside this state, and the person had:
More than one hundred thousand dollars of cumulative gross receipts from this state; or
Subject to the limitation in RCW 82.32.531, physical presence in this state, which need only be demonstrably more than a slightest presence. A person engaging within this state in business as an extractor or manufacturer has physical presence in this state.
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in the same manner as gross income of the business is attributed to this state under section 208 of this act, and in the case of financial institutions, as provided in the rule adopted by the department as required under section 208 of this act.
b. For a marketplace facilitator, cumulative gross receipts counting toward the threshold in subsection (1)(c)(i) of this section include, in addition to the gross proceeds of its own sales, the cumulative gross proceeds from sales by all marketplace sellers through the marketplace facilitator's marketplace, including marketplace sellers that do not have a substantial nexus with this state under the provisions of this section.
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For purposes of subsection (1)(c)(ii) of this section, a person is physically present in this state if the person has property or employees in this state. A person has property in this state if the person owns or possesses property that is located in this state.
A person is also physically present in this state for the purposes of subsection (1)(c)(ii) of this section if the person, either directly or through an agent or other representative, engages in activities in this state that are significantly associated with the person's ability to establish or maintain a market for its products in this state.
4.
A taxpayer that is a combined group has substantial nexus with this state under this section if any member of the combined group has substantial nexus with this state under this section.
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A taxpayer who establishes or reestablishes a substantial nexus with this state after the first day of the current calendar year under the provisions of this section is subject to the taxes, including surcharges, imposed under this chapter for the current calendar year only on business activity occurring on and after the date that the taxpayer established or reestablished a substantial nexus with this state in the current calendar year.
The provisions of (a) of this subsection do not apply to a taxpayer who met any of the criteria in subsection (1)(a) through (c) of this section during the immediately preceding calendar year, and the taxpayer is taxable under this chapter for the current calendar year in its entirety.
For purposes of this section, "marketplace," "marketplace facilitator," and "marketplace seller" have the same meaning as provided in RCW 82.08.010.
"Gross income of the business" means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.
Financial institutions must determine gains realized from trading in stocks, bonds, and other evidences of indebtedness on a net annualized basis. For purposes of this subsection, a financial institution means a person within the scope of the rule adopted by the department under the authority of section 208 of this act.
With respect to the business of operating contests of chance, "gross income of the business" does not include the monetary value or actual cost of any prizes that are awarded, amounts paid to players for winning wagers, accrual of prizes for progressive jackpot contests, or repayment of amounts used to seed guaranteed progressive jackpot prizes. The definitions in RCW 82.04.285 apply to this subsection.
"Gross income of the business" does not include the gross proceeds of sales of precious metal bullion or monetized bullion. However, "gross income of the business" of selling precious metal bullion or monetized bullion includes the taxpayer's gain on such sales and also amounts received as commissions upon transactions for the accounts of customers over and above the amount paid to other dealers associated in such transactions, but no deduction or offset is allowed on account of salaries or commissions paid to salesmen or other employees.
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With respect to real estate commissions earned by a real estate firm, "gross income of the business" is the gross commission earned by the particular real estate firm, including that portion of the commission paid to brokers, including designated and managing brokers, in the same firm on a particular transaction. However, when a real estate commission on a particular transaction is divided among real estate firms at the closing of the transaction, including a firm located out of state, each firm must include in its gross income of the business only its respective shares of said commission. Moreover, when the real estate firm has paid the tax as provided in this chapter, brokers, including designated and managing brokers, within the same real estate firm are not required to pay tax under this chapter upon the same transaction. If any firm located out of state receives a share of commission on a particular transaction and has a substantial nexus with this state under RCW 82.04.067, that company or broker is subject to the provisions of this chapter with respect to the commission.
For the purposes of this subsection (5), "broker," "designated broker," "managing broker," and "real estate firm" have the same meanings as provided in RCW 18.85.011.
With respect to amounts received from parimutuel wagering taxed under RCW 82.04.286, "gross income of the business" does not include amounts paid to players for winning wagers, or taxes imposed or other distributions required under chapter 67.16 RCW.
In computing the taxes imposed under this chapter, a taxpayer may claim unused business and occupation tax credits through the earlier of the tax year beginning January 1, 2031, or the tax year that includes the latest point in time for which the credit could have been claimed by the taxpayer under this chapter.
A taxpayer that is a combined group may claim the unused business and occupation tax credits of any member of the combined group.
The amount of credit claimed may not exceed the amount of tax otherwise due under this chapter for the tax year for which the credit is claimed. Unused credits may not be carried forward to tax years beginning on or after January 1, 2032.
For purposes of this section, "unused business and occupation tax credit" means a credit against the tax imposed under this chapter and earned but not claimed before the effective date of the repeal of the credit under section 701 of this act.
This section expires January 1, 2032.
Taxpayers subject to the margin tax imposed under section 202(2)(a) of this act for engaging in business within this state as a manufacturer are allowed a credit against that tax for any extracting taxes paid with respect to extracting the ingredients of the products manufactured in this state. The amount of the credit may not exceed the tax liability arising under section 202(2)(a) of this act with respect to the manufacturing of those products.
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Taxpayers subject to the margin tax imposed under section 202(1) of this act with respect to selling products in this state are allowed a credit against that tax for either or both of the following:
Any manufacturing taxes paid with respect to the manufacturing of products sold in this state; and
Extracting taxes paid with respect to the extracting of products sold in this state or ingredients of products so sold in this state. Extracting taxes taken as a credit under subsection (1) of this section may also be taken under this subsection (2)(a)(ii), if otherwise allowable under this subsection (2)(a)(ii).
The amount of credit under this subsection (2) may not exceed the tax liability arising under section 202(1) of this act with respect to the sales of products manufactured or extracted by the seller. The department may require taxpayers claiming the credit under this subsection (2) to report the amount of their margin tax liability attributable to the sale in this state of products manufactured or extracted by the taxpayer.
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Persons taxable under section 202(2) of this act with respect to extracting or manufacturing products in this state are allowed a credit against those taxes for any:
Margin taxes paid to another state with respect to the sales of the products extracted or manufactured in this state;
Manufacturing taxes paid with respect to the manufacturing of products using ingredients extracted in this state; or
Manufacturing taxes paid with respect to manufacturing activities completed in another state for products manufactured in this state.
The amount of the credit under this subsection (3) may not exceed the tax liability arising under section 202(2) of this act with respect to the extraction or manufacturing of products under (a) of this subsection (3).
No application is required to claim credits under this section. Unused credit under this section may not be carried forward or backward and claimed for any tax reporting periods preceding or following the tax reporting period for which the credit is earned.
For purposes of this section, the definitions in this subsection apply:
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"Extracting tax" means a margin tax imposed expressly on the act or privilege of engaging in business as an extractor, and includes the tax imposed on extractors in section 202(2)(b) of this act and similar margin taxes paid to other states.
For purposes of this subsection (5)(a), "similar margin taxes" paid to other states does not include a margin tax as applied to the sale of products extracted by the taxpayer.
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"Manufacturing tax" means a margin tax imposed expressly on the act or privilege of engaging in business as a manufacturer, and includes the tax imposed under section 202(2)(a) of this act and similar margin taxes paid to other states.
For purposes of this subsection (5)(b), "similar margin taxes paid to other states" does not include a margin tax as applied to the sale of products manufactured by the taxpayer.
"Margin tax" means a tax that:
Is imposed on or measured by a taxpayer's gross volume of business, in terms of gross income, gross receipts, value of products, or other terms, less a specified dollar amount that is at least $500,000, or a specified percentage of 15 percent or more of its gross income, or all or a significant portion of its labor costs, cost of goods sold, or cost inputs;
Does not allow deductions or exclusions in calculating the tax that would render the tax a net income tax or value added tax; and
Is not, pursuant to law or custom, separately stated from the sales price on any document of sale provided to the customer.
"State" means:
The state of Washington;
A state of the United States other than Washington, or any political subdivision of such other state;
The District of Columbia; and
Any foreign country or political subdivision thereof.
"Taxpayer" has the same meaning as in section 201 of this act and includes any member of its combined group that has paid a margin tax to another state.
The tax imposed by section 202(2)(a) of this act does not apply to cleaning fish. "Cleaning fish" means the removal of the head, fins, or viscera from fresh fish without further processing, other than freezing.
This chapter does not apply to business activity taxable under chapter 82.16 RCW, including amounts derived from activities for which a deduction or exemption is allowed under chapter 82.16 RCW . However, the exemption in this section does not apply to sales of natural gas, including compressed natural gas and liquefied natural gas used or sold to manufacture transportation fuel, and renewable natural gas, by a gas distribution business, if such sales are exempt from the tax imposed under chapter 82.16 RCW as provided in RCW 82.16.310.
This chapter does not apply to amounts received by the tobacco settlement authority under chapter 43.340 RCW.
Except as otherwise provided in this section, this chapter does not apply to amounts upon which a tax based on gross premiums is paid to the state under Title 48 RCW.
The provisions of this section do not exempt any person engaging in the business of representing any insurance company, whether as general or local agent, or acting as broker for such companies.
The provisions of this section do not exempt any bonding company from tax with respect to taxable margin generated from the completion of any contract as to which it is a surety, or as to any liability as successor to the liability of the defaulting contractor.
4.
Eligible captive insurers affiliated with a public institution of higher education that are exempt from paying a premium tax under RCW 48.201.040 are exempt from the tax imposed by this chapter in respect to their insurance business. For purposes of this subsection (4), the definitions in RCW 48.201.020 apply.
This chapter does not apply to amounts received by any health maintenance organization, health care service contractor, or certified health plan in respect to premiums or prepayments that are taxable under RCW 48.14.0201.
This chapter does not apply to amounts received by the Washington health benefit exchange established under chapter 43.71 RCW.
This chapter does not apply to amounts received from the business of conducting boxing contests and sparring or wrestling matches and exhibitions for the conduct of which a license must be secured from the department of licensing if the fee for the license is based, in whole or in part, on the gross receipts from the licensed activity.
Except as provided in RCW 82.04.286(1), this chapter does not apply to amounts received from the business of conducting race meets for the conduct of which a license must be secured from the horse racing commission if the fee for the license is based, in whole or in part, on the gross receipts from the licensed activity.
This chapter does not apply to any person in respect to the persons employment in the capacity of an employee or servant as distinguished from that of an independent contractor.
The exemption in subsection (1) of this section does not apply to amounts received by an individual from a corporation as compensation for serving as a member of that corporation's board of directors.
A booth renter is an independent contractor for purposes of this chapter. For purposes of this section, "booth renter" means any person who:
Performs cosmetology, barbering, esthetics, or manicuring services for which a license is required under chapter 18.16 RCW; and
Pays a fee for the use of salon or shop facilities and receives no compensation or other consideration from the owner of the salon or shop for the services performed.
This chapter does not apply to corporations incorporated under any act of the congress of the United States of America and whose principal purposes are to furnish volunteer aid to members of the armed forces of the United States and also to carry on a system of national and international relief and to apply the same in mitigating the sufferings caused by pestilence, famine, fire, floods, and other national calamities and to devise and carry on measures for preventing the same.
This chapter does not apply to amounts received from the sale of real estate. This exemption does not apply to gross income of the business received as commissions from the sale of real estate, nor as fees, handling charges, discounts, interest or similar financial charges resulting from, or relating to, real estate transactions.
This chapter does not apply to amounts received by credit unions organized under the laws of this state, any other state, or the United States.
This chapter does not apply to amounts received by the state housing finance commission under chapter 43.180 RCW.
In computing tax there may be deducted from gross income of the business amounts derived from bona fide (a) initiation fees, (b) dues, (c) contributions, (d) donations, (e) tuition fees, (f) charges made by a nonprofit trade or professional organization for attending or occupying space at a trade show, convention, or educational seminar sponsored by the nonprofit trade or professional organization, which trade show, convention, or educational seminar is not open to the general public, (g) charges made for operation of privately operated kindergartens, and (h) endowment funds.
This section does not exempt any person, association, or society from tax liability upon selling tangible personal property, digital goods, digital codes, or digital automated services, or upon providing facilities or other services for which a special charge is made to members or others. If dues are in exchange for any significant amount of goods or services rendered by the recipient thereof to members without any additional charge to the member, or if the dues are graduated upon the amount of goods or services rendered, the value of such goods or services are not deductible under this section.
In computing tax there may be deducted from gross income of the business the amount of cash discount actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount for purposes of the taxes imposed under section 202(2) of this act or RCW 82.04.261 on taxpayers engaging in business as a manufacturer or extractor.
For purposes of this section, "cash discount" means a deduction from the invoice price of goods or charge for services that is allowed if the bill is paid on or before a specified date.
In computing tax there may be deducted from gross income of the business bad debts, as that term is used in 26 U.S.C. Sec. 166, as amended or renumbered as of January 1, 2003, on which tax was previously paid.
For purposes of this section, "bad debts" do not include:
Amounts due on property that remains in the possession of the seller until the full purchase price is paid;
Expenses incurred in attempting to collect debt;
Sales or use taxes payable to a seller; and
Repossessed property.
If a deduction is taken for a bad debt and the debt is subsequently collected in whole or in part, the amount collected must be included in gross income of the business and reported on the return filed for the period in which the collection is made.
Payments on a previously claimed bad debt must be applied under RCW 82.08.037(4) and 82.12.037, according to such rules as the department may prescribe.
In computing tax there may be deducted from gross income of the business the portion of the sale price of fuel that constitutes the amount of tax imposed by the state under chapter 82.38 RCW or the United States government, under 26 U.S.C., Subtitle D, chapters 31 and 32, upon the sale thereof.
This chapter does not apply to amounts received from business activity that the state is prohibited from taxing under the Constitution of this state or the Constitution or laws of the United States.
In computing tax there may be deducted from gross income of the business by those engaged in banking, loan, security, or other financial businesses, amounts received from interest paid on all obligations of the state of Washington, its political subdivisions, and municipal corporations organized pursuant to the laws thereof.
In computing tax there may be deducted from the gross income of the business amounts received by a nonprofit organization from the United States or any instrumentality thereof, the state of Washington or any municipal corporation or political subdivision thereof, or an Indian tribe as defined in RCW 43.06.523, as salmon recovery grants.
For the purposes of this section, the following definitions apply:
"Nonprofit organization" has the same meaning as in RCW 82.04.3651.
"Salmon recovery grant" means, solely for the purposes of this section, financial assistance provided to primarily benefit the public as a whole by renewing, restoring, or protecting, by human intervention, salmon ecosystems or salmon habitats in this state, whether or not such financial assistance furthers the regulatory activities of the grantor.
Every person engaged in activities that are subject to tax under two or more provisions of RCW 82.04.261 is taxable under each provision applicable to those activities.
Persons taxable under RCW 82.04.261with respect to selling products at wholesale in this state are allowed a credit against those taxes for any (a) manufacturing taxes paid with respect to the manufacturing of products so sold in this state, and/or (b) extracting taxes paid with respect to the extracting of products so sold in this state or ingredients of products so sold in this state. Extracting taxes taken as credit under subsection (3) of this section may also be taken under this subsection, if otherwise allowable under this subsection. The amount of the credit may not exceed the tax liability arising under RCW 82.04.261 with respect to the sale of those products.
Persons taxable as manufacturers under RCW 82.04.261 are allowed a credit against those taxes for any extracting taxes paid with respect to extracting the ingredients of the products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under RCW 82.04.261 with respect to the manufacturing of those products.
Persons taxable under RCW 82.04.261 with respect to extracting or manufacturing products in this state are allowed a credit against those taxes for any (a) gross receipts taxes paid to another state with respect to the sales of the products so extracted or manufactured in this state, (b) manufacturing taxes paid with respect to the manufacturing of products using ingredients so extracted in this state, or (c) manufacturing taxes paid with respect to manufacturing activities completed in another state for products so manufactured in this state. The amount of the credit may not exceed the tax liability arising under RCW 82.04.261 with respect to the extraction or manufacturing of those products.
No application is required to claim credits under this section. Unused credit under this section may not be carried forward or backward and claimed for any tax reporting periods preceding or following the tax reporting period for which the credit is earned.
For the purpose of this section, the definitions in this subsection apply:
"Gross receipts tax" means a tax that:
Is imposed on or measured by a taxpayer's gross volume of business, in terms of gross income, gross receipts, value of products, or in other terms, and in the determination of which the deductions allowed would not constitute the tax a net income tax or value added tax; and
Is also not, pursuant to law or custom, separately stated from the sales price on any document of sale provided to the customer.
"State" means (i) the state of Washington, (ii) a state of the United States other than Washington, or any political subdivision of such other state, (iii) the District of Columbia, and (iv) any foreign country or political subdivision thereof.
"Manufacturing tax" means a gross receipts tax imposed expressly on the act or privilege of engaging in business as a manufacturer, and includes the tax imposed under RCW 82.04.261 on persons who are engaged in business as a manufacturer and similar gross receipts taxes paid to other states.
"Extracting tax" means a gross receipts tax imposed expressly on the act or privilege of engaging in business as an extractor, and includes the tax imposed under RCW 82.04.261 on persons who are engaged in business as an extractor and similar gross receipts taxes paid to other states.
"Business," "manufacturer," "extractor," and other terms used in this section have the meanings given in RCW 82.04.020 through 82.04.217, notwithstanding the use of those terms in the context of describing taxes imposed by other states.
To avoid taxing the same sale or exchange under both the margin tax and capital gains tax, a deduction is allowed from gross income of the business in the amount of gain on a sale or exchange of long-term capital assets by a taxpayer if:
The sale or exchange is subject to tax under this chapter and the tax imposed under RCW 82.87.040;
The gain is included in the Washington capital gains of the taxpayer or a legal or beneficial owner of the taxpayer; and
The taxpayer or a legal or beneficial owner of the taxpayer has paid the tax imposed under RCW 82.87.040 with respect to the Washington capital gains.
For purposes of this section, where a taxpayer is a combined group, a legal or beneficial owner of the taxpayer means a legal or beneficial owner of any member of the combined group.
3.
The department may require this deduction be claimed on an amended return if, at the time the original return under this chapter is due, the tax imposed under RCW 82.87.040 has not been paid as required by subsection (1)(b) of this section.
Subject to the limitations in this section, a credit is allowed against the tax imposed under this chapter for contributions made by a taxpayer to the equitable access to credit program created in chapter 43.390 RCW.
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The taxpayer must make the contribution before claiming a credit authorized under this section. The credit may be used against any tax due under this chapter. The amount of the credit claimed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period. No taxpayer may claim more than $1,000,000 of credit for any tax year, including credit carried over from a previous tax year. No refunds may be granted for any unused credits.
Any amount of tax credit otherwise allowable under this section not claimed by the taxpayer in any tax year, including unused credit remaining as of June 30, 2027, may be carried forward and claimed against a taxpayer's tax liability for the next succeeding tax year; and any credit not used in that next succeeding tax year may be carried forward and claimed against the taxpayer's tax liability for the second succeeding tax year, but may not be carried over for any tax year thereafter. Credit under this section may not be carried back and claimed for tax years ending before the credit under this section is earned.
Credits are available on a first-in-time basis. The department must disallow any credits, or portions thereof, that would cause the total amount of credits claimed under this section for any tax year to exceed $8,000,000. If this limitation is reached, the department must notify the department of commerce that the annual statewide limit has been met. In addition, the department must provide written notice to any taxpayer who has claimed tax credits in excess of the limitation in this subsection. The notice must indicate the amount of tax due and provide the tax be paid within 30 days from the date of the notice. The department may not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.
To claim a credit under this section, a taxpayer must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in electronic format. As used in this subsection, "returns" has the same meaning as "return" in RCW 82.32.050.
No application is necessary for the tax credit. The taxpayer must keep records necessary for the department to verify eligibility under this section.
The equitable access to credit program must provide to the department, upon request, such information as may be needed to verify eligibility for credit under this section, including information regarding contributions received by the program.
