Business & occupation tax

AN ACT Relating to modifying business and occupation tax rates to 1
fund programs and services to benefit Washingtonians; amending RCW 2
82.04.230, 82.04.240, 82.04.2404, 82.04.241, 82.04.250, 82.04.255, 3
82.04.257, 82.04.260, 82.04.2602, 82.04.263, 82.04.270, 82.04.272, 4
82.04.280, 82.04.285, 82.04.287, 82.04.290, 82.04.2905, 82.04.2906, 5
82.04.2907, 82.04.2908, 82.04.294, and 82.04.298; reenacting and 6
amending RCW 82.04.260; creating a new section; providing effective 7
dates; and providing an expiration date. 8
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:9
Sec. 1. RCW 82.04.230 and 2006 c 300 s 5 are each amended to 10
read as follows: 11
Upon every person engaging within this state in business as an 12
extractor, except persons taxable as an extractor under any other 13
provision in this chapter; as to such persons the amount of the tax 14
with respect to such business shall be equal to the value of the 15
products, including by-products, extracted for sale or for commercial 16
or industrial use, multiplied by the rate of ((0.484)) 0.5324 17
percent. 18
The measure of the tax is the value of the products, including 19
by-products, so extracted, regardless of the place of sale or the 20
fact that deliveries may be made to points outside the state.21
Z-0303.1
HOUSE BILL 1320
State of Washington 69th Legislature 2025 Regular Session
By Representatives Street, Ormsby, Macri, and Doglio; by request of
Office of Financial Management
Read first time 01/15/25. Referred to Committee on Finance.
p. 1 HB 1320
Sec. 2. RCW 82.04.240 and 2004 c 24 s 4 are each amended to read 1
as follows: 2
Upon every person engaging within this state in business as a 3
manufacturer, except persons taxable as manufacturers under other 4
provisions of this chapter; as to such persons the amount of the tax 5
with respect to such business shall be equal to the value of the 6
products, including by-products, manufactured, multiplied by the rate 7
of ((0.484)) 0.5324 percent. 8
The measure of the tax is the value of the products, including 9
by-products, so manufactured regardless of the place of sale or the 10
fact that deliveries may be made to points outside the state.11
Sec. 3. RCW 82.04.2404 and 2024 c 261 s 10 are each amended to 12
read as follows: 13
(1) Upon every person engaging within this state in the business 14
of manufacturing or processing for hire semiconductor materials, as 15
to such persons the amount of tax with respect to such business is, 16
in the case of manufacturers, equal to the value of the product 17
manufactured, or, in the case of processors for hire, equal to the 18
gross income of the business, multiplied by the rate of ((0.275)) 19
0.3025 percent. 20
(2) For the purposes of this section "semiconductor materials" 21
means silicon crystals, silicon ingots, raw polished semiconductor 22
wafers, and compound semiconductor wafers. 23
(3) A person reporting under the tax rate provided in this 24
section must file a complete annual tax performance report with the 25
department under RCW 82.32.534. 26
(4) Any person who has claimed the preferential tax rate under 27
this section must reimburse the department for 50 percent of the 28
amount of the tax preference under this section, if the number of 29
persons employed by the person claiming the tax preference is less 30
than 90 percent of the person's three-year employment average for the 31
three years immediately preceding the year in which the preferential 32
tax rate is claimed. 33
(5) This section expires January 1, 2034. 34
Sec. 4. RCW 82.04.241 and 2024 c 261 s 2 are each amended to 35
read as follows: 36
(1) Upon every person engaging within this state in the business 37
of manufacturing semiconductor materials, as to such persons the 38
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amount of tax with respect to such business is, in the case of 1
manufacturers, equal to the value of the product manufactured, or, in 2
the case of processors for hire, equal to the gross income of the 3
business, multiplied by the rate of ((0.275)) 0.3025 percent. For the 4
purposes of this subsection "semiconductor materials" means silicon 5
crystals, silicon ingots, raw polished semiconductor wafers, compound 6
semiconductors, integrated circuits, and microchips.7
(2) A person reporting under the tax rate provided in this 8
section must file a complete annual tax performance report with the 9
department under RCW 82.32.534. 10
(3) Pursuant to RCW 82.32.790, this section is contingent on the 11
siting and commercial operation of a significant semiconductor 12
microchip fabrication facility in the state of Washington.13
(4) Any person who has claimed the preferential rate under this 14
section must reimburse the department for 50 percent of the amount of 15
the tax preference under this section if the number of persons 16
employed by the person claiming the tax preference is less than 90 17
percent of the person's three-year employment average for the three 18
years immediately preceding the year in which the preferential rate 19
is claimed. 20
(5) This section expires January 1, 2034, unless the contingency 21
in RCW 82.32.790(2) occurs. 22
Sec. 5. RCW 82.04.250 and 2014 c 97 s 402 are each amended to 23
read as follows: 24
(1) Upon every person engaging within this state in the business 25
of making sales at retail, except persons taxable as retailers under 26
other provisions of this chapter, as to such persons, the amount of 27
tax with respect to such business is equal to the gross proceeds of 28
sales of the business, multiplied by the rate of ((0.471)) 0.5181 29