The maximum credit that may be earned for each tax year under this section for a taxpayer is limited to the lesser of $1,000,000 or an amount equal to 100 percent of the contributions made by the taxpayer to the equitable access to credit program during the tax year.
No credit may be earned for contributions made on or after June 30, 2027. Credits may be claimed as provided in subsections (2) through (4) of this section; however, credits may not be claimed prior to January 1, 2023.
For the purposes of this section, "equitable access to credit program" means a program established within the department of commerce pursuant to RCW 43.390.020.
The provisions of chapter 82.32 RCW apply to the administration of this section.
This section expires July 1, 2027.
This chapter does not apply to public corporations, commissions, or authorities created under RCW 35.21.660 or 35.21.730 for amounts received from sales of tangible personal property and services to:
A limited liability company in which the corporation, commission, or authority is the managing member;
A limited partnership in which the corporation, commission, or authority is the general partner; or
A single asset entity required under any federal, state, or local governmental housing assistance program, which is controlled directly or indirectly by the corporation, commission, or authority.
This chapter does not apply to amounts received from the value proceeding or accruing from a qualifying grant received on or after February 29, 2020.
For purposes of this section, "qualifying grant" means an amount received, or relief from debt or other legal obligation received, that:
Is received under a government-funded program either directly from a government entity, or through a nongovernmental third-party entity authorized by a government entity to distribute the program funds, or, in the case of relief from debt or other legal obligation, is received from a private entity under circumstances where, in exchange for providing the relief, the private entity receives some form of direct financial benefit from a government entity;
Is provided to address the impacts of conditions giving rise to an official proclamation of a national emergency by the president of the United States or an official proclamation of a state of emergency by the governor of this state; and
Is not an amount received:
Under a contract, including a sole source contract, for the acquisition of specific goods or services, or both, by purchase, lease, or barter, that was solicited and established in accordance with procurement laws or regulations; or
For manufacturing, extracting, or making sales of products, when the amount received is determined based on the quantity of products manufactured, extracted, or sold.
For purposes of a grant awarded to address the impacts of conditions giving rise to a national emergency or state of emergency, the exemption under this section applies only if the legislation authorizing the grant or the associated legislative history, public records created by the grantor, or the terms of the underlying grant agreement between the grantor and grantee, clearly indicate that the grant was established to address the impacts of conditions giving rise to a national emergency or state of emergency.
Businesses may include:
As a cost input under section 204 of this act any expense paid using qualifying grant proceeds to the extent the expense is otherwise includable as a cost input under that section; and
As compensation under section 205 of this act any amount paid using qualifying grant proceeds to the extent the amount is otherwise includable as compensation under that section
For purposes of this section, "government" means any national, tribal, state, or local government.
A taxpayer that both collects and timely remits to the department the retail sales tax imposed under RCW 82.08.020(1) is allowed a credit against those taxes. The amount of the credit earned for a tax reporting period is equal to 0.2528 percent of the total amount of retail sales tax imposed in RCW 82.08.020(1) and properly collected and remitted by the taxpayer to the department by the due date of the tax return for that tax reporting period or any extension of the due date granted by the department. For purposes of this subsection (1), a taxpayer that remits the tax imposed in RCW 82.08.020(1) after the due date has remitted the tax by the due date if the department waives or cancels the penalty associated with the delinquency as authorized by chapter 82.32 RCW.
The credit under this section may not exceed the taxes otherwise due under RCW 82.08.020(1). Any unused credit may not be carried forward or backward to a different tax reporting period.
The surcharges imposed in RCW 82.04.261 through 82.04.299 are in addition to the margin tax imposed under section 202 of this act.
Each person with a substantial nexus with this state under RCW 82.04.067 and engaging within this state in any business activity for which a surcharge is imposed under this chapter is subject to the applicable surcharge or surcharges, regardless of whether the person is subject to the margin tax imposed in section 202 of this act or is part of a combined group subject to the margin tax imposed in section 202 of this act.
Persons subject to the surcharges referenced in subsection (1) of this section must file and pay the surcharges in a form and manner prescribed by the department as provided in RCW 82.32.045.
A surcharge is imposed on those persons who are engaged in the business of:
Operating as an extractor of timber;
Extracting timber for hire;
Operating as a manufacturer of: (i) Timber into timber products or wood products; (ii) timber products into other timber products or wood products; or (iii) products defined in RCW 19.27.570(1);
Processing for hire: (i) Timber into timber products or wood products; (ii) timber products into other timber products or wood products; or (iii) products defined in RCW 19.27.570(1);
Selling at wholesale: (i) Timber extracted by that person; (ii) timber products manufactured by that person from timber or other timber products; (iii) wood products manufactured by that person from timber or timber products; or (iv) products defined in RCW 19.27.570(1) manufactured by that person; or
Selling standing timber.
The surcharge equals the person's taxable amount for all activities described in subsection (1) of this section that the person engages in, multiplied by the rate of 0.052 percent.
All receipts from the surcharge imposed under this section must be deposited into the forest and fish support account created in RCW 76.09.405, with any receipts above eight million dollars per biennium specifically used as additional funding for tribal participation grants.
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The surcharge imposed under this section is suspended if:
i.
Between July 1, 2024, through June 30, 2029, receipts from the surcharge total at least nine million dollars during any fiscal biennium; and
ii. After June 30, 2029, the receipts from the surcharge total at least nine million five hundred thousand dollars during any fiscal biennium.
b. The suspension of the surcharge under this subsection (4) takes effect on the first day of the calendar month that is at least thirty days after the end of the month during which the department determines that receipts from the surcharge total the values specified in this subsection (4) during the fiscal biennium. The surcharge is imposed again at the beginning of the following fiscal biennium.
For purposes of this section, the definitions in this subsection apply:
"Biocomposite surface products" means surface material products containing, by weight or volume, more than 50 percent recycled paper and that also use nonpetroleum-based phenolic resin as a bonding agent.
"Paper and paper products" means products made of interwoven cellulosic fibers held together largely by hydrogen bonding. "Paper and paper products" includes newsprint; office, printing, fine, and pressure-sensitive papers; paper napkins, towels, and toilet tissue; kraft bag, construction, and other kraft industrial papers; paperboard, liquid packaging containers, containerboard, corrugated, and solid-fiber containers including linerboard and corrugated medium; and related types of cellulosic products containing primarily, by weight or volume, cellulosic materials. "Paper and paper products" does not include books, newspapers, magazines, periodicals, and other printed publications, advertising materials, calendars, and similar types of printed materials.
"Recycled paper" means paper and paper products having 50 percent or more of their fiber content that comes from postconsumer waste. For purposes of this subsection (5)(c), "postconsumer waste" means a finished material that would normally be disposed of as solid waste, having completed its life cycle as a consumer item.
"Taxable amount" means:
Gross income of the business, with regard to the business activities described in subsection (1)(b), (d), and (f) of this section;
Value of products, including byproducts, extracted or manufactured, with regard to the business activities described in subsection (1)(a) and (c) of this section; and
Gross proceeds of sales, with regard to the products described in subsection (1)(e) of this section.
"Timber" means forest trees, standing or down, on privately or publicly owned land. "Timber" does not include Christmas trees that are cultivated by agricultural methods or short-rotation hardwoods as defined in RCW 84.33.035.
"Timber products" means:
Logs, wood chips, sawdust, wood waste, and similar products obtained wholly from the processing of timber, short-rotation hardwoods as defined in RCW 84.33.035, or both;
Pulp, including market pulp and pulp derived from recovered paper or paper products; and
Recycled paper, but only when used in the manufacture of biocomposite surface products.
"Wood products" means paper and paper products; dimensional lumber; engineered wood products such as particleboard, oriented strand board, medium density fiberboard, and plywood; wood doors; wood windows; and biocomposite surface products.
This section expires July 1, 2045.
0.13 percent . The money collected under this section must be deposited in the problem gambling account created in RCW 41.05.751. This section does not apply to businesses operating contests of chance when the gross income from the operation of contests of chance is less than fifty thousand dollars per year.
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For the purpose of this section, "contests of chance" means any contests, games, gaming schemes, or gaming devices, other than the state lottery as defined in RCW 67.70.010, in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor in the outcome. The term includes social card games, bingo, raffle, and punchboard games, and pull-tabs as defined in chapter 9.46 RCW.
"Contests of chance" does not include: (i) Race meet for the conduct of which a license must be secured from the Washington horse racing commission, (ii) "amusement game" as defined in RCW 9.46.0201, or (iii) any activity that is not subject to regulation by the gambling commission.
2.
The tax imposed under this section is in addition to any tax imposed under chapter 67.16 RCW.
In addition to any other taxes imposed under this chapter, a surcharge is imposed on specified financial institutions. The surcharge is equal to the gross income of the business taxable under RCW 82.04.290 multiplied by the rate of 1.2 percent.
The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
a.
"Consolidated financial institution group" means all financial institutions that are affiliated with each other.
b. "Consolidated financial statement" means a consolidated financial institution group's consolidated reports of condition and income filed with the federal financial institutions examination council, or successor agency.
c. "Financial institution" means any person that is:
i. A corporation or other business entity chartered under Titles 30A, 30B, 31, 32, and 33 RCW, or registered under the federal bank holding company act of 1956, as amended, or registered as a savings and loan holding company under the federal national housing act, as amended;
ii. A national bank organized and existing as a national bank association pursuant to the provisions of the national bank act, 12 U.S.C. Sec. 21 et seq.;
iii. A savings association or federal savings bank as defined in the federal deposit insurance act, 12 U.S.C. Sec. 1813(b)(1);
iv. A bank or thrift institution incorporated or organized under the laws of any state;
v. A corporation organized under the provisions of 12 U.S.C. Sec. 611 through 631;
vi. An agency or branch of a foreign depository as defined in 12 U.S.C. Sec. 3101 that is not an international banking facility. For purposes of this subsection (2)(c)(vi), "international banking facility" means a facility represented by a set of asset and liability accounts segregated on the books and records of a commercial bank, the principal office of which is located in this state, and which is incorporated and doing business under the laws of the United States or of this state, a United States branch or agency of a foreign bank, an edge corporation organized under section 25(a) of the Federal Reserve Act, 12 U.S.C. Sec. 611-631, or an agreement corporation having an agreement or undertaking with the board of governors of the federal reserve system under section 25 of the Federal Reserve Act, 12 U.S.C. 601-604a, that includes only international banking facility time deposits (as defined in subsection (a)(2) of Section 204.8 of Regulation D (12 C.F.R. Part 204), as promulgated by the board of governors of the federal reserve system), and international banking facility extensions of credit (as defined in subsection (a)(3) of section 204.8 of Regulation D);
vii. A production credit association organized under the federal farm credit act of 1933, all of whose stock held by the federal production credit corporation has been retired;
viii. A corporation or other business entity who receives gross income taxable under RCW 82.04.290, and whose voting interests are more than fifty percent owned, directly or indirectly, by any person or business entity described in (c)(i) through (vii) of this subsection other than an insurance company liable for the insurance premiums tax under RCW 48.14.020 or any other company taxable under chapter 48.14 RCW;
ix.(A) A corporation or other business entity that receives more than fifty percent of its total gross income for federal income tax purposes from finance leases. For purposes of this subsection, a "finance lease" means a lease that meets two requirements:
(I) It is the type of lease permitted to be made by national banks (see 12 U.S.C. Sec. 24(7) and (10), comptroller of the currency regulations, part 23, leasing (added by 56 C.F.R. Sec. 28314, June 20, 1991, effective July 22, 1991), and regulation Y of the federal reserve system 12 C.F.R. Part 225.25, as amended); and
(II) It is the economic equivalent of an extension of credit, i.e., the lease is treated by the lessor as a loan for federal income tax purposes. In no event does a lease qualify as an extension of credit where the lessor takes depreciation on such property for federal income tax purposes.
(B) For this classification to apply, the average of the gross income in the current tax year and immediately preceding two tax years must satisfy the more than fifty percent requirement;
x. Any other person or business entity, other than an insurance general agent licensed under chapter 48.17 RCW , an insurance business exempt from the margin tax under RCW 82.04.320, a broker as defined in RCW 18.85.011, a securities dealer or international investment management company taxable under RCW 82.04.290, that receives more than fifty percent of its gross receipts from activities that a person described in (c)(ii) through (vii) and (ix) of this subsection is authorized to transact.
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i. "Specified financial institution" means a financial institution that is a member of a consolidated financial institution group that reported on its consolidated financial statement for the previous calendar year annual net income of at least one billion dollars, not including net income attributable to noncontrolling interests, as the terms "net income" and "noncontrolling interest" are used in the consolidated financial statement.
ii. If financial institutions are no longer required to file consolidated financial statements, "specified financial institution" means any person that was subject to the additional tax in this section in at least two of the previous four calendar years.
The department must notify the fiscal committees of the legislature if financial institutions are no longer required to file consolidated financial statements.
To aid in the effective administration of the surcharge imposed in this section, the department may require a person believed to be a specified financial institution to disclose whether it is a member of a consolidated financial institution group and, if so, to identify all other members of its consolidated financial institution group. A person failing to comply with this subsection is deemed to have intended to evade tax payable under this section and is subject to the penalty in RCW 82.32.090(7) on any tax due under this section by the person and any financial institution affiliated with the person.
Taxes collected under this section must be deposited into the general fund.
1.
A surcharge is imposed upon every person engaging within this state in any business activity other than those persons and business activities specifically exempted under this section from the surcharge. This surcharge is equal to the gross income of the business multiplied by the rate of
0.25 percent. Except as otherwise provided in this section, this surcharge is in addition to all other taxes imposed in this chapter.
The surcharge imposed in this section does not apply to:
Any person subject to the surcharge imposed under RCW 82.04.299;
Any person whose gross income of the business subject to the surcharge imposed under subsection (1) of this section, for the immediately preceding calendar year, was less than one million dollars, unless (i) the person is affiliated with one or more other persons, and (ii) the aggregate gross income of the business subject to the surcharge imposed under subsection (1) of this section for all affiliated persons was greater than or equal to one million dollars for the immediately preceding calendar year;
Hospitals as defined in RCW 70.41.020, including any hospital that comes within the scope of chapter 71.12 RCW if the hospital is also licensed under chapter 70.41 RCW; or
Any business activity that, as of December 31, 2026, is not taxed under the catchall service and other activities classification. For purposes of this subsection (2)(d), "catchall service and other activities classification" means the tax classification codified in this section or successor statute that is applicable to all business activities not otherwise taxed explicitly under another provision of this chapter as of December 31, 2026.
The tax imposed in subsection (1) of this section includes, among others, and without limiting the scope hereof (whether or not title to materials used in the performance of such business passes to another by accession, confusion or other than by outright sale), persons engaged in the business of rendering any type of service which does not constitute a "sale at retail" or a "sale at wholesale." The value of advertising, demonstration, and promotional supplies and materials furnished to an agent by his or her principal or supplier to be used for informational, educational, and promotional purposes is not considered a part of the agent's remuneration or commission and is not subject to taxation under this section.
All of the revenues collected under subsection (1) of this section must be deposited into the workforce education investment account created in RCW 43.79.195.
(1)(a) Beginning with business activities occurring on or after April 1, 2020, in addition to the taxes imposed under RCW 82.04.290(2) and section 202 of this act, a workforce education investment surcharge is imposed on select advanced computing businesses. The surcharge is equal to the gross income of the business subject to the tax under RCW 82.04.290(2), multiplied by the rate of 1.22 percent.
All of the provisions contained in chapter 82.32 RCW shall have full force and application with respect to taxes imposed under the provisions of this chapter. Taxpayers submitting quarterly estimates of taxes due under section 202 of this act are subject to the provisions of chapter 82.32 RCW for any estimated payment that is substantially underpaid as provided in RCW 82.32.090(2) or not paid by the date due.
Except as otherwise provided in this title, payments of the taxes imposed under chapters 82.04, 82.08, 82.12, 82.14, and 82.16 RCW, along with reports and returns on forms prescribed by the department, are due monthly within twenty-five days after the end of the month in which the taxable activities occur. For taxpayers subject to the taxes imposed in section 202 of this act, reports and returns for those taxes are due annually as provided in subsection (3) of this section.
The department of revenue may relieve any taxpayer or class of taxpayers from the obligation of remitting monthly and may require the return to cover other longer reporting periods, but in no event may returns be filed for a period greater than one year. Except as provided in subsection (3) of this section, for these taxpayers, tax payments are due on or before the last day of the month next succeeding the end of the period covered by the return.
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For annual filers, tax payments, along with reports and returns on forms prescribed by the department, are due on or before April 15th of the year immediately following the end of the period covered by the return.
For taxpayers subject to the margin tax under section 202 of this act:
Reports and returns on forms prescribed by the department are due annually on or before April 15th of the year immediately following the end of the tax year covered by the return.
Estimated margin tax payments must be made for a tax year by taxpayers that owed $20,000 or more in the immediately preceding tax year or will owe $20,000 or more in tax due under section 202 of this act for that tax year.
(A) Estimated margin tax payments required in this subsection (3) are due quarterly on or before the last day of the month immediately following the end of the calendar quarter.
(B) For taxpayers that were engaged in business in this state during the entire immediately preceding tax year and filed a tax return for that tax year for taxes due under section 202 of this act, each estimated margin tax payment equals 25 percent of the taxpayer's total tax liability on that return. Upon a taxpayer's request, the department may allow a taxpayer to calculate its own estimated payment amount if the taxpayer certifies that it expects that its tax due under section 202 of this act for the current tax year to be at least 20 percent greater or less than its tax due under section 202 of this act for the previous tax year.
(C) For the first tax year of margin taxes due under section 202 of this act, or for taxpayers who were not engaged in business in this state during the entire immediately preceding tax year or who did not file a return for taxes due under section 202 of this act for that tax year, estimated payments equal 25 percent of the estimated tax liability under section 202 of this act for the current tax year as determined by the taxpayer.
(D) At least 30 days before estimated payments are due, the department must electronically notify registered taxpayers of their responsibility for making an estimated payment, the due date of the estimated payment, and, as applicable, the amount of estimated payment due.
(E) A taxpayer that does not make an estimated payment under this subsection (3)(b) by the date due or that substantially underpays their estimated payment is subject to applicable penalties under RCW 82.32.090.
(F) Any additional taxes due under section 202 of this act must be paid with the annual return due April 15th. If the tax due is overpaid, the department must issue a refund in accordance with RCW 82.32.060.
iii. This subsection (3)(b) does not apply to the surcharges in RCW 82.04.261, 82.04.285, 82.04.286, 82.04.290, 82.04.29004, and 82.04.299. Returns and payments for these surcharges must be reported and paid as otherwise provided in this section and, in the case of the surcharge on select advanced computing businesses, RCW 82.04.299.
The department of revenue may also require verified annual returns from any taxpayer, setting forth such additional information as it may deem necessary to correctly determine tax liability.
Notwithstanding subsections (1) and (2) of this section, the department may relieve any taxpayer of the requirement to file returns if the following conditions are met:
The taxpayer's value of products, gross proceeds of sales, or gross income of the business, from all business activities taxable under chapter 82.04 RCW, is less than $500,000 per year;
The taxpayer's gross income of the business from all activities taxable under chapter 82.16 RCW is less than twenty-four thousand dollars per tax year; and
The taxpayer is not required to collect or pay to the department of revenue any other tax or fee which the department is authorized to collect.
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Taxes imposed under chapter 82.08 or 82.12 RCW on taxable events that occur beginning January 1, 2019, through June 30, 2019, and payable by a consumer directly to the department are due, on returns prescribed by the department, by July 25, 2019.
This subsection (6) does not apply to the reporting and payment of taxes imposed under chapters 82.08 and 82.12 RCW:
On the retail sale or use of motor vehicles, vessels, or aircraft; or
By consumers who are engaged in business, unless the department has relieved the consumer of the requirement to file returns pursuant to subsection (5) of this section.
Except as otherwise provided in this chapter, interest applies to taxes that are not paid by the original due date even though the department has granted an extension as authorized under this chapter. However, the department may not assess penalties for late payment of any such tax that is paid in full by the extended due date.
For purposes of this section, "taxes" includes estimated taxes due under RCW 82.32.045.
If payment of any tax due on a return to be filed by a taxpayer is not received by the department of revenue by the due date, there is assessed a penalty of nine percent of the amount of the tax; and if the tax is not received on or before the last day of the month following the due date, there is assessed a total penalty of nineteen percent of the amount of the tax under this subsection; and if the tax is not received on or before the last day of the second month following the due date, there is assessed a total penalty of twenty-nine percent of the amount of the tax under this subsection. No penalty so added may be less than five dollars.
If the department of revenue determines that any tax or estimated tax payment due under RCW 82.32.045 has been substantially underpaid, there is assessed a penalty of five percent of the amount of the tax determined by the department to be due. If payment of any tax determined by the department to be due is not received by the department by the due date specified in the notice, or any extension thereof, including any estimated payment due under RCW 82.32.045 and billed to the taxpayer by the department, there is assessed a total penalty of fifteen percent of the amount of the tax under this subsection; and if payment of any tax determined by the department to be due is not received on or before the thirtieth day following the due date specified in the notice of tax due, or any extension thereof, including any estimated payment due under RCW 82.32.045 and billed to the taxpayer by the department, there is assessed a total penalty of twenty-five percent of the amount of the tax under this subsection. No penalty so added may be less than five dollars. As used in this section, "substantially underpaid" means that the taxpayer has paid less than eighty percent of the amount of tax determined by the department to be due for all of the types of taxes included in, and for the entire period of time covered by, the department's examination, and the amount of underpayment is at least one thousand dollars. In the case of an estimated payment due under RCW 82.32.045, "substantially underpaid" means that the taxpayer has paid less than 90 percent of the amount of estimated payment billed to the taxpayer, or when the taxpayer calculates the amount of its estimated payments, the aggregate amount of estimated payments for the tax year is less than 90 percent of the taxpayer's actual tax liability under section 202 of this act for that tax year.
If a warrant is issued by the department of revenue for the collection of taxes, increases, and penalties, there is added thereto a penalty of ten percent of the amount of the tax, but not less than ten dollars.
If the department finds that a taxpayer has engaged in any business or performed any act upon which a tax is imposed under this title and that taxpayer has not obtained from the department a registration certificate as required by RCW 82.32.030, the department must impose a penalty of five percent of the amount of tax due from that taxpayer for the period that the taxpayer was not registered as required by RCW 82.32.030. The department may not impose the penalty under this subsection (4) if a taxpayer who has engaged in business taxable under this title without first having registered as required by RCW 82.32.030, prior to any notification by the department of the need to register, obtains a registration certificate from the department.
If the department finds that a taxpayer has disregarded specific written instructions as to reporting or tax liabilities, or willfully disregarded the requirement to file returns or remit payment electronically, as provided by RCW 82.32.080, the department must add a penalty of ten percent of the amount of the tax that should have been reported and/or paid electronically or the additional tax found due if there is a deficiency because of the failure to follow the instructions. A taxpayer disregards specific written instructions when the department has informed the taxpayer in writing of the taxpayer's tax obligations and the taxpayer fails to act in accordance with those instructions unless, in the case of a deficiency, the department has not issued final instructions because the matter is under appeal pursuant to this chapter or departmental regulations. The department may not assess the penalty under this section upon any taxpayer who has made a good faith effort to comply with the specific written instructions provided by the department to that taxpayer. A taxpayer will be considered to have made a good faith effort to comply with specific written instructions to file returns and/or remit taxes electronically only if the taxpayer can show good cause, as defined in RCW 82.32.080, for the failure to comply with such instructions. A taxpayer will be considered to have willfully disregarded the requirement to file returns or remit payment electronically if the department has mailed or otherwise delivered the specific written instructions to the taxpayer on at least two occasions. Specific written instructions may be given as a part of a tax assessment, audit, determination, closing agreement, or other written communication, provided that such specific written instructions apply only to the taxpayer addressed or referenced on such communication. Any specific written instructions by the department must be clearly identified as such and must inform the taxpayer that failure to follow the instructions may subject the taxpayer to the penalties imposed by this subsection. If the department determines that it is necessary to provide specific written instructions to a taxpayer that does not comply with the requirement to file returns or remit payment electronically as provided in RCW 82.32.080, the specific written instructions must provide the taxpayer with a minimum of forty-five days to come into compliance with its electronic filing and/or payment obligations before the department may impose the penalty authorized in this subsection.
If the department finds that all or any part of a deficiency resulted from engaging in a disregarded transaction, as described in RCW 82.32.655(3), the department must assess a penalty of thirty-five percent of the additional tax found to be due as a result of engaging in a transaction disregarded by the department under RCW 82.32.655(2). The penalty provided in this subsection may be assessed together with any other applicable penalties provided in this section on the same tax found to be due, except for the evasion penalty provided in subsection (7) of this section. The department may not assess the penalty under this subsection if, before the department discovers the taxpayer's use of a transaction described under RCW 82.32.655(3), the taxpayer discloses its participation in the transaction to the department.
If the department finds that all or any part of the deficiency resulted from an intent to evade the tax payable hereunder, a further penalty of fifty percent of the additional tax found to be due must be added.
The penalties imposed under subsections (1) through (4) of this section can each be imposed on the same tax found to be due. This subsection does not prohibit or restrict the application of other penalties authorized by law.
The department may not impose the evasion penalty in combination with the penalty for disregarding specific written instructions or the penalty provided in subsection (6) of this section on the same tax found to be due.
For the purposes of this section, "return" means any document a taxpayer is required by the state of Washington to file, whether by paper or electronically, to satisfy or establish a tax or fee obligation that is administered or collected by the department, and that has a statutorily defined due date. "Return" includes any form a taxpayer must file to report an estimated margin tax payment as calculated by the taxpayer pursuant to RCW 82.32.045.
Every dealer shall be licensed as provided in RCW 9.41.110 and shall register with the department of revenue as provided in chapter 82.32 RCW.
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The legislature recognizes that some individuals in this state have a gambling problem or gambling disorder. Because the state promotes and regulates gambling through the activities of the state lottery commission, the Washington horse racing commission, and the Washington state gambling commission, the state has the responsibility to continue to provide resources for the support of services for problem gambling and gambling disorders.
The Washington state gambling commission, the Washington horse racing commission, and the state lottery commission shall jointly develop problem gambling and gambling disorder informational signs which include a toll-free hotline number for individuals with a gambling problem or gambling disorder. The signs shall be placed in the establishments of gambling licensees, horse racing licensees, and lottery retailers.
The Washington state gambling commission, the Washington horse racing commission, and the state lottery commission may also contract with other qualified entities to provide public awareness, training, and other services to ensure the intent of this section is fulfilled.
Individuals and families impacted by a gambling problem or gambling disorder will benefit from the availability of a uniform self-exclusion program where people may voluntarily exclude themselves from gambling at multiple gambling establishments by submitting one self-exclusion form to the state from one location for all gambling activities. Therefore, the Washington state gambling commission must establish a statewide self-exclusion program for all licensees. The commission has discretion in establishing the scope, process, and requirements of the self-exclusion program, including denying, suspending, or revoking an application, license, or permit. However, the initial program must comply with the following minimum requirements:
The program must allow persons to voluntarily exclude themselves from gambling at authorized gambling establishments that offer house-banked social card games;
The program must have a process for federally recognized Indian tribes or tribal enterprises that own gambling operations or facilities with class III gaming compacts to voluntarily participate in the self-exclusion program;
Any individual registered with the self-exclusion program created under this section is prohibited from participating in gambling activities associated with this program and forfeits all moneys and things of value obtained by the individual or owed to the individual by an authorized gambling establishment as a result of prohibited wagers or gambling activities. The commission may adopt rules for the forfeiture of any moneys or things of value, including wagers, obtained by an authorized gambling establishment while an individual is registered with the self-exclusion program created under this section.
Moneys and things of value forfeited under the self-exclusion program must be distributed to the problem gambling account created in RCW 41.05.751 and/or a charitable or nonprofit organization that provides problem gambling services or increases awareness about problem gambling pursuant to rules adopted by the commission; and
iv. The commission must adopt rules establishing the self-exclusion program by June 30, 2021.
e. An individual who participates in the self-exclusion program does not have a cause of action against the state of Washington, the commission, or any gambling establishment, its employees, or officers for any acts or omissions in processing or enforcing the requirements of the self-exclusion program, including a failure to prevent an individual from gambling at an authorized gambling establishment.
f. Any personal information collected, stored, or accessed under the self-exclusion program may only be used for the administration of the self-exclusion program and may not be disseminated for any purpose other than the administration of the self-exclusion program.
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During any period in which RCW 82.04.285 is in effect, the commission may not increase fees payable by licensees under its jurisdiction for the purpose of funding services for problem gambling and gambling disorder. Any fee imposed or increased by the commission, for the purpose of funding these services, before July 1, 2005, has no force and effect after July 1, 2005.
During any period in which RCW 82.04.285 is not in effect:
The commission, the Washington state horse racing commission, and the state lottery commission may contract for services, in addition to those authorized in subsection (1) of this section, to assist in providing for problem gambling and gambling disorder treatment; and
The commission may increase fees payable by licensees under its jurisdiction for the purpose of funding the problem gambling and gambling disorder services authorized in this section.
A person who sells, rents, or permits to be sold or rented, any video or computer game they know to be a violent video or computer game to any minor has committed a class 1 civil infraction as provided in RCW 7.80.120.
"Minor" means a person under seventeen years of age.
"Person" means a retailer engaged in the business of selling or renting video or computer games including any individual, partnership, corporation, or association who is required to collect retail sales tax under chapter 82.08 RCW.
"Violent video or computer game" means a video or computer game that contains realistic or photographic-like depictions of aggressive conflict in which the player kills, injures, or otherwise causes physical harm to a human form in the game who is depicted, by dress or other recognizable symbols, as a public law enforcement officer.
The workforce education investment accountability and oversight board is established. The board consists of seventeen members, as provided in this subsection:
Four members of the legislature consisting of the chairs and ranking minority members of the respective higher education and workforce development committees of the senate and house of representatives, ex officio; and
The following members appointed by the governor with the consent of the senate:
Five members representing the businesses described in RCW 82.04.299 or subject to the surcharge under RCW 82.04.290;
Two members representing labor organizations, one of which must have expertise in registered apprenticeships and training a high-demand workforce and one of which must represent faculty at the four-year institutions of higher education;
Two members representing the institutions of higher education, as defined in RCW 28B.10.016, one of which must be from the four-year sector and one of which must be from the community and technical college sector;
Two members representing students, one of which must be a community and technical college student;
One member representing the independent, not-for-profit higher education institutions; and
Except for ex officio and student members, board members shall hold their offices for a term of three years until their successors are appointed. Student board members shall hold one-year terms.
The board shall have two cochairs. One cochair shall be one of the chairs of the respective higher education and workforce development committees of the legislature and the other cochair shall be one of the board members representing the businesses described in RCW 82.04.299 or subject to the surcharge under RCW 82.04.290. The cochairs shall hold the position for a one-year term. The board members shall elect the cochairs annually.
Nine voting members of the board constitute a quorum for the transaction of business. The board shall meet four times a year.
Staff support for the board shall be provided by the workforce training and education coordinating board established in this chapter.
The purposes of the board are to:
Provide guidance and recommendations to the legislature on what workforce education priorities should be funded with the workforce education investment account; and
Ensure accountability that the workforce education investments funded with the workforce education investment account are producing the intended results and are effectively increasing student success and career readiness, such as by increasing retention, completion, and job placement rates.
The board shall consult data from the education data center established under RCW 43.41.400 and the workforce training and education coordinating board established under this chapter when reviewing and determining whether workforce education investments funded from the workforce education investment account are effectively increasing student success and career readiness.
The board shall report its recommendations to the appropriate committees of the legislature by August 1st of each year.
For the purposes of this section, "board" means the workforce education investment accountability and oversight board established in this section.
To aid general economic development and neighborhood revitalization, and to facilitate the cooperation of merchants, businesses, and residential property owners which assists trade, economic viability, and liveability, the legislature hereby authorizes all counties and all incorporated cities and towns, including unclassified cities and towns operating under special charters:
To establish, after a petition submitted by the operators responsible for sixty percent of the assessments by businesses and multifamily residential or mixed-use projects within the area, parking and business improvement areas, hereafter referred to as area or areas, for the following purposes:
The acquisition, construction or maintenance of parking facilities for the benefit of the area;
Decoration of any public place in the area;
Sponsorship or promotion of public events which are to take place on or in public places in the area;
Furnishing of music in any public place in the area;
Providing professional management, planning, and promotion for the area, including the management and promotion of retail trade activities in the area;
Providing maintenance and security for common, public areas; or
Providing transportation services for the benefit of the area.
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To levy special assessments on all businesses and multifamily residential or mixed-use projects within the area and specially benefited by a parking and business improvement area to pay in whole or in part the damages or costs incurred therein as provided in this chapter.
A lodging business may, but is not required to, collect any special assessment amount from its guests in the form of a separately stated charge per night on the sale of lodging taxable by the state under chapter 82.08 RCW. Such charges must be separately stated from the room rate on the invoice, bill of sale, or similar document provided by the lodging business to the guest. A lodging business that collects a special assessment from its guests as authorized under this subsection (2)(b) is deemed to be collecting the assessment amount from its guests as agent for the jurisdiction levying the special assessment. Such per night charges are not part of the selling price under RCW 82.08.010 for state and local sales tax purposes, nor are they part of the gross proceeds of sales of the lodging business for purposes of the margin tax imposed under chapter 82.04 RCW.
A city that imposes its business and occupation tax on professional employer services performed by a professional employer organization, regardless of the tax classification applicable to such services, must provide a deduction from the gross income of the business derived from performing professional employer services that is equal to the portion of the fee charged to a client that represents the actual cost of wages and salaries, benefits, workers' compensation, payroll taxes, withholding, or other assessments paid to or on behalf of a covered employee by the professional employer organization under a professional employer agreement.
For the purposes of this section, the definitions in RCW 82.04.540 apply.
Beginning in January 1984, and in January of every fourth year thereafter, the department of revenue must submit to the legislature prior to the regular session a listing of the amount of reduction for the current and next biennium in the revenues of the state or the revenues of local government collected by the state as a result of tax exemptions. The listing must include an estimate of the revenue lost from the tax exemption, the purpose of the tax exemption, the persons, organizations, or parts of the population which benefit from the tax exemption, and whether or not the tax exemption conflicts with another state program. The listing must include but not be limited to the following revenue sources:
Real and personal property tax exemptions under Title 84 RCW;
Business and occupation tax exemptions, deductions, and credits under chapter 82.04 RCW;
Retail sales and use tax exemptions under chapters 82.08, 82.12, and 82.14 RCW;
Public utility tax exemptions and deductions under chapter 82.16 RCW;
Food fish and shellfish tax exemptions under chapter 82.27 RCW;
Leasehold excise tax exemptions under chapter 82.29A RCW;
Motor vehicle and special fuel tax exemptions and refunds under chapter 82.38 RCW;
Aircraft fuel tax exemptions under chapter 82.42 RCW;
Motor vehicle excise tax exclusions under chapter 82.44 RCW;
Insurance premiums tax exemptions under chapter 48.14 RCW; and
Margin tax exemptions, deductions, credits, and exclusions under chapter 82.04 RCW.
The department of revenue must prepare the listing required by this section with the assistance of any other agencies or departments as may be required.
The department of revenue must present the listing to the ways and means committees of each house in public hearings.
Beginning in January 1984, and every four years thereafter the governor is requested to review the report from the department of revenue and may submit recommendations to the legislature with respect to the repeal or modification of any tax exemption. The ways and means committees of each house and the appropriate standing committee of each house must hold public hearings and take appropriate action on the recommendations submitted by the governor.
As used in this section, "tax exemption" means an exemption, exclusion, or deduction from the base of a tax; a credit against a tax; a deferral of a tax; or a preferential tax rate.
For purposes of the listing due in January 2012, the department of revenue does not have to prepare or update the listing with respect to any tax exemption that would not be likely to increase state revenue if the exemption was repealed or otherwise eliminated.
(1) The workforce education investment account is created in the state treasury. All revenues from the workforce investment surcharge created in RCW 82.04.299 and those revenues as specified under RCW 82.04.290(2)(c) must be deposited directly into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for higher education programs, higher education operations, higher education compensation, state-funded student aid programs, and workforce development including career connected learning as defined by RCW 28C.30.020. For the 2021-2023 fiscal biennium, expenditures from the account may be used for kindergarten through twelfth grade if used for career connected learning as provided for in chapter 406, Laws of 2019.
The department must adopt criteria for the approved motion picture competitiveness program with the sole purpose of revitalizing the state's economic, cultural, and educational standing in the national and international market of motion picture production. Rules adopted by the department shall allow the program, within the established criteria, to provide funding assistance only when it captures economic opportunities for Washington's communities and businesses and shall only be provided under a contractual arrangement with a private entity. In establishing the criteria, the department shall consider:
The additional income and tax revenue to be retained in the state for general purposes;
The creation and retention of family-wage jobs which provide health insurance and payments into a retirement plan;
The impact of motion picture projects to maximize in-state labor and the use of in-state film production and film postproduction companies;
The impact upon the local economies and the state economy as a whole, including multiplier effects;
The intangible impact on the state and local communities that comes with motion picture projects;
The regional, national, and international competitiveness of the motion picture filming industry;
The revitalization of the state as a premier venue for motion picture production and national television commercial campaigns;
Partnerships with the private sector to bolster film production in the state and serve as an educational and cultural purpose for its citizens;
The vitality of the state's motion picture industry as a necessary and critical factor in promoting the state as a premier tourist and cultural destination;
Giving preference to additional seasons of television series that have previously qualified and to motion picture productions that tell stories of marginalized communities; and
Other factors the department may deem appropriate for the implementation of this chapter.
The board of directors shall create and administer an account for carrying out the purposes of subsection (4) of this section.
The board's goal must be to commit at least 20 percent of funding assistance to motion picture productions located or filmed in rural communities and 20 percent of funding assistance to motion picture productions that tell stories of marginalized communities.
Money received by the approved motion picture competitiveness program shall be used only for:
Health insurance and payments into a retirement plan, and other costs associated with film production;
Staff and related expenses to maintain the program's proper administration and operation;
Supporting the growth and development of the Washington state film industry through career connected learning, workforce development, and business development with a focus on better supporting people from marginalized or rural communities; and
Developing resources to facilitate filming in rural communities including, but not limited to, economic development grants for filming, training for film liaisons, information about film permitting processes, and grants to support the expansion of location database collateral.
Except as provided otherwise in subsections (8) and (9) of this section, maximum funding assistance from the approved motion picture competitiveness program is limited to an amount up to thirty percent of the total actual investment in the state of at least:
Five hundred thousand dollars for a single motion picture produced in Washington state; or
One hundred fifty thousand dollars for a television commercial associated with a national or regional advertisement campaign produced in Washington state.
Except as provided otherwise in subsections (8) and (9) of this section, maximum funding assistance from the approved motion picture competitiveness program is limited to an amount up to thirty-five percent of the total actual investment of at least three hundred thousand dollars per episode produced in Washington state. A minimum of six episodes of a series must be produced to qualify under this subsection. A maximum of up to thirty percent of the total actual investment from the approved motion picture competitiveness program may be awarded to an episodic series of less than six episodes.
With respect to costs associated with nonstate labor for motion pictures and episodic services, funding assistance from the approved motion picture competitiveness program is limited to an amount up to fifteen percent of the total actual investment used for costs associated with nonstate labor. To qualify under this subsection, the production must have a labor force of at least eighty-five percent of Washington residents. The board may establish additional criteria to maximize the use of in-state labor.