percent. 30
(2) Upon every person engaging within this state in the business 31
of making sales at retail that are exempt from the tax imposed under 32
chapter 82.08 RCW by reason of RCW 82.08.0261, 82.08.0262, or 33
82.08.0263, except persons taxable under RCW 82.04.260(11) or 34
subsection (3) of this section, as to such persons, the amount of tax 35
with respect to such business is equal to the gross proceeds of sales 36
of the business, multiplied by the rate of ((0.484)) 0.5324 percent.37
(3)(a) Until July 1, 2040, upon every person classified by the 38
federal aviation administration as a federal aviation regulation part 39
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145 certificated repair station and that is engaging within this 1
state in the business of making sales at retail that are exempt from 2
the tax imposed under chapter 82.08 RCW by reason of RCW 82.08.0261, 3
82.08.0262, or 82.08.0263, as to such persons, the amount of tax with 4
respect to such business is equal to the gross proceeds of sales of 5
the business, multiplied by the rate of ((.2904)) 0.31944 percent.6
(b) A person reporting under the tax rate provided in this 7
subsection (3) must file a complete annual report with the department 8
under RCW 82.32.534. 9
Sec. 6. RCW 82.04.255 and 2011 c 322 s 2 are each amended to 10
read as follows: 11
(1) Upon every person engaging within the state in the business 12
of providing real estate brokerage services; as to such persons, the 13
amount of the tax with respect to such business is equal to the gross 14
income of the business, multiplied by the rate of ((1.5)) 1.65 15
percent. 16
(2) The measure of the tax on real estate commissions earned by 17
the real estate firm is the gross commission earned by the particular 18
real estate firm including that portion of the commission paid to 19
brokers, including designated and managing brokers, in the same firm 20
on a particular transaction. However, when a real estate commission 21
on a particular transaction is divided among real estate firms at the 22
closing of the transaction, including a firm located out of state, 23
each firm must pay the tax only upon its respective shares of said 24
commission. Moreover, when the real estate firm has paid the tax as 25
provided herein, brokers, including designated and managing brokers, 26
within the same real estate firm may not be required to pay a similar 27
tax upon the same transaction. If any firm located out of state 28
receives a share of commission on a particular transaction, that 29
company or broker must pay the tax based on the requirements of this 30
section and RCW 82.04.067. 31
(3) For the purposes of this section, "broker," "designated 32
broker," "managing broker," and "real estate firm" have the same 33
meaning as provided in RCW 18.85.011. 34
Sec. 7. RCW 82.04.257 and 2017 c 323 s 515 are each amended to 35
read as follows: 36
(1) Except as provided in subsection (2) of this section, upon 37
every person engaging within this state in the business of making 38
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sales at retail or wholesale of digital goods, digital codes, digital 1
automated services, or services described in RCW 82.04.050 (2)(g) or 2
(6)(c), as to such persons, the amount of tax with respect to such 3
business is equal to the gross proceeds of sales of the business, 4
multiplied by the rate of ((0.471)) 0.5181 percent in the case of 5
retail sales and by the rate of ((0.484)) 0.5324 percent in the case 6
of wholesale sales. 7
(2) Persons providing subscription television services or 8
subscription radio services are subject to tax under RCW 82.04.290(2) 9
on the gross income of the business received from providing such 10
services. 11
(3) For purposes of this section, a person is considered to be 12
engaging within this state in the business of making sales of digital 13
goods, digital codes, digital automated services, or services 14
described in RCW 82.04.050 (2)(g) or (6)(c), if the person makes 15
sales of digital goods, digital codes, digital automated services, or 16
services described in RCW 82.04.050 (2)(g) or (6)(c) and the sales 17
are sourced to this state under RCW 82.32.730 for sales tax purposes 18
or would have been sourced to this state under RCW 82.32.730 if the 19
sale had been taxable under chapter 82.08 RCW. 20
(4) A person subject to tax under this section is subject to the 21
mandatory electronic filing and payment requirements in RCW 22
82.32.080. 23
Sec. 8. RCW 82.04.260 and 2023 c 422 s 5 and 2023 c 286 s 3 are 24
each reenacted and amended to read as follows: 25
(1) Upon every person engaging within this state in the business 26
of manufacturing: 27
(a) Wheat into flour, barley into pearl barley, soybeans into 28
soybean oil, canola into canola oil, canola meal, or canola by-29
products, or sunflower seeds into sunflower oil; as to such persons 30
the amount of tax with respect to such business is equal to the value 31
of the flour, pearl barley, oil, canola meal, or canola by-product 32
manufactured, multiplied by the rate of ((0.138)) 0.1518 percent;33
(b) Beginning July 1, 2035, seafood products that remain in a 34
raw, raw frozen, or raw salted state at the completion of the 35
manufacturing by that person; or selling manufactured seafood 36
products that remain in a raw, raw frozen, or raw salted state at the 37
completion of the manufacturing, to purchasers who transport in the 38
ordinary course of business the goods out of this state; as to such 39
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persons the amount of tax with respect to such business is equal to 1