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The approved motion picture competitiveness program may allocate an annual aggregate of no more than ten percent of the qualifying contributions by the program to provide funding support for filmmakers who are Washington residents, new forms of production, and emerging technologies.
Up to thirty percent of the actual investment for a motion picture with an actual investment lower than that of motion pictures under subsection (5)(a) of this section; or
Up to thirty percent of the actual investment of an interactive motion picture intended for multiplatform exhibition and distribution.
Subsections (5) and (6) of this section do not apply to this subsection.
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In addition to the maximum funding assistance established in subsections (5) and (6) of this section, up to a 10 percent enhancement award on a motion picture production's state investment must be given for motion pictures: (i) Located or filmed in a rural community; or (ii) that tell stories of marginalized communities.
Total actual investment requirements established in subsections (5) and (6) of this section apply to this subsection (9).
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Funding assistance must include up to $3,000,000 for small motion picture productions produced in Washington state, subject to subsection (11) of this section, that are creatively driven by Washington residents. To qualify, the small motion picture production must have at least two Washington residents in any combination of the following positions: Writer, director, producer, or lead actor. An entity seeking funding assistance for a small motion picture production must demonstrate that the amount of the total actual investment for the production is less than $1,000,000.
Maximum funding assistance and total actual investment requirements, established in subsections (5), (6), (7), (8), and (9) of this section apply to small motion picture productions. The department shall adopt rules as necessary to implement this subsection (10).
Funding assistance approval must be determined by the approved motion picture competitiveness program within a maximum of thirty calendar days from when the application is received, if the application is submitted after August 15, 2006. For small motion picture productions, the approved motion picture competitiveness program, after determining a conditional approval of the production, shall hold the production's funding assistance in reserve while the entity seeking funding assistance for the production secures financing for the remainder of the budget. Once the entity seeking funding assistance for the production demonstrates to the program that it has secured the necessary financing, the program shall certify the small motion picture production as approved. If the entity seeking funding assistance cannot demonstrate within six months from the date of conditional approval that it has secured the total budget, the program must make the funding assistance available to other eligible applicants with funding assistance approval.
By December 31, 2022, and annually thereafter, the department, on behalf of the board, must report to the legislature on the approved motion picture competitiveness program. This report may include information required in the survey established in RCW 43.365.040. At a minimum, the report must include an annual list of recipients awarded financial assistance from the prior year with total estimated production costs, locations of each production, and the board's progress towards the goal of at least 20 percent of its funding assistance provided to motion picture productions located or filmed in rural communities and 20 percent of its funding assistance provided to motion picture productions that tell stories of marginalized communities. The report must also include information on workforce development, career connected learning, and business development activities, including whether they have been scaled up in size from the previous year and how they are meeting the goal of supporting people from marginalized communities.
The approved motion picture competitiveness program must allocate funds for training and job placement for marginalized communities as follows:
For fiscal years 2023 and 2024, a minimum of $500,000 for each fiscal year; and
For each fiscal year on or after July 1, 2024, a minimum of $750,000.
As to insurers, other than title insurers and taxpayers under RCW 48.14.0201, the taxes imposed by this title are in lieu of all other taxes, except as otherwise provided in this section.
Subsection (1) of this section does not apply with respect to:
Taxes on real and tangible personal property;
Excise taxes on the sale, purchase, use, or possession of (i) real property; (ii) tangible personal property; (iii) extended warranties; (iv) services, including digital automated services as defined in RCW 82.04.192; and (v) digital goods and digital codes as those terms are defined in RCW 82.04.192; and
The tax imposed in section 202 of this act as applied to public and nonprofit hospitals.
For the purposes of this section, the term "taxes" includes taxes imposed by the state or any county, city, town, municipal corporation, quasi‑municipal corporation, or other political subdivision.
A joint self-insurance program approved in accordance with this chapter is exempt from insurance premium taxes, from fees assessed under chapter 48.02 RCW, from chapters 48.32 and 48.32A RCW, from taxes imposed under chapter 82.04 RCW, and from any assigned risk plan or joint underwriting association otherwise required by law. This section does not apply to and no exemption is provided for insurance companies issuing policies to cover program risks, nor does it apply to or provide an exemption for third-party administrators, surplus line brokers, or insurance producers serving the self-insurance program.
A joint self-insurance program approved in accordance with this chapter is exempt from insurance premium taxes, fees assessed under chapter 48.02 RCW, chapters 48.32 and 48.32A RCW, taxes imposed under chapter 82.04 RCW, and any assigned risk plan or joint underwriting association otherwise required by law. This section does not apply to, and no exemption is provided for, insurance companies issuing policies to cover program risks, and does not apply to or provide an exemption for third-party administrators or insurance producers serving the joint self-insurance program.
A joint self-insurance program approved in accordance with this chapter is exempt from insurance premium taxes, fees assessed under chapters 48.02, 48.32, and 48.32A RCW, taxes imposed under chapter 82.04 RCW, and any assigned risk plan or joint underwriting association otherwise required by law. This section does not apply to or provide exemptions for insurance companies issuing policies to cover program risks and third-party administrators or insurance producers serving the joint self-insurance program.
A joint self-insurance program approved in accordance with this chapter is exempt from insurance premium taxes, fees assessed under chapter 48.02 RCW, chapters 48.32 and 48.32A RCW, taxes imposed under chapter 82.04 RCW, and any assigned risk plan or joint underwriting association otherwise required by law. This section does not apply to, and no exemption is provided for, insurance companies issuing policies to cover program risks, and does not apply to or provide an exemption for third-party administrators or insurance producers serving the joint self-insurance program.
A significant commercial airplane manufacturer is subject to an aerospace apprenticeship utilization rate of one and five-tenths percent of its qualified apprenticeable workforce in Washington by July 1, 2026, or five years after the effective date of the 0.357 percent rate authorized under RCW 82.04.260(11)(e) or the date that the 0.357 percent rate authorized under RCW 82.04.260(11)(e) would have taken effect pursuant to RCW 82.04.260 and 82.04.2602 as those statutes existed on December 31, 2026, whichever is later, as determined by the department of labor and industries.
The aerospace industry in Washington, excluding a significant commercial airplane manufacturer, is subject to an aerospace apprenticeship utilization rate of one and five-tenths percent of its qualified apprenticeable workforce in Washington by July 1, 2026, or five years after the effective date of the 0.357 percent rate authorized under RCW 82.04.260(11)(e) or the date that the 0.357 percent rate authorized under RCW 82.04.260(11)(e) would have taken effect pursuant to RCW 82.04.260 and 82.04.2602 as those statutes existed on December 31, 2026, whichever is later, as determined by the department of labor and industries.
Aerospace employers must report relevant occupation data related to the qualified apprenticeable workforce to the department of labor and industries.
The department of labor and industries shall report the aerospace apprenticeship utilization rate to the appropriate committees of the legislature annually beginning October 1, 2024.
The department of labor and industries shall determine aerospace apprenticeship utilization rates under this section based on the framework developed under RCW 49.04.210 and using occupational data reported to the department of labor and industries and/or the employment security department. For data reported to the department of labor and industries, the department of labor and industries shall determine the form and manner in which occupational data is reported, consistent with the framework developed under RCW 49.04.210, and may adopt rules to ensure full participation within the industry necessary to implement the requirements of this section. The department of labor and industries, consulting with the department of revenue, may also require additional information on the annual tax performance report under RCW 82.32.534. The department of labor and industries may adopt rules to ensure full participation within the industry and necessary to implement the requirements of this section.
For the purposes of this section, the following definitions apply.
"Aerospace employer" means any person that qualifies for the rate under RCW 82.04.260(11)(e) or the date that the 0.357 percent rate authorized under RCW 82.04.260(11)(e) would have taken effect pursuant to RCW 82.04.260 and 82.04.2602 as those statutes existed on December 31, 2026, with twenty-five or more employees in positions determined to be qualified occupations by the Washington state apprenticeship and training council according to this chapter directly applicable to the production of commercial aircraft.
"Qualified apprenticeable workforce" means all occupations approved by the Washington state apprenticeship and training council according to this chapter directly applicable to the production of commercial aircraft.
"Significant commercial airplane manufacturer" means a manufacturer of commercial airplanes with at least fifty thousand full-time employees in Washington as of January 1, 2021.
Except as provided in subsection (3) of this section, no regional transit authority may initiate a transaction authorized under RCW 81.112.300 after June 30, 2007.
The termination of authority to enter into transactions after June 30, 2007, does not affect the validity of any transactions entered into under RCW 81.112.300.
A regional transit authority may enter into a transaction in accordance with RCW 81.112.300 after June 30, 2007, to replace or refinance a transaction that relates to specific obligations entered into on or before that date and that has terminated, or is, under the terms of the replacement or refinance, to terminate, before the final stated term of that transaction. The exemptions from taxes provided by RCW 82.08.834, 82.12.834, 82.29A.134, 84.36.605, 35.21.756, 82.04.050, 82.45.010, and 35.21.755 apply to the replacement or refinance transactions.
A regional transit authority, or public corporation or entity created under RCW 81.112.320, that undertakes a transaction authorized by RCW 81.112.300, shall provide to the state finance committee, or its financial advisor, at the state finance committee's discretion, a copy of all material agreements executed in connection with the transaction within three months of the closing of the transaction and shall make a report to the state finance committee, the president of the senate, and the speaker of the house of representatives on transactions authorized by RCW 81.112.300. The report must include the amount of the transactions, the expected savings or losses resulting from the transactions, the transaction costs, including fees and detailed pricing information, the risks associated with the transaction, and any other information the regional transit authority determines relevant. The report must be submitted within six months of the closing of each transaction.
A taxpayer that has a substantial nexus under RCW 82.04.067 is obligated to pay all applicable taxes and fees imposed on that taxpayer's business activity, including any taxes and fees enacted after December 31, 2018. For purposes of this section, "taxes and fees" means any monetary exaction, regardless of its label, that is imposed directly on a taxpayer engaging in business and that the department is responsible for collecting.
Unless the context clearly requires otherwise, the definitions set forth in this chapter apply throughout this chapter.
(1)(a) "Sale at retail" or "retail sale" means every sale of tangible personal property (including articles produced, fabricated, or imprinted) to all persons irrespective of the nature of their business and including, among others, without limiting the scope hereof, persons who install, repair, clean, alter, improve, construct, or decorate real or personal property of or for consumers other than a sale to a person who:
As used in RCW 82.04.050 and including for the purposes of the taxes imposed in chapter 82.08 RCW in addition to the taxes imposed in this chapter, the term "services rendered in respect to" means, in the context of constructing, building, repairing, improving, and decorating buildings or other structures, those services that are directly related to the constructing, building, repairing, improving, and decorating of buildings or other structures and that are performed by a person who is responsible for the performance of the constructing, building, repairing, improving, or decorating activity. The term does not include services such as engineering, architectural, surveying, flagging, accounting, legal, consulting, land development or management, or administrative services provided to the consumer of, or person responsible for performing, the constructing, building, repairing, improving, or decorating services.
A contract or agreement under which a person is responsible for both services that are not defined as a retail sale or wholesale sale and also constructing, building, repairing, improving, or decorating activities that are defined as a retail sale or wholesale sale is subject to the tax that applies to the predominant activity under the contract or agreement.
Unless otherwise provided by law, a contract or agreement under which a person is responsible for activities that are not defined as a retail sale or wholesale sale, and a subsequent contract or agreement under which the same person is responsible for constructing, building, repairing, improving, or decorating activities defined as a retail sale or wholesale sale, shall not be combined and taxed as a retail sale or wholesale sale if at the time of the first contract or agreement it was not contemplated by the parties, as evidenced by the facts, that the same person would be awarded both contracts.
The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
"Land development or management" means site identification, zoning, permitting, and other preconstruction regulatory services provided to the consumer of the constructing, building, repairing, improving, or decorating services. This includes, but is not limited to, acting as an owner's representative during any design or construction period, including recommending a contractor, monitoring the budget and schedule, approving invoices, and interacting on the behalf of the consumer with the person who has control over the work itself or responsible for the performance of the work.
"Responsible for the performance" means that the person is obligated to perform the activities, either personally or through a third party. A person who reviews work for a consumer, retailer, or wholesaler but does not supervise or direct the work is not responsible for the performance of the work. A person who is financially obligated for the work, such as a bank, but who does not have control over the work itself is not responsible for the performance of the work.
2.
For purposes of this section, "precious metal bullion" means any precious metal which has been put through a process of smelting or refining, including, but not limited to, gold, silver, platinum, rhodium, and palladium, and which is in such state or condition that its value depends upon its contents and not upon its form. For purposes of this section, "monetized bullion" means coins or other forms of money manufactured from gold, silver, or other metals and heretofore, now, or hereafter used as a medium of exchange under the laws of this state, the United States, or any foreign nation, but does not include coins or money sold to be manufactured into jewelry or works of art.
"Tuition fee" includes library, laboratory, health service and other special fees, and amounts charged for room and board by an educational institution when the property or service for which such charges are made is furnished exclusively to the students or faculty of such institution. "Educational institution," as used in this section, means only those institutions created or generally accredited as such by the state and includes educational programs that such educational institution cosponsors with a nonprofit organization, as defined by the internal revenue code Sec. 501(c)(3), if such educational institution grants college credit for coursework successfully completed through the educational program, or an approved branch campus of a foreign degree-granting institution in compliance with chapter 28B.90 RCW, and in accordance with RCW 82.04.4332 or defined as a degree-granting institution under RCW 28B.85.010(3) and accredited by an accrediting association recognized by the United States secretary of education, and offering to students an educational program of a general academic nature or those institutions which are not operated for profit and which are privately endowed under a deed of trust to offer instruction in trade, industry, and agriculture, but not including specialty schools, business colleges, other trade schools, or similar institutions.
"Consumer" means the following:
1.
"Semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, and compound semiconductor wafers.
1.
"Cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for orderly marketing.
"Storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are received for storage for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance.
"Periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication.
1.
Silicon solar wafers, silicon solar cells, thin film solar devices, solar grade silicon, or compound semiconductor solar wafers are "semiconductor materials" for the purposes of RCW 82.08.9651 and 82.12.9651.
The definitions in this subsection apply throughout this section.
"Compound semiconductor solar wafers" means a semiconductor solar wafer composed of elements from two or more different groups of the periodic table.
"Module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells and providing a single direct current electrical output.
"Photovoltaic cell" means a device that converts light directly into electricity without moving parts.
"Silicon solar cells" means a photovoltaic cell manufactured from a silicon solar wafer.
"Silicon solar wafers" means a silicon wafer manufactured for solar conversion purposes.
"Solar energy system" means any device or combination of devices or elements that rely upon direct sunlight as an energy source for use in the generation of electricity.
"Solar grade silicon" means high‑purity silicon used exclusively in components of solar energy systems using photovoltaic modules to capture direct sunlight. "Solar grade silicon" does not include silicon used in semiconductors.
"Stirling converter" means a device that produces electricity by converting heat from a solar source utilizing a stirling engine.
"Thin film solar devices" means a nonparticipating substrate on which various semiconducting materials are deposited to produce a photovoltaic cell that is used to generate electricity.
This section expires July 1, 2032.
The provision of internet access is subject to tax under RCW 82.04.290and section 202(1) of this act.
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Except as provided in (b) of this subsection, "internet" and "internet access" have the same meaning as those terms are defined in the federal internet tax freedom act, Title 47 U.S.C. Sec. 151 note, as existing on July 1, 2009.
"Internet access" does not include telecommunications service purchased, used, or sold by a person that provides a service that enables users to connect to the internet to access content, information, or other services offered over the internet, to the extent such telecommunications service is purchased, used, or sold: (i) To provide such service; or (ii) to otherwise enable users to access content, information, or other services offered over the internet.
Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
1.
"Qualifying blood bank" means a blood bank that qualifies as an exempt organization under 26 U.S.C. 501(c)(3) as existing on June 10, 2004, is registered pursuant to 21 C.F.R., part 607 as existing on June 10, 2004, and whose primary business purpose is the collection, preparation, and processing of blood. "Qualifying blood bank" does not include a comprehensive cancer center that is recognized as such by the national cancer institute.
"Qualifying tissue bank" means a tissue bank that qualifies as an exempt organization under 26 U.S.C. 501(c)(3) as existing on June 10, 2004, is registered pursuant to 21 C.F.R., part 1271 as existing on June 10, 2004, and whose primary business purpose is the recovery, processing, storage, labeling, packaging, or distribution of human bone tissue, ligament tissue and similar musculoskeletal tissues, skin tissue, heart valve tissue, or human eye tissue. "Qualifying tissue bank" does not include a comprehensive cancer center that is recognized as such by the national cancer institute.
"Qualifying blood and tissue bank" is a bank that qualifies as an exempt organization under 26 U.S.C. 501(c)(3) as existing on June 10, 2004, is registered pursuant to 21 C.F.R., part 607 and part 1271 as existing on June 10, 2004, and whose primary business purpose is the collection, preparation, and processing of blood, and the recovery, processing, storage, labeling, packaging, or distribution of human bone tissue, ligament tissue and similar musculoskeletal tissues, skin tissue, and heart valve tissue. "Qualifying blood and tissue bank" does not include a comprehensive cancer center that is recognized as such by the national cancer institute.
"Sheltered workshop" means a nonprofit group training home as defined in RCW 71A.22.020 or other nonprofit organization, which receives income from the department of social and health services for the cost of care, maintenance, support, and training of persons with developmental disabilities, including activities that are performed for the primary purpose of (1) providing gainful employment or rehabilitation services to persons with disabilities as an interim step in the rehabilitation process for those who cannot be readily absorbed in the competitive labor market or during such time as employment opportunities for them in the competitive labor market do not exist; or (2) providing evaluation and work adjustment services for persons with disabilities.
"Comprehensive cancer center" means a cancer center that has written confirmation that it is recognized by the national cancer institute as a comprehensive cancer center and that qualifies as an exempt organization under 26 U.S.C. Sec. 501(c)(3) as existing on July 1, 2006.
2.
"Client" means any person who enters into a professional employer agreement with a professional employer organization. For purposes of this subsection (2), "person" has the same meaning as "buyer" in RCW 82.08.010.
"Coemployer" means either a professional employer organization or a client.
"Coemployment relationship" means a relationship which is intended to be an ongoing relationship rather than a temporary or project-specific one, wherein the rights, duties, and obligations of an employer which arise out of an employment relationship have been allocated between coemployers pursuant to a professional employer agreement and applicable state law. In such a coemployment relationship:
The professional employer organization is entitled to enforce only such employer rights and is subject to only those obligations specifically allocated to the professional employer organization by the professional employer agreement or applicable state law;
The client is entitled to enforce those rights and obligated to provide and perform those employer obligations allocated to such client by the professional employer agreement and applicable state law; and
The client is entitled to enforce any right and obligated to perform any obligation of an employer not specifically allocated to the professional employer organization by the professional employer agreement or applicable state law.
"Covered employee" means an individual having a coemployment relationship with a professional employer organization and a client who meets all of the following criteria: (a) The individual has received written notice of coemployment with the professional employer organization, and (b) the individual's coemployment relationship is pursuant to a professional employer agreement. Individuals who are officers, directors, shareholders, partners, and managers of the client are covered employees to the extent the professional employer organization and the client have expressly agreed in the professional employer agreement that such individuals would be covered employees and provided such individuals meet the criteria of this subsection and act as operational managers or perform day-to-day operational services for the client.
"Professional employer agreement" means a written contract by and between a client and a professional employer organization that provides:
For the coemployment of covered employees; and
For the allocation of employer rights and obligations between the client and the professional employer organization with respect to the covered employees.
"Professional employer organization" means any person engaged in the business of providing professional employer services. The following shall not be deemed to be professional employer organizations or the providing of professional employer services for purposes of this section:
Arrangements wherein a person, whose principal business activity is not entering into professional employer arrangements and which does not hold itself out as a professional employer organization, shares employees with a commonly owned company within the meaning of section 414(b) and (c) of the Internal Revenue Code of 1986, as amended;
Independent contractor arrangements by which a person assumes responsibility for the product produced or service performed by such person or his or her agents and retains and exercises primary direction and control over the work performed by the individuals whose services are supplied under such arrangements; or
Providing staffing services.
"Professional employer services" means the service of entering into a coemployment relationship with a client in which all or a majority of the employees providing services to a client or to a division or work unit of a client are covered employees.
"Staffing services" means services consisting of a person:
Recruiting and hiring its own employees;
Finding other organizations that need the services of those employees;
Assigning those employees on a temporary basis to perform work at or services for the other organizations to support or supplement the other organizations' workforces, or to provide assistance in special work situations such as, but not limited to, employee absences, skill shortages, seasonal workloads, or to perform special assignments or projects, all under the direction and supervision of the customer; and
Customarily attempting to reassign the employees to other organizations when they finish each assignment.
A person is engaged in the business of providing qualifying international investment management services, if:
Such person is engaged primarily in the business of providing investment management services;
At least ten percent of the gross income of such person is derived from providing investment management services to any of the following:
Collective investment funds commercially domiciled, as defined in RCW 82.56.010, outside the United States; or
Collective investment funds with at least ten percent of their investments located outside the United States;
More than twenty-five percent of such person's employees are located in this state; and
Such person is a member of an affiliated group that collectively has:
Ten or more offices located in at least eight foreign countries;
At least five hundred full-time employees worldwide;
Worldwide gross revenue of more than four hundred million dollars during the entire current or immediately preceding calendar year; and
Average assets under management of more than two hundred billion dollars during the entire current or immediately preceding calendar year.
An affiliate of a person engaged in the business of providing qualifying international investment management services is deemed to also be engaged in the business of providing qualifying international investment management services if the affiliate:
Is primarily engaged in providing portfolio management, fund administration, fund distribution, or transfer agent services, or any combination of these activities, to, either directly or indirectly through such affiliate's affiliated group, any of the following:
Collective investment funds commercially domiciled, as defined in RCW 82.56.010, outside the United States; or
Collective investment funds with at least ten percent of their investments located outside the United States; and
Satisfies the requirement under subsection (1)(c) of this section.
The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
a.
"Collective investment fund" includes:
i. A mutual fund or other regulated investment company, as defined in section 851(a) of the internal revenue code of 1986, as amended;
ii. An "investment company," as that term is used in section 3(a) of the investment company act of 1940, as well as any entity that would be an investment company for this purpose but for the exemptions contained in section 3(c) (1) or (11);
iii. An "employee benefit plan," which includes any plan, trust, commingled employee benefit trust, or custodial arrangement that is subject to the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq., or that is described in sections 125, 401, 403, 408, 457, and 501(c)(9) and (17) through (23) of the internal revenue code of 1986, as amended, or a similar plan maintained by a state or local government, or a plan, trust, or custodial arrangement established to self-insure benefits required by federal, state, or local law;
iv. A fund maintained by a tax-exempt organization, as defined in section 501(c)(3) of the internal revenue code of 1986, as amended, for operating, quasi-endowment, or endowment purposes;
v. Funds that are established for the benefit of such tax-exempt organizations, such as charitable remainder trusts, charitable lead trusts, charitable annuity trusts, or other similar trusts; or
vi. Collective investment funds similar to those described in (a)(i) through (v) of this subsection (3) created under the laws of a foreign jurisdiction.
v. "Investment management services" means managing the collective assets of a collective investment fund by engaging, either directly or indirectly through such person's affiliated group, in all of the following activities: (i) Portfolio management; (ii) fund administration; (iii) fund distribution; and (iv) transfer agent services.
Investments are located outside the United States if the underlying assets in which the investment constitutes a beneficial interest reside or are created, issued or held outside the United States.
If before January 1, 2027, a person engaged in the business of providing international investment management services no longer meets the Washington state employment eligibility requirements under subsection (1)(c) of this section, then an amount equal to the entire economic benefit accruing to the person in the current and immediately prior nine consecutive calendar years, or the consecutive years since July 1, 2019, whichever is less, as a result of the preferential tax rate under RCW 82.04.290(1) is immediately due and payable.
The department must assess interest, but not penalties, on the amounts due under this section. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW and accrue until the taxes for which a tax preference has been used are repaid.
For the purposes of RCW 82.08.031 and 82.12.031, the term "artistic or cultural organization" means an organization that is organized and operated exclusively for the purpose of providing artistic or cultural exhibitions, presentations, or performances or cultural or art education programs, as defined in subsection (2) of this section, for viewing or attendance by the general public. The organization must be a nonprofit corporation under chapter 24.03A RCW and managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or by a corporation sole under chapter 24.12 RCW. In addition, to qualify for deduction or exemption from taxation under RCW 82.08.031 and 82.12.031, the corporation must satisfy the following conditions:
No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;
Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the state;
Assets of the corporation must be irrevocably dedicated to the activities for which the exemption is granted and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation which also would be entitled to the exemption;
The corporation must be duly licensed or certified when licensing or certification is required by law or regulation;
The amounts received that qualify for exemption must be used for the activities for which the exemption is granted;
Services must be available regardless of race, color, national origin, or ancestry; and
The director of revenue must have access to its books in order to determine whether the corporation is exempt from taxes.
The term "artistic or cultural exhibitions, presentations, or performances or cultural or art education programs" includes and is limited to:
An exhibition or presentation of works of art or objects of cultural or historical significance, such as those commonly displayed in art or history museums;
A musical or dramatic performance or series of performances; or
An educational seminar or program, or series of such programs, offered by the organization to the general public on an artistic, cultural, or historical subject.
The term "health or social welfare organization" means an organization, including any community action council, which renders health or social welfare services as defined in subsection (2) of this section, which is a domestic or foreign nonprofit corporation under chapter 24.03A RCW and which is managed by a governing board of not less than eight individuals none of whom is a paid employee of the organization or which is a corporation sole under chapter 24.12 RCW. Health or social welfare organization does not include a corporation providing professional services as authorized in chapter 18.100 RCW. In addition, a corporation must satisfy the following conditions:
No part of its income may be paid directly or indirectly to its members, stockholders, officers, directors, or trustees except in the form of services rendered by the corporation in accordance with its purposes and bylaws;
Salary or compensation paid to its officers and executives must be only for actual services rendered, and at levels comparable to the salary or compensation of like positions within the public service of the state;
Assets of the corporation must be irrevocably dedicated to providing health or social welfare services and, on the liquidation, dissolution, or abandonment by the corporation, may not inure directly or indirectly to the benefit of any member or individual except a nonprofit organization, association, or corporation that is also a health or social welfare organization;
The corporation must be duly licensed or certified where licensing or certification is required by law or regulation;
The amounts received for providing health or social welfare services must be used for those activities;
Services must be available regardless of race, color, national origin, or ancestry; and
The director of revenue must have access to its books in order to determine whether the corporation meets the conditions of this section.
The term "health or social welfare services" includes and is limited to:
Mental health, drug, or alcoholism counseling or treatment;
Family counseling;
Health care services;
Therapeutic, diagnostic, rehabilitative, or restorative services for the care of the sick, aged, or physically, developmentally, or emotionally-disabled individuals;
Activities which are for the purpose of preventing or ameliorating juvenile delinquency or child abuse, including recreational activities for those purposes;
Care of orphans or foster children;
Day care of children;
Employment development, training, and placement;
Legal services to the indigent;
Weatherization assistance or minor home repair for low-income homeowners or renters;
Assistance to low-income homeowners and renters to offset the cost of home heating energy, through direct benefits to eligible households or to fuel vendors on behalf of eligible households;
Community services to low-income individuals, families, and groups, which are designed to have a measurable and potentially major impact on causes of poverty in communities of the state; and
Temporary medical housing, as defined in RCW 82.08.997, if the housing is provided only:
While the patient is receiving medical treatment at a hospital required to be licensed under RCW 70.41.090 or at an outpatient clinic associated with such hospital, including any period of recuperation or observation immediately following such medical treatment; and
By a person that does not furnish lodging or related services to the general public.
The tax levied by RCW 82.08.020 does not apply to a grantee's receipt of a qualifying grant that is exempt from margin tax under RCW 82.04.767.
Nothing in this section may be construed to:
Imply that the tax levied by RCW 82.08.020 applies to any circumstance not described in subsection (1) of this section; or
Provide an exemption from the tax levied by RCW 82.08.020 for the grantee's use of a qualifying grant to acquire products in a transaction meeting the definition of "retail sale" in RCW 82.04.050.
For purposes of this section, the following definitions apply:
"Grantee" means the recipient of a qualifying grant.
"Product" means the same as in RCW 82.32.023.
"Qualifying grant" means the same as in RCW 82.04.767.
The tax levied by RCW 82.08.020 does not apply to the sales of medical supplies, chemicals, or materials to an organ procurement organization . This exemption does not apply to the sale of construction materials, office equipment, building equipment, administrative supplies, or vehicles.
The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
"Chemical" means any catalyst, solvent, water, acid, oil, or other additive that physically or chemically interacts with blood, bone, or tissue.
"Materials" means any item of tangible personal property including, but not limited to, bags, packs, collecting sets, filtering materials, testing reagents, antisera, and refrigerants, used or consumed in performing research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue.
"Medical supplies" means any item of tangible personal property, including any repair and replacement parts for such tangible personal property, used by an organ procurement organization for the purpose of performing research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue. The term includes tangible personal property used to:
Provide preparatory treatment of blood, bone, or tissue;
Control, guide, measure, tune, verify, align, regulate, test, or physically support blood, bone, or tissue; or
Protect the health and safety of employees or others present during research on, procuring, testing, processing, storing, packaging, distributing, or using blood, bone, or tissue.
"Organ procurement organization" means a qualified organ procurement organization under 42 U.S.C. Sec. 273(b) in effect January 1, 2022, that is exempt from federal income tax.
For purposes of this chapter and chapters 82.04 and 82.12 RCW, a marketplace facilitator is deemed to be an agent of any marketplace seller making retail sales through the marketplace facilitator's marketplace.
Beginning October 1, 2018, marketplace facilitators subject to a tax collection obligation under RCW 82.08.052 (1) or (2) must collect and remit to the department retail sales tax on all taxable retail sales made or facilitated by the marketplace facilitator, whether in its own right or as an agent of a marketplace seller, regardless of whether the marketplace seller is subject to a tax collection obligation under RCW 82.08.052 (1) or (2). Beginning January 1, 2020, the collection obligation of a marketplace facilitator under this chapter also applies to any other taxes and fees, as defined under RCW 82.02.260, that are imposed on a retail sale made or facilitated by the marketplace facilitator, whether in its own right or as an agent of a marketplace seller, regardless of whether the marketplace seller has a tax collection obligation under RCW 82.08.052 (1) or (2).
In addition to other applicable recordkeeping requirements, the department may require a marketplace facilitator to provide or make available to the department any information the department determines is reasonably necessary to enforce the provisions of this chapter and chapter 82.13 RCW. Such information may include documentation of sales made by marketplace sellers through the marketplace facilitator's marketplace. The department may prescribe by rule the form and manner for providing this information.
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Beginning July 1, 2019, to ensure that marketplace sellers have the necessary information to timely and accurately file their excise tax returns with the department pursuant to RCW 82.32.045, a marketplace facilitator must, at a minimum, provide each of its marketplace sellers with access, through a written report or other means, to gross sales information for all Washington sales made as an agent of the marketplace seller under this section during the immediately preceding month. Marketplace facilitators must provide such access within fifteen calendar days following the end of each month.
If a marketplace seller does not receive the gross sales information for all Washington sales through a marketplace facilitator, as required under (a) of this subsection (4), the marketplace seller may determine its margin tax liability under section 202 of this act based on a reasonable method of estimating Washington sales as may be required or approved by the department.
For purposes of this subsection, "Washington sales" means any sale sourced to this state under RCW 82.32.730, regardless of whether the sale is a retail sale.
If a marketplace facilitator has fully complied with the requirements of subsection (4)(a) of this section, the marketplace facilitator is relieved of liability under this chapter and chapter 82.12 RCW for failure to collect the correct amount of tax to the extent that the marketplace facilitator can show to the department's satisfaction that the error was due to incorrect information given to the marketplace facilitator by the marketplace seller, unless the marketplace facilitator and marketplace seller are affiliated persons. Where the marketplace facilitator is relieved of liability under this subsection (5), the marketplace seller is solely liable for the amount of uncollected tax due.
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Subject to the limits in (b) and (c) of this subsection (6), a marketplace facilitator that has fully complied with the requirements of subsection (4)(a) of this section is relieved of liability under this chapter and chapter 82.12 RCW for the failure to collect tax on taxable retail sales to the extent that the marketplace facilitator can show to the department's satisfaction that:
The taxable retail sale was made through the marketplace facilitator's marketplace;
The taxable retail sale was made solely as the agent of a marketplace seller, and the marketplace facilitator and marketplace seller are not affiliated persons; and
The failure to collect sales tax was not due to an error in sourcing the sale under RCW 82.32.730.
Liability relief for a marketplace facilitator under (a) of this subsection (6) for a calendar year is limited as follows:
For calendar year 2018, the liability relief may not exceed ten percent of the total tax due under this chapter and chapter 82.12 RCW on taxable retail sales facilitated by the marketplace facilitator as agent of a marketplace seller and sourced to this state under RCW 82.32.730 during the same calendar year.
For calendar year 2019, the liability relief may not exceed five percent of the total tax due under this chapter and chapter 82.12 RCW on taxable retail sales by the marketplace facilitator as agent of a marketplace seller and sourced to this state under RCW 82.32.730 during the same calendar year.
The provisions of this subsection (6) do not apply to retail sales made after December 31, 2019.
For purposes of this subsection (6), a retail sale is deemed to be facilitated by a marketplace facilitator when the marketplace facilitator either:
Accepts the order for the product;
Communicates to the marketplace seller the buyer's offer to purchase the product;
Accepts the buyer's payment for the product; or
Delivers or arranges for delivery of the product.
Where the marketplace facilitator is relieved of liability under this subsection (6), the marketplace seller is also relieved of liability for the amount of uncollected tax due, subject to the limitations in subsection (7) of this section.
The department may by rule determine the manner in which a taxpayer may claim the liability relief provided under this subsection.
Except as otherwise provided in this section, a marketplace seller obligated to collect the taxes imposed under this chapter and chapter 82.12 RCW is not required to collect such taxes on all taxable retail sales through a marketplace operated by a marketplace facilitator if the marketplace seller has obtained documentation from the marketplace facilitator indicating that the marketplace facilitator is registered with the department and will collect all applicable taxes due under this chapter and chapter 82.12 RCW on all taxable retail sales made on behalf of the marketplace seller through the marketplace operated by the marketplace facilitator. The documentation required by this subsection (7) must be provided in a form and manner prescribed by or acceptable to the department. This subsection (7) does not relieve a marketplace seller from liability for uncollected taxes due under this chapter or chapter 82.12 RCW resulting from a marketplace facilitator's failure to collect the proper amount of tax due when the error was due to incorrect information given to the marketplace facilitator by the marketplace seller.
No class action may be brought against a marketplace facilitator in any court of this state on behalf of purchasers arising from or in any way related to an overpayment of sales or use tax collected by the marketplace facilitator, regardless of whether that claim is characterized as a tax refund claim. Nothing in this subsection affects a purchaser's right to seek a refund from the department as provided under chapter 82.32 RCW.
Nothing in this section affects the obligation of any purchaser to remit sales or use tax and any other applicable taxes and fees, as to any applicable taxable transaction in which the seller or the seller's agent does not collect and remit sales tax.
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From October 1, 2018, through December 31, 2019, a seller is obligated to collect and remit to the department the taxes imposed under this chapter, except as otherwise provided in RCW 82.08.0531(2) and this subsection, if the seller, in the current or immediately preceding calendar year, had:
More than one hundred thousand dollars of cumulative gross receipts from this state;
Subject to the limitation in (c)(ii) of this subsection (1), two hundred or more separate transactions for the delivery of products into this state; or
Subject to the limitation in RCW 82.32.531, physical presence in this state under RCW 82.04.067.
Cumulative gross receipts counting toward the threshold in (a)(i) of this subsection include a person's gross income of the business from all retail sales made by the seller and sourced to this state under RCW 82.32.730.
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Transactions counting toward the threshold in (a)(ii) of this subsection include all retail sales transactions made by the seller and sourced to this state under RCW 82.32.730.
From March 14, 2019, a seller is relieved of the obligation to collect the taxes imposed under this chapter and remit those taxes to the department if that obligation arose solely based on the threshold in (a)(ii) of this subsection.
For purposes of the threshold in (a)(ii) of this subsection "transaction" means an agreement to furnish a product or products for consideration, and includes a sale as defined in RCW 82.04.040.
The term "transaction" does not include an agreement if the agreement is canceled or rescinded before any of the products are delivered to the buyer or other recipient designated by the buyer, the seller retains no part of the consideration from the buyer, and the seller did not collect from the buyer any tax imposed or authorized under this title.
With regard to agreements requiring multiple payments by the consumer, such as a lease, rental, or installment sale, such agreements count as a single transaction for purposes of this subsection, regardless of the number of payments required under the agreement. However, any modification of such an agreement that provides for additional payments is counted as an additional transaction.
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Subject to (b) and (c) of this subsection (1), for a marketplace facilitator, receipts and transactions counting toward the thresholds in (a)(i) and (ii) of this subsection include, in addition to the cumulative gross receipts and separate transactions of its own sales, the cumulative gross receipts and separate transactions from sales by all marketplace sellers through the marketplace facilitator's marketplace, including marketplace sellers that are not obligated to collect the taxes under this chapter pursuant to the provisions of this section.
For a purchase made by one consumer through a marketplace facilitator, where the purchase involves sales by multiple marketplace sellers, the purchase is deemed to be one transaction for the marketplace facilitator and one transaction apiece for each marketplace seller.
Beginning January 1, 2020, a seller with a substantial nexus with this state under RCW 82.04.067 is obligated to collect and remit to the department the taxes imposed under this chapter.
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For purposes of this section, the following definitions apply:
i.
"Gross income of the business" has the same meaning as provided in RCW 82.04.080.
ii. "Product" has the same meaning as provided in RCW 82.32.023.
b. The definitions in RCW 82.13.010 apply to this section through June 30, 2019.
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A seller whose obligation to collect the taxes imposed under this chapter arises after October 1, 2018, must begin collecting taxes imposed under this chapter as follows:
For a remote seller, on the first day of the first calendar month that is at least thirty days from the date that the remote seller becomes required under subsection (1) or (2) of this section to collect the taxes imposed under this chapter.
For a seller that has a physical presence in this state, immediately upon establishing a tax collection obligation under subsection (1)(a)(iii) or (2) of this section.
Nothing in this subsection (4) affects the ongoing tax collection obligation of any seller that was required, or elected, to collect the taxes imposed under this chapter on or before October 1, 2018.
This section is subject to RCW 82.32.762.
The tax imposed by RCW 82.08.020 does not apply to sales defined as a sale at retail and retail sale under RCW 82.04.050 (3)(g) or (15), by a nonprofit youth organization, to members of the organization; and the tax does not apply to physical fitness classes provided by a local government.
"Nonprofit youth organization" means a nonprofit organization engaged in character building of youth that is exempt from property tax under RCW 84.36.030.
The tax levied by RCW 82.08.020 shall not apply to sales of materials and supplies directly used in the packing of fresh perishable horticultural products for farmers either as an agent or an independent contractor.
The tax imposed by RCW 82.08.020 does not apply to sales of standard financial information to qualifying international investment management companies or persons affiliated with a qualifying international investment management company. The exemption provided in this section applies regardless of whether the standard financial information is provided to the buyer in a tangible format or on a tangible storage medium or as a digital product transferred electronically.
Sellers making tax-exempt sales under this section must obtain an exemption certificate from the buyer in a form and manner prescribed by the department. The seller must retain a copy of the exemption certificate for the seller's files. In lieu of an exemption certificate, a seller may capture the relevant data elements as allowed under the streamlined sales and use tax agreement. For sellers who electronically file their taxes, the department must provide a separate tax reporting line for exemption amounts claimed under this section.
A buyer may not continue to claim the exemption under this section once the buyer has purchased standard financial information during the current calendar year with an aggregate total selling price in excess of fifteen million dollars and an exemption has been claimed under this section or RCW 82.12.207 for such standard financial information. The fifteen million dollar limitation under this subsection does not apply to any other exemption under this chapter that applies to standard financial information. Sellers are not responsible for ensuring a buyer's compliance with the fifteen million dollar limitation under this subsection. Sellers may not be assessed for uncollected sales tax on a sale to a buyer claiming an exemption under this section after having exceeded the fifteen million dollar limitation under this subsection, except as provided in RCW 82.08.050 (4) and (5).
The definitions in this subsection and RCW 82.04.293 apply throughout this section unless the context clearly requires otherwise.
"Qualifying international investment management company" means a person who would be eligible for the tax rate in RCW 82.04.290(1) were that statute still in effect.
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"Standard financial information" means financial data, facts, or information, or financial information services, not generated, compiled, or developed only for a single customer. Standard financial information includes, but is not limited to, financial market data, bond ratings, credit ratings, and deposit, loan, or mortgage reports.
For purposes of this subsection (4)(b), "financial market data" means market pricing information, such as for securities, commodities, and derivatives; corporate actions for publicly and privately traded companies, such as dividend schedules and reorganizations; corporate attributes, such as domicile, currencies used, and exchanges where shares are traded; and currency information.
This section expires July 1, 2031.
The tax levied by RCW 82.08.020 does not apply to sales, to a printer or publisher, of computer equipment, including repair parts and replacement parts for such equipment, when the computer equipment is used primarily in the printing or publishing of any printed material, or to sales of or charges made for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the computer equipment. This exemption applies only to computer equipment not otherwise exempt under RCW 82.08.02565.
A person taking the exemption under this section must keep records necessary for the department to verify eligibility under this section. This exemption is available only when the purchaser provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
The definitions in this subsection (3) apply throughout this section, unless the context clearly requires otherwise.
"Computer" has the same meaning as in RCW 82.04.215.
"Computer equipment" means a computer and the associated physical components that constitute a computer system, including monitors, keyboards, printers, modems, scanners, pointing devices, and other computer peripheral equipment, cables, servers, and routers. "Computer equipment" also includes digital cameras and computer software.
"Computer software" has the same meaning as in RCW 82.04.215.
"Primarily" means greater than fifty percent as measured by time.
"Printer or publisher" means a personengaging in the business of printing materials or of publishing newspapers, periodicals, or magazines as those terms are defined in RCW 82.04.214 and 82.04.280.
"Computer equipment" does not include computer equipment that is used primarily for administrative purposes including but not limited to payroll processing, accounting, customer service, telemarketing, and collection. If computer equipment is used simultaneously for administrative and nonadministrative purposes, the administrative use must be disregarded during the period of simultaneous use for purposes of determining whether the computer equipment is used primarily for administrative purposes.
Wholesalers or third-party warehousers who own or operate warehouses or grain elevators and retailers who own or operate distribution centers, and who have paid the tax levied by RCW 82.08.020 on:
Material-handling and racking equipment, and labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment; or
Construction of a warehouse or grain elevator, including materials, and including service and labor costs,
are eligible for an exemption in the form of a remittance. The amount of the remittance is computed under subsection (3) of this section and is based on the state share of sales tax.
For purposes of this section and RCW 82.12.820:
"Agricultural products" has the meaning given in RCW 82.04.213;
"Construction" means the actual construction of a warehouse or grain elevator that did not exist before the construction began. "Construction" includes expansion if the expansion adds at least two hundred thousand square feet of additional space to an existing warehouse or additional storage capacity of at least one million bushels to an existing grain elevator. "Construction" does not include renovation, remodeling, or repair;
"Department" means the department of revenue;
"Distribution center" means a warehouse that is used exclusively by a retailer solely for the storage and distribution of finished goods to retail outlets of the retailer. "Distribution center" does not include a warehouse at which retail sales occur;
"Finished goods" means tangible personal property intended for sale by a retailer or wholesaler. "Finished goods" does not include:
Agricultural products stored by wholesalers, third-party warehouses, or retailers if the storage takes place on the land of the person who produced the agricultural product;
Logs, minerals, petroleum, gas, or other extracted products stored as raw materials or in bulk; or
Cannabis, useable cannabis, or cannabis-infused products;
"Grain elevator" means a structure used for storage and handling of grain in bulk;
"Material-handling equipment and racking equipment" means equipment in a warehouse or grain elevator that is primarily used to handle, store, organize, convey, package, or repackage finished goods. The term includes tangible personal property with a useful life of one year or more that becomes an ingredient or component of the equipment, including repair and replacement parts. The term does not include equipment in offices, lunchrooms, restrooms, and other like space, within a warehouse or grain elevator, or equipment used for nonwarehousing purposes. "Material-handling equipment" includes but is not limited to: Conveyers, carousels, lifts, positioners, pick-up-and-place units, cranes, hoists, mechanical arms, and robots; mechanized systems, including containers that are an integral part of the system, whose purpose is to lift or move tangible personal property; and automated handling, storage, and retrieval systems, including computers that control them, whose purpose is to lift or move tangible personal property; and forklifts and other off-the-road vehicles that are used to lift or move tangible personal property and that cannot be operated legally on roads and streets. "Racking equipment" includes, but is not limited to, conveying systems, chutes, shelves, racks, bins, drawers, pallets, and other containers and storage devices that form a necessary part of the storage system;
"Person" has the meaning given in RCW 82.04.030;
"Retailer" means a person who makes "sales at retail" as defined in chapter 82.04 RCW of tangible personal property;
"Square footage" means the product of the two horizontal dimensions of each floor of a specific warehouse. The entire footprint of the warehouse must be measured in calculating the square footage, including space that juts out from the building profile such as loading docks. "Square footage" does not mean the aggregate of the square footage of more than one warehouse at a location or the aggregate of the square footage of warehouses at more than one location;
k.
"Warehouse" means an enclosed building or structure in which finished goods are stored. A warehouse building or structure may have more than one storage room and more than one floor. Office space, lunchrooms, restrooms, and other space within the warehouse and necessary for the operation of the warehouse are considered part of the warehouse as are loading docks and other such space attached to the building and used for handling of finished goods. Landscaping and parking lots are not considered part of the warehouse. A storage yard is not a warehouse, nor is a building in which manufacturing takes place; and
l. "Wholesaler" means a person who makes "sales at wholesale" as defined in chapter 82.04 RCW of tangible personal property, but "wholesaler" does not include a farmer who makes sales at wholesale of agricultural products.The definitions in RCW 82.04.060 and 82.04.213 apply to this subsection (2)(l).
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A person claiming an exemption from state tax in the form of a remittance under this section must pay the tax imposed by RCW 82.08.020. The buyer may then apply to the department for remittance of all or part of the tax paid under RCW 82.08.020. For grain elevators with bushel capacity of one million but less than two million, the remittance is equal to fifty percent of the amount of tax paid. For warehouses with square footage of two hundred thousand or more and for grain elevators with bushel capacity of two million or more, the remittance is equal to one hundred percent of the amount of tax paid for qualifying construction, materials, service, and labor, and fifty percent of the amount of tax paid for qualifying material-handling equipment and racking equipment, and labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment.
The department must determine eligibility under this section based on information provided by the buyer and through audit and other administrative records. The buyer must on a quarterly basis submit an information sheet, in a form and manner as required by the department by rule, specifying the amount of exempted tax claimed and the qualifying purchases or acquisitions for which the exemption is claimed. The buyer must retain, in adequate detail to enable the department to determine whether the equipment or construction meets the criteria under this section: Invoices; proof of tax paid; documents describing the material-handling equipment and racking equipment; location and size of warehouses and grain elevators; and construction invoices and documents.
The department must on a quarterly basis remit exempted amounts to qualifying persons who submitted applications during the previous quarter.
Warehouses, grain elevators, and material-handling equipment and racking equipment for which an exemption, credit, or deferral has been or is being received under chapter 82.60, 82.62, or 82.63 RCW or RCW 82.08.02565 or 82.12.02565 are not eligible for any remittance under this section. Warehouses and grain elevators upon which construction was initiated before May 20, 1997, are not eligible for a remittance under this section.
The lessor or owner of a warehouse or grain elevator is not eligible for a remittance under this section unless the underlying ownership of the warehouse or grain elevator and the material-handling equipment and racking equipment vests exclusively in the same person, or unless the lessor by written contract agrees to pass the economic benefit of the remittance to the lessee in the form of reduced rent payments.
The tax levied by RCW 82.08.020 does not apply to a sale of any of the following items made at a camp or conference center conducted on property exempt from property tax under RCW 84.36.030 (1), (2), or (3):
Lodging, conference and meeting rooms, camping facilities, parking, and similar licenses to use real property;
Food and meals; and
Books, tapes, and other products, including books and other products that are transferred electronically, that are available exclusively to the participants at the camp, conference, or meeting and are not available to the public at large.
The tax levied by RCW 82.08.020 does not apply to charges made for labor and services rendered in respect to the constructing of new buildings used for the manufacturing of semiconductor materials, to sales of tangible personal property that will be incorporated as an ingredient or component of such buildings during the course of the constructing, or to labor and services rendered in respect to installing, during the course of constructing, building fixtures not otherwise eligible for the exemption under RCW 82.08.02565(2)(b). The exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files.
To be eligible under this section the manufacturer or processor for hire must meet the following requirements for an eight-year period, such period beginning the day the new building commences commercial production, or a portion of tax otherwise due will be immediately due and payable pursuant to subsection (3) of this section:
The manufacturer or processor for hire must maintain at least seventy-five percent of full employment at the new building for which the exemption under this section is claimed.
Before commencing commercial production at a new facility the manufacturer or processor for hire must meet with the department to review projected employment levels in the new buildings. The department, using information provided by the taxpayer, must make a determination of the number of positions that would be filled at full employment. This number must be used throughout the eight-year period to determine whether any tax is to be repaid. This information is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
In those situations where a production building in existence on the effective date of this section will be phased out of operation during which time employment at the new building at the same site is increased, the manufacturer or processor for hire must maintain seventy-five percent of full employment at the manufacturing site overall.
No application is necessary for the tax exemption. The person is subject to all the requirements of chapter 82.32 RCW. A person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
If the employment requirement is not met for any one calendar year, one-eighth of the exempt sales and use taxes will be due and payable by April 1st of the following year. The department must assess interest to the date the tax was imposed, but not penalties, on the taxes for which the person is not eligible.
The exemption applies to new buildings, or parts of buildings, that are used exclusively in the manufacturing of semiconductor materials, including the storage of raw materials and finished product.
For the purposes of this section:
"Commencement of commercial production" is deemed to have occurred when the equipment and process qualifications in the new building are completed and production for sale has begun.
"Full employment" is the number of positions required for full capacity production at the new building, for positions such as line workers, engineers, and technicians.
"Semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips.
No exemption may be taken after the expiration date of this section, however all of the eligibility criteria and limitations are applicable to any exemptions claimed before that date.
This section expires January 1, 2024, unless the contingency in RCW 82.32.790(2) occurs.
The tax levied by RCW 82.08.020 does not apply to sales of gases and chemicals used by a manufacturer or processor for hire in the production of semiconductor materials. This exemption is limited to gases and chemicals used in the production process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the production process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For the purposes of this section, "semiconductor materials" has the meaning provided in RCW 82.04.2404 and 82.04.294.
A person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
Any person who has claimed the exemption under this section must reimburse the department for fifty percent of the amount of the tax preference under this section, if the number of persons employed by the person claiming the tax preference is less than ninety percent of the person's three-year employment average for the three years immediately preceding the year in which the exemption is claimed.
This section expires December 1, 2028.
The tax levied by RCW 82.08.020 does not apply to sales of gases and chemicals used by a manufacturer or processor for hire in the manufacturing of semiconductor materials. This exemption is limited to gases and chemicals used in the manufacturing process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the manufacturing process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For the purposes of this section, "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips.
A person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
This section expires January 1, 2024, unless the contingency in RCW 82.32.790(2) occurs.
The tax imposed by RCW 82.08.020 does not apply to :
The sale of tangible personal property in export commerce; or
The wholesale sale of tangible personal property in import commerce, but only when the wholesale sale is:
A sale of unroasted coffee beans; or
Between a parent company and its wholly owned subsidiary.
Tangible personal property is in import commerce while the property is in the process of import transportation. Except as provided in (a) through (c) of this subsection, property is in the process of import transportation from the time the property begins its transportation at a point outside of the United States until the time that the property is delivered to the buyer in this state. Property is also in the process of import transportation if it is merely flowing through this state on its way to a destination in some other state or country. However, property is no longer in the process of import transportation when the property is:
Put to actual use in any state, territory, or possession of the United States for any purpose;
Resold by the importer or any other person after the property has arrived in this state or any other state, territory, or possession of the United States, regardless of whether the property is in its original unbroken package or container; or
Processed, handled, or otherwise stopped in transit for a business purpose other than shipping needs, if the processing, handling, or other stoppage of transit occurs within the United States, including any of its possessions or territories, or the territorial waters of this state or any other state, regardless of whether the processing, handling, or other stoppage of transit occurs within a foreign trade zone.
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Tangible personal property is in export commerce when the seller delivers the property to:
The buyer at a destination in a foreign country;
A carrier consigned to and for transportation to a destination in a foreign country;
The buyer at shipside or aboard the buyer's vessel or other vehicle of transportation under circumstances where it is clear that the process of exportation of the property has begun; or
The buyer in this state if the property is capable of being transported to a foreign destination under its own power, the seller files a shipper's export declaration with respect to the property listing the seller as the exporter, and the buyer immediately transports the property directly to a destination in a foreign country. This subsection (3)(a)(iv) does not apply to sales of motor vehicles as defined in RCW 46.04.320.
The exemption under this subsection (3) applies with respect to property delivered to the buyer in this state if, at the time of delivery, there is a certainty of export, and the process of exportation has begun. The process of exportation has not begun if the property is merely in storage awaiting shipment, even though there is reasonable certainty that the property will be exported. The intention to export, as evidenced, for example, by financial and contractual relationships does not indicate certainty of export. The process of exportation begins when the property starts its final and certain continuous movement to a destination in a foreign country.
Persons claiming an exemption under this section must keep and maintain records for the period required by RCW 82.32.070 establishing their right to the exemption.
The tax levied by RCW 82.08.020 does not apply to the use of medical supplies, chemicals, or materials by an organ procurement organization . The definitions of organ procurement organization, medical supplies, chemicals, and materials in RCW 82.08.02807 apply to this section. This exemption does not apply to the use of construction materials, office equipment, building equipment, administrative supplies, or vehicles.
The provisions of this chapter do not apply with respect to the use of materials and supplies directly used in the packing of fresh perishable horticultural products for farmers, either as an agent or an independent contractor.
The provisions of this chapter do not apply with respect to the use of gases and chemicals used by a manufacturer or processor for hire in the manufacturing of semiconductor materials. This exemption is limited to gases and chemicals used in the manufacturing process to grow the product, deposit or grow permanent or sacrificial layers on the product, to etch or remove material from the product, to anneal the product, to immerse the product, to clean the product, and other such uses whereby the gases and chemicals come into direct contact with the product during the manufacturing process, or uses of gases and chemicals to clean the chambers and other like equipment in which such processing takes place. For purposes of this section, "semiconductor materials" means silicon crystals, silicon ingots, raw polished semiconductor wafers, compound semiconductors, integrated circuits, and microchips.
A person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534. No application is necessary for the tax exemption. The person is subject to all of the requirements of chapter 82.32 RCW.
This section expires January 1, 2024, unless the contingency in RCW 82.32.790(2) occurs.
The department must administer and adopt rules as may be necessary to enforce and administer the state and county 911 excise taxes imposed or authorized by this chapter. Chapter 82.32 RCW, with the exception of RCW 82.32.045, 82.32.145, and 82.32.380, applies to the administration, collection, and enforcement of the state and county 911 excise taxes.
The state and county 911 excise taxes imposed or authorized by this chapter, along with reports and returns on forms prescribed by the department, are due at the same time the taxpayer reports other taxes under RCW 82.32.045 on the combined excise tax return. If no other taxes are reported under RCW 82.32.045 on the combined excise tax return, the taxpayer must remit tax on an annual basis in accordance with RCW 82.32.045.
The department may relieve any taxpayer or class of taxpayers from the obligation of remitting monthly and may require the return to cover other longer reporting periods, but in no event may returns be filed for a period greater than one year.
The state and county 911 excise taxes imposed or authorized by this chapter are in addition to any taxes imposed upon the same persons under chapters 82.08, 82.12, and 82.14 RCW.
Returns must be filed electronically using the department's online tax filing service or other method of electronic reporting as the department may authorize as provided in RCW 82.32.080.
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Gross Vehicle Weight
Incremental Cost Amount
Maximum Credit Amount
Per Vehicle
Maximum Annual Credit
Per Vehicle Class
Up to 14,000 pounds
75% of incremental cost
$25,000
$2,000,000
14,001 to 26,500 pounds
75% of incremental cost
$50,000
$2,000,000
Above 26,500 pounds
75% of incremental cost
$100,000
$2,000,000
ii. A person who is taxable under this chapter is allowed a credit against the tax imposed in this chapter for up to 50 percent of the cost to purchase alternative fuel vehicle infrastructure, tangible personal property that will become a component of alternative fuel vehicle infrastructure, and installation and construction of alternative fuel vehicle infrastructure, but excluding the cost of property acquisition and site improvement related to the installation of alternative fuel vehicle infrastructure. The credit is subject to a maximum annual credit amount of $2,000,000.
b. On September 1st of each year, any unused credits from any category identified in (a) of this subsection must be made available to applicants applying for credits under any other category identified in (a) of this subsection, subject to the maximum annual and total credit amounts identified in this subsection. The credit established in this section is subject to a maximum annual credit amount of $6,000,000, and a maximum total credit amount of $32,500,000 beginning July 15, 2015.
c. The credit provided in (a)(i) of this subsection is available for the lease of a vehicle. The credit amount for a leased vehicle is equal to the credit in (a)(i) of this subsection multiplied by the lease reduction factor. The person claiming the credit for a leased vehicle must be the lessee as identified in the lease contract.
A person who is taxable under this chapter is allowed, subject to the maximum annual credit per category in subsection (1)(a) of this section, a credit against the tax imposed in this chapter for the lesser of $25,000 or 50 percent of the costs of converting a commercial vehicle to be principally powered by a clean alternative fuel with a United States environmental protection agency certified conversion.
The total credits under subsection (1)(a)(i) of this section may not exceed the lesser of $250,000 or 25 vehicles per person per calendar year.
4.
Credits are available on a first-in-time basis.
a. The department must disallow any credits, or portion thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed $6,000,000. The department must provide notification on its website monthly on the amount of credits that have been applied for, the amount issued, and the amount remaining before the statewide annual limit is reached. In addition, the department must provide written notice to any person who has applied to claim tax credits in excess of the limitation in this subsection.
b. The department must disallow any credits, or portion thereof, that would cause the total amount of credits claimed beginning July 15, 2015, under this section to exceed $32,500,000. The department must provide notification on its website monthly on the total amount of credits that have been applied for, the amount issued, and the amount remaining before the statewide limit is reached. In addition, the department must provide written notice to any person who has applied to claim tax credits in excess of the limitation in this subsection.
For the purposes of the limits provided in this section, a credit must be counted against such limits for the calendar year in which the credit is earned.
To claim a credit under this section a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department. No refunds may be granted for credits under this section.
To claim a credit under this section, the person applying must:
Complete an application for the credit which must include:
The name, business address, and tax identification number of the applicant;
A quote or unexecuted copy of the purchase requisition or order for the vehicle, infrastructure, infrastructure components, infrastructure construction, or infrastructure installation;
The type of alternative fuel to be used by the vehicle or supported by the infrastructure;
The incremental cost of the alternative fuel system for vehicle credits;
The anticipated delivery date of the vehicle, the anticipated delivery date of the infrastructure or infrastructure components, the anticipated construction completion date of the infrastructure, or the anticipated installation completion date of the infrastructure;
The estimated annual fuel use of the vehicle in the anticipated duties or the estimated annual fuel to be supplied by the infrastructure;
The gross weight of each vehicle for vehicle credits;
For leased vehicles, a copy of the lease contract that includes the gross capitalized cost, residual value, and name of the lessee; and
ix. Any other information deemed necessary by the department to support administration or reporting of the program.
Within 15 days of notice of credit availability from the department, provide notice of intent to claim the credit including:
A copy of the order for the vehicle or infrastructure-related item, including the total cost for the vehicle or infrastructure-related item;
The anticipated delivery date of the vehicle or infrastructure or infrastructure component, which must be within one year of acceptance of the credit;
The anticipated construction or installation completion date of the infrastructure, which must be within two years of acceptance of the credit; and
Any other information deemed necessary by the department to support administration or reporting of the program.
Provide final documentation within 30 days of receipt of the vehicle or infrastructure or infrastructure components or of completion of construction or installation of the infrastructure, including:
A copy of the final invoice for the vehicle or infrastructure-related items;
A copy of the factory build sheet or equivalent documentation;
The vehicle identification number of each vehicle;
The incremental cost of the alternative fuel system for vehicle credits;
Attestations signed by both the seller and purchaser of the vehicle attesting that the incremental cost of the alternative fuel system includes only the costs necessary for the vehicle to run on alternative fuel and no other vehicle options, equipment, or costs; and
A person applying for credit under subsection (7) of this section may apply for multiple vehicles on the same application, but the application must include the required information for each vehicle included in the application. A separate application is required for infrastructure-related items, but all infrastructure-related items at a single location may be included in a single application provided the required information for each infrastructure-related item is included in the application.
To administer the credits, the department must, at a minimum:
Provide notification on its website monthly of the amount of credits that have been applied for, claimed, and the amount remaining before the statewide annual limit and total limit are reached;
Within 15 days of receipt of the application, notify persons applying of the availability of tax credits in the year in which the vehicles or infrastructure applied for are anticipated to be delivered, constructed, or installed;
Within 15 days of receipt of the notice of intent to claim the tax credit, notify the applicant of the approval, denial, or missing information in their notice; and
Within 15 days of receipt of final documentation, review the documentation and notify the person applying of the acceptance of their final documentation.
If a person fails to supply the information as required in subsection (7) of this section, the department must deny the application.
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Taxpayers are only eligible for a credit under this section based on:
Sales or leases of new commercial vehicles and qualifying used commercial vehicles with propulsion units that are principally powered by a clean alternative fuel;
Costs to modify a commercial vehicle, including sales of tangible personal property incorporated into the vehicle and labor or service expenses incurred in modifying the vehicle, to be principally powered by a clean alternative fuel; or
Sales of alternative fuel vehicle infrastructure or infrastructure components, or the cost of construction or installation of alternative fuel vehicle infrastructure.
A credit is earned when the purchaser or the lessee takes receipt of the qualifying commercial vehicle or infrastructure-related item, the vehicle conversion is complete, or the construction or installation of the infrastructure is complete.
The definitions in this subsection apply to this section:
"Alternative fuel vehicle infrastructure" means structures, machinery, and equipment necessary and integral to support a clean alternative fuel vehicle.
"Auto transportation company" means any corporation or person owning, controlling, operating, or managing any motor propelled vehicle, used in the business of transporting persons for compensation over public highways within the state of Washington, between fixed points or over a regular route. For the purposes of this section, "auto transportation company" also includes the following categories of providers irrespective of whether they provide service between fixed points or over a regular route: "Private, nonprofit transportation provider" as defined in RCW 81.66.010, "charter party carrier" as defined in RCW 81.70.020, and paratransit service providers who primarily provide special needs transportation to individuals with disabilities and the elderly.
"Clean alternative fuel" means electricity, dimethyl ether, hydrogen, methane, natural gas, liquefied natural gas, compressed natural gas, or propane.
"Commercial vehicle" means any commercial vehicle that is purchased by a private business and that is used exclusively in the provision of commercial services or the transportation of commodities, merchandise, produce, refuse, freight, animals, or passengers, and that is displaying a Washington state license plate. All commercial vehicles that provide transportation to passengers must be operated by an auto transportation company.
"Gross capitalized cost" means the agreed-upon value of the commercial vehicle and including any other items a person pays over the lease term that are included in such cost.
"Lease reduction factor" means the vehicle gross capitalized cost less the residual value, divided by the gross capitalized cost.
"Qualifying used commercial vehicle" means vehicles that:
Have an odometer reading of less than 450,000 miles;
Are less than 10 years past their original date of manufacture;
Were modified after the initial purchase with a United States environmental protection agency certified conversion that would allow the propulsion units to be principally powered by a clean alternative fuel; and
Are being sold for the first time after modification.
"Residual value" means the lease-end value of the vehicle as determined by the lessor, at the end of the lease term included in the lease contract.
A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year, but may not be carried over a second year.
Credits may be earned under this section from January 1, 2016, until the maximum total credit amount in subsection (1)(b) of this section is reached, except for credits for leased vehicles, which may be earned from July 1, 2016, until the maximum total credit amount in subsection (1)(b) of this section is reached.
The business of collection, receipt, transfer, including transportation between any locations, storage, or disposal of solid waste is not subject to this chapter. Any such business activities are subject to taxation under chapter 82.04 RCW. "Solid waste" for purposes of this section is defined in RCW 82.18.010.
This chapter shall not apply to any person hauling agricultural products or farm machinery or equipment for a farmer or for a person performing custom farming services, when the person providing the hauling and the farmer or person performing custom farming services are related.
The exemption provided by this section shall not apply to the hauling of any substances or articles manufactured from agricultural products. For the purposes of this subsection, "manufactured" has the same meaning as "to manufacture" in RCW 82.04.120.
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"Custom farming services" means the performance of specific farming operations through the use of any farm machinery or equipment, farm implement, or draft animal, together with an operator, when: (i) The specific farming operation consists of activities directly related to the growing, raising, or producing of any agricultural product to be sold or consumed by a farmer; and (ii) the performance of the specific farming operation is for, and under a contract with, or the direction or supervision of, a farmer. "Custom farming services" does not include the custom application of fertilizers, chemicals, or biologicals, or any services related to the growing, raising, or producing of cannabis.For the purposes of this subsection (3)(a), "specific farming operation" includes specific planting, cultivating, or harvesting activities, or similar specific farming operations. "Specific farming operation" does not include veterinary services as described in RCW 18.92.010; farrier, boarding, training, or appraisal services; artificial insemination or stud services, or agricultural consulting services; packing or processing of agricultural products; or pumping or other waste disposal services.
"Eligible farmer" means a person who is eligible for an exemption certificate under RCW 82.08.855 at the time that the custom farming services are rendered, regardless of whether the person has applied for an exemption certificate under RCW 82.08.855.
"Farm management services" means the consultative decisions made for the operations of the farm including, but not limited to, determining which crops to plant, the choice and timing of application of fertilizers and chemicals, the horticultural practices to apply, the marketing of crops and livestock, and the care and feeding of animals. "Farm management services" does not include any services related to the growing, raising, or producing of cannabis.
"Related" means having any of the relationships specifically described in section 267(b) (1), (2), and (4) through (13) of the internal revenue code as of January 1, 2007.
The definitions in RCW 82.04.213 apply to this section.
The litter tax imposed in this chapter does not apply to:
The manufacture or sale of products for use and consumption outside the state;
The value of products or gross proceeds of the wholesale sale of agricultural products by a farmer;
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The sale of products for resale by a qualified grocery distribution cooperative to customer-owners of the grocery distribution cooperative.
For the purposes of this subsection:
(A) A grocery distribution cooperative that has been determined by a court of record of the state of Washington to not be engaged in making sales at wholesale, within the meaning of RCW 82.04.060 or any similar provision of a municipal ordinance that imposes a tax on gross receipts, gross proceeds of sales, or gross income, with respect to purchases made by customer-owners, and subsequently changes its form of doing business to make sales at wholesale of groceries or related items to its customer-owners; or
(B) A grocery distribution cooperative that has acquired substantially all of the assets of a grocery distribution cooperative described in (b)(i)(A) of this subsection (3).
ii. "Customer-owner" means a person who has an ownership interest in a grocery distribution cooperative and purchases groceries and related items at wholesale from that grocery distribution cooperative;
The sale of food or beverages by retailers that are sold solely for immediate consumption indoors at the seller's place of business or at a deck or patio at the seller's place of business, or indoors at an eating area that is contiguous to the seller's place of business; or
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The sale of prepared food or beverages by caterers where the food or beverages are to be served for immediate consumption in or on individual nonsingle use containers at premises occupied or controlled by the customer.
For the purposes of this subsection, the following definitions apply:
"Prepared food" has the same meaning as provided in RCW 82.08.0293.
"Nonsingle use container" means a receptacle for holding a single individual's food or beverage that is designed to be used more than once. Nonsingle use containers do not include pizza delivery bags and similar insulated containers that do not directly contact the food. Nonsingle use containers do not include plastic or paper plates or other containers that are disposable.
"Caterer" means a person contracted to prepare food where the final cooking or serving occurs at a location selected by the customer.
All leasehold interests in port district facilities exempt from tax under RCW 82.08.980 or 82.12.980 and used by a manufacturer engaged in the manufacturing of superefficient airplanes, as defined in RCW 82.32.550, are exempt from tax under this chapter.
In addition to all other requirements under this title, a person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
This section expires July 1, 2040.
Except as provided in subsections (2) and (3) of this section, if any person engages in any business or performs any act upon which a tax is imposed by the preceding chapters, that person must, under such rules as the department prescribes, apply for and obtain from the department a registration certificate. Such registration certificate is personal and nontransferable and is valid as long as the person continues in business and pays the tax accrued to the state. In case business is transacted at two or more separate places by one person, a separate registration certificate for each place at which business is transacted with the public is required. Each certificate must be numbered and must show the name, residence, and place and character of business of the person and such other information as the department of revenue deems necessary and must be posted in a conspicuous place at the place of business for which it is issued. Where a place of business of the person is changed, the person must return to the department the existing certificate, and a new certificate will be issued for the new place of business. No person required to be registered under this section may engage in any business taxable hereunder without first being so registered. The department, by rule, may provide for the issuance of certificates of registration to temporary places of business.
Unless the person is a dealer as defined in RCW 9.41.010, registration under this section is not required if the following conditions are met:
(i) The person does not have substantial nexus with this state under RCW 82.04.067; or
The person's gross income of the business from all activities taxable under chapter 82.16 RCW is less than twelve thousand dollars per year;
The person is not required to collect or pay to the department of revenue any other tax or fee that the department is authorized to collect; and
The person is not otherwise required to obtain a license subject to the business license application procedure provided in chapter 19.02 RCW.
All persons who agree to collect and remit sales and use tax to the department under the agreement must register through the central registration system authorized under the agreement. Persons required to register under subsection (1) of this section are not relieved of that requirement because of registration under this subsection (3).
Persons registered under subsection (3) of this section who are not required to register under subsection (1) of this section and who are not otherwise subject to the requirements of chapter 19.02 RCW are not subject to the fees imposed by the department under the authority of RCW 19.02.075.
The total combined credits and deferrals that may be taken under RCW 82.12.024 and 82.16.0495 shall not exceed two million five hundred thousand dollars in any fiscal year. Each taxpayer is limited to no more than a total of one million five hundred thousand dollars in tax deferred and credit allowed in any fiscal year in which more than one taxpayer takes tax credits and claims tax deferral. The department may require reporting of the credits taken and amounts deferred in a manner and form as is necessary to keep a running total of the amounts.
Credits and deferred tax are available on a first come basis. Priority for tax credits and deferrals among approved applicants shall be designated based on the first actual consumption of gas under RCW 82.12.024, or on the first actual use of electricity under RCW 82.16.0495, by each approved applicant. The department shall disallow any credits or deferred tax, or portion thereof, that would cause the total amount of credits taken and deferred taxes claimed to exceed the fiscal year cap or to exceed the per taxpayer fiscal year cap. If the fiscal cap is reached or exceeded, the department shall notify those taxpayers who have approved applications under RCW 82.12.024 and 82.16.0495 that no more credits may be taken or tax deferred during the remainder of the fiscal year. In addition, the department shall provide written notice to any taxpayer who has taken any tax credits or claimed any deferred tax in excess of the fiscal year cap. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice.
No portion of an application for credit or deferral disallowed under this section may be carried back or carried forward nor may taxes ineligible for credit or deferral due to the fiscal cap having been reached or exceeded be carried forward or carried backward.
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Beginning in calendar year 2018, every taxpayer claiming a tax preference that requires an annual tax performance report under this section must file a complete annual report with the department. The report is due by May 31st of the year following any calendar year in which a taxpayer becomes eligible to claim the tax preference that requires a report under this section.
If the tax preference is a deferral of tax, the first annual tax performance report must be filed by May 31st of the calendar year following the calendar year in which the investment project is certified by the department as operationally complete. An annual tax performance report must also be filed by May 31st of each succeeding calendar year through the calendar year in which the deferred taxes are fully repaid or are immediately due and payable because the recipient of the deferral is no longer eligible for the deferral.
The department may extend the due date for timely filing of annual reports under this section as provided in RCW 82.32.590.
The report must include information detailing employment and wages for employment positions in Washington for the year that the tax preference was claimed. However, taxpayers engaged in manufacturing commercial airplanes or components of such airplanes may report employment and wage information per job at the manufacturing site for the year that the tax preference was claimed. The report must not include names of employees. The report must also detail employment by the total number of full-time, part-time, and temporary positions for the year that the tax preference was claimed. In lieu of reporting employment and wage data required under this subsection, taxpayers may instead opt to allow the employment security department to release the same employment and wage information from unemployment insurance records to the department and the joint legislative audit and review committee. This option is intended to reduce the reporting burden for taxpayers, and each taxpayer electing to use this option must affirm that election in accordance with procedures approved by the employment security department.
Taxpayers receiving the benefit of the tax preference provided by RCW 82.16.0421 or claiming any of the tax preferences provided by RCW 82.08.805, 82.12.805, or 82.12.022(5) must indicate on the annual report the quantity of product produced in this state during the time period covered by the report.
If a taxpayer filing a report under this section did not file a report with the department in the previous calendar year, the report filed under this section must also include employment and wage information for the calendar year immediately preceding the calendar year for which a tax preference was claimed.
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As part of the annual report, the department and the joint legislative audit and review committee may request additional information necessary to measure the results of, or determine eligibility for, the tax preference.
The report must include the amount of the tax preference claimed for the calendar year covered by the report. For a taxpayer that claimed an exemption provided in RCW 82.08.025651 or 82.12.025651, the report must include the amount of tax exempted under those sections in the prior calendar year for each general area or category of research and development for which exempt machinery and equipment and labor and services were acquired in the prior calendar year.
Other than information requested under subsection (2)(a) of this section, the information contained in an annual report filed under this section is not subject to the confidentiality provisions of RCW 82.32.330 and may be disclosed to the public upon request.
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Except as otherwise provided by law, if a taxpayer claims a tax preference that requires an annual report under this section but fails to submit a complete report by the due date or any extension under RCW 82.32.590, the department must declare:
Thirty-five percent of the amount of the tax preference claimed for the previous calendar year to be immediately due and payable;
An additional fifteen percent of the amount of the tax preference claimed for the previous calendar year to be immediately due and payable if the taxpayer has previously been assessed under this subsection (4) for failure to submit a report under this section for the same tax preference; and
If the tax preference is a deferral of tax, the amount immediately due under this subsection is the deferred tax divided by the number of years in the repayment period. If the economic benefits of the deferral are passed to a lessee, the lessee is responsible for payment to the extent the lessee has received the economic benefit.
The department may not assess interest or penalties on amounts due under this subsection.
The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers may be included in any category. The department must report these statistics to the legislature each year by December 31st.
For the purposes of this section:
"Person" has the meaning provided in RCW 82.04.030 and also includes the state and its departments and institutions.
"Tax preference" has the meaning provided in RCW 43.136.021 and includes only the tax preferences requiring a report under this section.
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A silicon smelter operated by a taxpayer required to submit an annual survey or report under RCW 82.16.315 or 82.12.022 must repay an amount equal to the entire economic benefit accruing to the taxpayer for the previous two calendar years due to the tax preferences under RCW 82.16.315 or 82.12.022 if:
The average number of employment positions at a silicon smelter operated by the taxpayer is less than one hundred employment positions, as reported to the employment security department for the previous two calendar years; and
The average annual wage for all employment positions is equal to or less than the average annual wage for the county in which the silicon smelter operation is located for the previous two calendar years. The department must use the finalized 2015 county wage data from the census of employment and wages as reported by the employment security department.
The department must make the determinations under (a)(i) and (ii) of this subsection (1) by August 31, 2023.
If any tax preference amounts must be repaid under subsection (1) of this section, the department must declare the tax preference amounts to be immediately due and payable. The department must assess interest, but not penalties, on the amounts due under this subsection. The department must assess interest at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and such interest accrues until the tax preference amounts are repaid.
If any tax preference amounts must be repaid under subsection (1) of this section, the taxpayer may not continue to benefit from the tax preferences under RCW 82.16.315 or 82.12.022.
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Automated sales suppression devices, phantom‑ware, electronic cash registers or point of sale systems used with automated sales suppression devices or phantom‑ware, and any property constituting proceeds traceable to any violation of RCW 82.32.290(4) are considered contraband and are subject to seizure and forfeiture.
Property subject to forfeiture under (a) of this subsection (1) may be seized by any agent of the department authorized to assess or collect taxes, or law enforcement officer of this state, upon process issued by any superior court or district court having jurisdiction over the property. Seizure without process may be made if:
The seizure is incident to an arrest or a search under a search warrant; or
The department or the law enforcement officer has probable cause to believe that the property was used or is intended to be used in violation of RCW 82.32.290(4) and exigent circumstances exist making procurement of a search warrant impracticable.
Forfeiture authorized by this section is deemed to have commenced by the seizure. Notice of seizure must be given to the department if the seizure is made by a law enforcement officer without the presence of any agent of the department. The department must cause notice of the seizure and intended forfeiture to be served on the owner of the property seized, if known, and on any other person known by the department to have a right or interest in the seized property. Such service must be made within fifteen days following the seizure or the department's receipt of notification of the seizure. The notice may be served by any method authorized by law or court rule, by certified mail with return receipt requested, or electronically in accordance with RCW 82.32.135. Service by certified mail or electronic means is deemed complete upon mailing the notice, electronically sending the notice, or electronically notifying the person or persons entitled to the notice that the notice is available to be accessed by the person or persons, within the fifteen‑day period following the seizure or the department's receipt of notification of the seizure.
If no person notifies the department in writing of the person's claim of lawful ownership or right to lawful possession of the item or items seized within thirty days of the date of service of the notice of seizure and intended forfeiture, the item or items seized are deemed forfeited.
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If any person notifies the department, in writing, of the person's claim of lawful ownership or lawful right to possession of the item or items seized within thirty days of the date of service of the notice of seizure and intended forfeiture, the person or persons must be afforded a reasonable opportunity to be heard as to the claim. The hearing must be before the director or the director's designee. A hearing and any administrative or judicial review is governed by chapter 34.05 RCW. The burden of proof by a preponderance of the evidence is upon the person claiming to be the lawful owner or the person claiming to have the lawful right to possession of the item or items seized.
The department must return the item or items to the claimant as soon as possible upon a determination that the claimant is the present lawful owner or is lawfully entitled to possession of the item or items seized.
When property is sought to be forfeited on the ground that it constitutes proceeds traceable to a violation of RCW 82.32.290(4), the department must prove by a preponderance of the evidence that the property constitutes proceeds traceable to a violation of RCW 82.32.290(4).
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When automated sales suppression devices or phantom-ware voluntarily surrendered to an agent of the department, or property forfeited under this section, other than proceeds traceable to a violation of RCW 82.32.290(4), is no longer required for evidentiary purposes, the department may:
Destroy or have the property destroyed;
Retain the property for training or other official purposes; or
Loan or give the property to any law enforcement or tax administration agency of any state, political subdivision or municipal corporation of a state, or the United States for training or other official purposes. For purposes of this subsection (6)(a)(iii), "state" has the same meaning as in section 208 of this act.
When proceeds traceable to a violation of RCW 82.32.290(4) forfeited under this section are no longer required for evidentiary purposes, they must be deposited into the general fund.
The definitions in this subsection apply to this section:
"Automated sales suppression device" means a software program that falsifies the electronic records of electronic cash registers or other point of sale systems, including transaction data and transaction reports. The term includes the software program, any device that carries the software program, or an internet link to the software program.
"Electronic cash register" means a device that keeps a register or supporting documents through the means of an electronic device or computer system designed to record transaction data for the purpose of computing, compiling, or processing sales transaction data in whatever manner.
"Phantom‑ware" means a programming option that is hidden, preinstalled, or installed‑at‑a‑later‑time in the operating system of an electronic cash register or other point of sale device, or hardwired into the electronic cash register or other point of sale device, and that can be used to create a virtual second till or may eliminate or manipulate transaction reports that may or may not be preserved in digital formats to represent the true or manipulated record of transactions in the electronic cash register or other point of sale device.
"Transaction data" means information about sales transactions, including items purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.
"Transaction reports" means a report that includes information associated with sales transactions, taxes collected, media totals, and discount voids at an electronic cash register that can be printed on cash register tape at the end of a day or shift, or a report documenting every action at an electronic cash register or other point of sale device and that is stored electronically.
A client under the terms of a professional employer agreement is deemed to be the sole employer of a covered employee for purposes of eligibility for any tax credit, exemption, or other tax incentive, arising as the result of the employment of covered employees, provided in RCW 82.08.965, 82.12.965, 82.16.0495, or 82.60.049 or chapter 82.62 or 82.70 RCW, or any other provision in this title. A client, and not the professional employer organization, is entitled to the benefit of any tax credit, exemption, or other tax incentive arising as the result of the employment of covered employees of that client.
A client under the terms of a professional employer agreement is deemed to be the sole employer of a covered employee for purposes of tax performance reports that require the reporting of employment information relating to covered employees of the client, as provided in RCW 82.32.534. A client, and not the professional employer organization, is required to complete any tax performance report that requires the reporting of employment information relating to covered employees of that client.
For the purposes of this section, "client," "covered employee," "professional employer agreement," and "professional employer organization" have the same meanings as in RCW 82.04.540.
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Sections 510, 512, 514, 516, 518, 520, 522, and 524, chapter 37, Laws of 2017 3rd sp. sess., sections 9, 13, 17, 22, 24, 30, 32, and 45, chapter 135, Laws of 2017, sections 104, 110, 117, 123, 125, 129, 131, and 150, chapter 114, Laws of 2010, and sections 1, 2, 3, and 5 through 10, chapter 149, Laws of 2003 are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington by January 1, 2024.
For the purposes of this section:
"Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965.
"Semiconductor microchip fabrication" means taking raw polished semiconductor wafers and embedding integrated circuits on the wafers using processes such as masking, etching, and diffusion.
"Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least one billion dollars.
The sections referenced in subsection (1) of this section take effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, if the contract is signed and received by the department by January 1, 2024, as determined by the director of the department of revenue.
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The department of revenue must provide notice of the effective date of the sections referenced in subsection (1) of this section to affected taxpayers, the legislature, and others as deemed appropriate by the department.
If, after making a determination that a contract has been signed and the sections referenced in subsection (1) of this section are effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department must make a determination that chapter 149, Laws of 2003 and the sections referenced in subsection (1) of this section are no longer effective, and all taxes that would have been otherwise due are deemed deferred taxes and are immediately assessed and payable from any person claiming an exemption or credit under RCW 82.08.965, 82.12.965, 82.08.970, 82.12.970, or 84.36.645. The department is not authorized to make a second determination regarding the effective date of the sections referenced in subsection (1) of this section.
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This section expires January 1, 2024, if the contingency in subsection (2) of this section does not occur by January 1, 2024, as determined by the department.
The department must provide written notice of the expiration date of this section and the sections referenced in subsection (1) of this section to affected taxpayers, the legislature, and others as deemed appropriate by the department.
A sale of standing timber is exempt from tax under this chapter if the gross income from such sale is taxable under RCW 82.04.261.
Machinery and equipment exempt under RCW 82.08.02565 or 82.12.02565 used in manufacturing semiconductor materials at a building exempt from sales and use tax and in compliance with the employment requirement under RCW 82.08.965 and 82.12.965 are exempt from property taxation. "Semiconductor materials" has the same meaning as provided in RCW 82.08.965.
A person seeking this exemption must make application to the county assessor, on forms prescribed by the department.
A person claiming an exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
This section is effective for taxes levied for collection one year after the effective date of section 150, chapter 114, Laws of 2010 and thereafter.
This section expires January 1, 2024, unless the contingency in RCW 82.32.790(2) occurs.
Effective January 1, 2005, all buildings, machinery, equipment, and other personal property of a lessee of a port district eligible under RCW 82.08.980 and 82.12.980, used exclusively in manufacturing superefficient airplanes, are exempt from property taxation. For the purposes of this section, "superefficient airplane" and "component" have the meanings given in RCW 82.32.550.
In addition to all other requirements under this title, a person claiming the exemption under this section must file a complete annual tax performance report with the department under RCW 82.32.534.
Claims for exemption authorized by this section must be filed with the county assessor on forms prescribed by the department and furnished by the assessor. The assessor must verify and approve claims as the assessor determines to be justified and in accordance with this section. No claims may be filed after December 31, 2039. The department may adopt rules, under the provisions of chapter 34.05 RCW, as necessary to properly administer this section.
This section applies to taxes levied for collection in 2006 and thereafter.
This section expires July 1, 2040.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Best achievable protection" means the highest level of protection that can be achieved through the use of the best achievable technology and those staffing levels, training procedures, and operational methods that provide the greatest degree of protection achievable. The director's determination of best achievable protection shall be guided by the critical need to protect the state's natural resources and waters, while considering:
The additional protection provided by the measures;
The technological achievability of the measures; and
The cost of the measures.
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"Best achievable technology" means the technology that provides the greatest degree of protection taking into consideration:
Processes that are being developed, or could feasibly be developed, given overall reasonable expenditures on research and development; and
Processes that are currently in use.
In determining what is best achievable technology, the director shall consider the effectiveness, engineering feasibility, and commercial availability of the technology.
"Bulk" means material that is stored or transported in a loose, unpackaged liquid, powder, or granular form capable of being conveyed by a pipe, bucket, chute, or belt system.
"Cargo vessel" means a self-propelled ship in commerce, other than a tank vessel or a passenger vessel, of three hundred or more gross tons, including but not limited to, commercial fish processing vessels and freighters.
"Covered vessel" means a tank vessel, cargo vessel, or passenger vessel.
"Department" means the department of ecology.
"Director" means the director of the department of ecology.
"Discharge" means any spilling, leaking, pumping, pouring, emitting, emptying, or dumping.
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"Facility" means any structure, group of structures, equipment, pipeline, or device, other than a vessel, located on or near the navigable waters of the state that transfers oil in bulk to or from a tank vessel or pipeline, that is used for producing, storing, handling, transferring, processing, or transporting oil in bulk.
For the purposes of oil spill contingency planning in RCW 90.56.210, facility also means a railroad that is not owned by the state that transports oil as bulk cargo.
Except as provided under (b) of this subsection, a facility does not include any: (i) Railroad car, motor vehicle, or other rolling stock while transporting oil over the highways or rail lines of this state; (ii) retail motor vehicle motor fuel outlet; (iii) facility described in RCW 88.40.011(8)(b)(iii); (iv) underground storage tank regulated by the department or a local government under chapter 70A.355 RCW; or (v) marine fuel outlet that does not dispense more than three thousand gallons of fuel to a ship that is not a covered vessel, in a single transaction.
"Marine facility" means any facility used for tank vessel wharfage or anchorage, including any equipment used for the purpose of handling or transferring oil in bulk to or from a tank vessel.
"Navigable waters of the state" means those waters of the state, and their adjoining shorelines, that are subject to the ebb and flow of the tide and/or are presently used, have been used in the past, or may be susceptible for use to transport intrastate, interstate, or foreign commerce.
"Offshore facility" means any facility located in, on, or under any of the navigable waters of the state, but does not include a facility any part of which is located in, on, or under any land of the state, other than submerged land. "Offshore facility" does not include a marine facility.
"Oil" or "oils" means oil of any kind that is liquid at twenty-five degrees Celsius and one atmosphere of pressure and any fractionation thereof, including, but not limited to, crude oil, bitumen, synthetic crude oil, natural gas well condensate, petroleum, gasoline, fuel oil, diesel oil, biological oils and blends, oil sludge, oil refuse, and oil mixed with wastes other than dredged spoil. Oil does not include any substance listed in Table 302.4 of 40 C.F.R. Part 302 adopted August 14, 1989, under section 102(a) of the federal comprehensive environmental response, compensation, and liability act of 1980, as amended by P.L. 99‑499.
"Onshore facility" means any facility any part of which is located in, on, or under any land of the state, other than submerged land, that because of its location, could reasonably be expected to cause substantial harm to the environment by discharging oil into or on the navigable waters of the state or the adjoining shorelines.
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"Owner or operator" means (i) in the case of a vessel, any person owning, operating, or chartering by demise, the vessel; (ii) in the case of an onshore or offshore facility, any person owning or operating the facility; and (iii) in the case of an abandoned vessel or onshore or offshore facility, the person who owned or operated the vessel or facility immediately before its abandonment.
"Operator" does not include any person who owns the land underlying a facility if the person is not involved in the operations of the facility.
"Passenger vessel" means a ship of three hundred or more gross tons with a fuel capacity of at least six thousand gallons carrying passengers for compensation.
"Person" means any political subdivision, government agency, municipality, industry, public or private corporation, copartnership, association, firm, individual, or any other entity whatsoever.
"Race Rocks light" means the nautical landmark located southwest of the city of Victoria, British Columbia.
"Regional vessels of opportunity response group" means a group of nondedicated vessels participating in a vessels of opportunity response system to respond when needed and available to spills in a defined geographic area.
"Severe weather conditions" means observed nautical conditions with sustained winds measured at forty knots and wave heights measured between twelve and eighteen feet.
"Ship" means any boat, ship, vessel, barge, or other floating craft of any kind.
"Spill" means an unauthorized discharge of oil into the waters of the state.
"Strait of Juan de Fuca" means waters off the northern coast of the Olympic Peninsula seaward of a line drawn from New Dungeness light in Clallam county to Discovery Island light on Vancouver Island, British Columbia, Canada.
"Tank vessel" means a ship that is constructed or adapted to carry, or that carries, oil in bulk as cargo or cargo residue, and that:
Operates on the waters of the state; or
Transfers oil in a port or place subject to the jurisdiction of this state.
"Umbrella plan holder" means a nonprofit corporation established consistent with this chapter for the purposes of providing oil spill response and contingency plan coverage.
"Vessel emergency" means a substantial threat of pollution originating from a covered vessel, including loss or serious degradation of propulsion, steering, means of navigation, primary electrical generating capability, and seakeeping capability.
"Vessels of opportunity response system" means nondedicated boats and operators, including fishing and other vessels, that are under contract with and equipped by contingency plan holders to assist with oil spill response activities, including on-water oil recovery in the nearshore environment and the placement of oil spill containment booms to protect sensitive habitats.
"Volunteer coordination system" means an oil spill response system that, before a spill occurs, prepares for the coordination of volunteers to assist with appropriate oil spill response activities, which may include shoreline protection and cleanup, wildlife recovery, field observation, light construction, facility maintenance, donations management, clerical support, and other aspects of a spill response.
"Waters of the state" includes lakes, rivers, ponds, streams, inland waters, underground water, salt waters, estuaries, tidal flats, beaches and lands adjoining the seacoast of the state, sewers, and all other surface waters and watercourses within the jurisdiction of the state of Washington.
"Worst case spill" means: (a) In the case of a vessel, a spill of the entire cargo and fuel of the vessel complicated by adverse weather conditions; and (b) in the case of an onshore or offshore facility, the largest foreseeable spill in adverse weather conditions.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Best achievable protection" means the highest level of protection that can be achieved through the use of the best achievable technology and those staffing levels, training procedures, and operational methods that provide the greatest degree of protection achievable. The director's determination of best achievable protection shall be guided by the critical need to protect the state's natural resources and waters, while considering (a) the additional protection provided by the measures; (b) the technological achievability of the measures; and (c) the cost of the measures.
"Best achievable technology" means the technology that provides the greatest degree of protection taking into consideration (a) processes that are being developed, or could feasibly be developed, given overall reasonable expenditures on research and development, and (b) processes that are currently in use. In determining what is best achievable technology, the director shall consider the effectiveness, engineering feasibility, and commercial availability of the technology.
"Board" means the pollution control hearings board.
"Bulk" means material that is stored or transported in a loose, unpackaged liquid, powder, or granular form capable of being conveyed by a pipe, bucket, chute, or belt system.
"Cargo vessel" means a self-propelled ship in commerce, other than a tank vessel or a passenger vessel, three hundred or more gross tons, including but not limited to, commercial fish processing vessels and freighters.
"Committee" means the preassessment screening committee established under RCW 90.48.368.
"Covered vessel" means a tank vessel, cargo vessel, or passenger vessel.
"Crude oil" means any naturally occurring hydrocarbons coming from the earth that are liquid at twenty-five degrees Celsius and one atmosphere of pressure including, but not limited to, crude oil, bitumen and diluted bitumen, synthetic crude oil, and natural gas well condensate.
"Department" means the department of ecology.
"Director" means the director of the department of ecology.
"Discharge" means any spilling, leaking, pumping, pouring, emitting, emptying, or dumping.
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"Facility" means any structure, group of structures, equipment, pipeline, or device, other than a vessel, located on or near the navigable waters of the state that transfers oil in bulk to or from a tank vessel or pipeline, that is used for producing, storing, handling, transferring, processing, or transporting oil in bulk.
For the purposes of oil spill contingency planning in RCW 90.56.210, facility also means a railroad that is not owned by the state that transports oil as bulk cargo.
Except as provided in (b) of this subsection, a facility does not include any: (i) Railroad car, motor vehicle, or other rolling stock while transporting oil over the highways or rail lines of this state; (ii) underground storage tank regulated by the department or a local government under chapter 70A.355 RCW; (iii) motor vehicle motor fuel outlet; (iv) facility that is operated as part of an activity consisting of the wholesale sale of agricultural products by a farmer, as those terms are defined in RCW 82.04.060 and 82.04.213, or involving land enrolled in the federal conservation reserve program or its successor administered by the United States department of agriculture; or (v) marine fuel outlet that does not dispense more than three thousand gallons of fuel to a ship that is not a covered vessel, in a single transaction.
"Fund" means the state coastal protection fund as provided in RCW 90.48.390 and 90.48.400.
"Having control over oil" shall include but not be limited to any person using, storing, or transporting oil immediately prior to entry of such oil into the waters of the state, and shall specifically include carriers and bailees of such oil.
"Marine facility" means any facility used for tank vessel wharfage or anchorage, including any equipment used for the purpose of handling or transferring oil in bulk to or from a tank vessel.
"Navigable waters of the state" means those waters of the state, and their adjoining shorelines, that are subject to the ebb and flow of the tide and/or are presently used, have been used in the past, or may be susceptible for use to transport intrastate, interstate, or foreign commerce.
"Necessary expenses" means the expenses incurred by the department and assisting state agencies for (a) investigating the source of the discharge; (b) investigating the extent of the environmental damage caused by the discharge; (c) conducting actions necessary to clean up the discharge; (d) conducting predamage and damage assessment studies; and (e) enforcing the provisions of this chapter and collecting for damages caused by a discharge.
"Offshore facility" means any facility located in, on, or under any of the navigable waters of the state, but does not include a facility any part of which is located in, on, or under any land of the state, other than submerged land.
"Oil" or "oils" means oil of any kind that is liquid at twenty-five degrees Celsius and one atmosphere of pressure and any fractionation thereof, including, but not limited to, crude oil, bitumen, synthetic crude oil, natural gas well condensate, petroleum, gasoline, fuel oil, diesel oil, biological oils and blends, oil sludge, oil refuse, and oil mixed with wastes other than dredged spoil. Oil does not include any substance listed in Table 302.4 of 40 C.F.R. Part 302 adopted August 14, 1989, under section 102(a) of the federal comprehensive environmental response, compensation, and liability act of 1980, as amended by P.L. 99‑499.
"Onshore facility" means any facility any part of which is located in, on, or under any land of the state, other than submerged land, that because of its location, could reasonably be expected to cause substantial harm to the environment by discharging oil into or on the navigable waters of the state or the adjoining shorelines.
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"Owner or operator" means (i) in the case of a vessel, any person owning, operating, or chartering by demise, the vessel; (ii) in the case of an onshore or offshore facility, any person owning or operating the facility; and (iii) in the case of an abandoned vessel or onshore or offshore facility, the person who owned or operated the vessel or facility immediately before its abandonment.
"Operator" does not include any person who owns the land underlying a facility if the person is not involved in the operations of the facility.
"Passenger vessel" means a ship of three hundred or more gross tons with a fuel capacity of at least six thousand gallons carrying passengers for compensation.
"Person" means any political subdivision, government agency, municipality, industry, public or private corporation, copartnership, association, firm, individual, or any other entity whatsoever.
"Ship" means any boat, ship, vessel, barge, or other floating craft of any kind.
"Spill" means an unauthorized discharge of oil or hazardous substances into the waters of the state.
"Tank vessel" means a ship that is constructed or adapted to carry, or that carries, oil in bulk as cargo or cargo residue, and that:
Operates on the waters of the state; or
Transfers oil in a port or place subject to the jurisdiction of this state.
"Waters of the state" includes lakes, rivers, ponds, streams, inland waters, underground water, salt waters, estuaries, tidal flats, beaches and lands adjoining the seacoast of the state, sewers, and all other surface waters and watercourses within the jurisdiction of the state of Washington.
"Worst case spill" means: (a) In the case of a vessel, a spill of the entire cargo and fuel of the vessel complicated by adverse weather conditions; and (b) in the case of an onshore or offshore facility, the largest foreseeable spill in adverse weather conditions.
The repeals in section 701 of this act do not affect any existing right acquired or liability or obligation incurred under the statutes repealed in this act or under any rule or order adopted under those statutes, nor does it affect any proceeding instituted under those statutes.
RCW 82.32.805 and 82.32.808 do not apply to this act. This act does not affect the expiration date of any tax preference amended in this act.
If any provision of this act or its application to any person, taxpayer, or circumstance is held invalid, the remainder of the act or the application of the provision to other persons, taxpayers, or circumstances is not affected.
The taxes imposed in this act apply beginning with business activity occurring on or after January 1, 2027.
(1) Except for sections 645, 647, 651, and 666 of this act, this act takes effect January 1, 2027.
Section 324 of this act expires if the contingency in section 20, chapter 196, Laws of 2021 occurs.
Section 661 of this act expires January 1, 2024, if the contingency in section 1407, chapter 37, Laws of 2017 3rd sp. sess. occurs. Otherwise, it expires July 1, 2027.