the value of the products manufactured or the gross proceeds derived 2
from such sales, multiplied by the rate of ((0.138)) 0.1518 percent. 3
Sellers must keep and preserve records for the period required by RCW 4
82.32.070 establishing that the goods were transported by the 5
purchaser in the ordinary course of business out of this state;6
(c)(i) Except as provided otherwise in (c)(iii) of this 7
subsection, beginning July 1, 2035, until January 1, 2046, dairy 8
products; or selling dairy products that the person has manufactured 9
to purchasers who either transport in the ordinary course of business 10
the goods out of state or purchasers who use such dairy products as 11
an ingredient or component in the manufacturing of a dairy product; 12
as to such persons the tax imposed is equal to the value of the 13
products manufactured or the gross proceeds derived from such sales 14
multiplied by the rate of ((0.138)) 0.1518 percent. Sellers must keep 15
and preserve records for the period required by RCW 82.32.070 16
establishing that the goods were transported by the purchaser in the 17
ordinary course of business out of this state or sold to a 18
manufacturer for use as an ingredient or component in the 19
manufacturing of a dairy product. 20
(ii) For the purposes of this subsection (1)(c), "dairy products" 21
means: 22
(A) Products, not including any cannabis-infused product, that as 23
of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 24
131, 133, and 135, including by-products from the manufacturing of 25
the dairy products, such as whey and casein; and 26
(B) Products comprised of not less than 70 percent dairy products 27
that qualify under (c)(ii)(A) of this subsection, measured by weight 28
or volume. 29
(iii) The preferential tax rate provided to taxpayers under this 30
subsection (1)(c) does not apply to sales of dairy products on or 31
after July 1, 2023, where a dairy product is used by the purchaser as 32
an ingredient or component in the manufacturing in Washington of a 33
dairy product; 34
(d)(i) Beginning July 1, 2035, fruits or vegetables by canning, 35
preserving, freezing, processing, or dehydrating fresh fruits or 36
vegetables, or selling at wholesale fruits or vegetables manufactured 37
by the seller by canning, preserving, freezing, processing, or 38
dehydrating fresh fruits or vegetables and sold to purchasers who 39
transport in the ordinary course of business the goods out of this 40
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state; as to such persons the amount of tax with respect to such 1
business is equal to the value of the products manufactured or the 2
gross proceeds derived from such sales multiplied by the rate of 3
((0.138)) 0.1518 percent. Sellers must keep and preserve records for 4
the period required by RCW 82.32.070 establishing that the goods were 5
transported by the purchaser in the ordinary course of business out 6
of this state. 7
(ii) For purposes of this subsection (1)(d), "fruits" and 8
"vegetables" do not include cannabis, useable cannabis, or cannabis-9
infused products; and 10
(e) Wood biomass fuel; as to such persons the amount of tax with 11
respect to the business is equal to the value of wood biomass fuel 12
manufactured, multiplied by the rate of ((0.138)) 0.1518 percent. For 13
the purposes of this section, "wood biomass fuel" means a liquid or 14
gaseous fuel that is produced from lignocellulosic feedstocks, 15
including wood, forest, or field residue and dedicated energy crops, 16
and that does not include wood treated with chemical preservations 17
such as creosote, pentachlorophenol, or copper-chrome-arsenic.18
(2) Upon every person engaging within this state in the business 19
of splitting or processing dried peas; as to such persons the amount 20
of tax with respect to such business is equal to the value of the 21
peas split or processed, multiplied by the rate of ((0.138)) 0.1518 22
percent. 23
(3) Upon every nonprofit corporation and nonprofit association 24
engaging within this state in research and development, as to such 25
corporations and associations, the amount of tax with respect to such 26
activities is equal to the gross income derived from such activities 27
multiplied by the rate of ((0.484)) 0.5324 percent.28
(4) Upon every person engaging within this state in the business 29
of slaughtering, breaking and/or processing perishable meat products 30
and/or selling the same at wholesale only and not at retail; as to 31
such persons the tax imposed is equal to the gross proceeds derived 32
from such sales multiplied by the rate of ((0.138)) 0.1518 percent.33
(5)(a) Upon every person engaging within this state in the 34
business of acting as a travel agent or tour operator and whose 35
annual taxable amount for the prior calendar year from such business 36
was $250,000 or less; as to such persons the amount of the tax with 37
respect to such activities is equal to the gross income derived from 38
such activities multiplied by the rate of ((0.275)) 0.3025 percent.39
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(b) Upon every person engaging within this state in the business 1
of acting as a travel agent or tour operator and whose annual taxable 2
amount for the prior calendar year from such business was more than 3
$250,000; as to such persons the amount of the tax with respect to 4
such activities is equal to the gross income derived from such 5
activities multiplied by the rate of:6
(i) 0.275 percent through June 30, 2019((, and));7
(ii) 0.9 percent beginning July 1, 2019 , through December 31, 8
2026; and9
(iii) 0.99 percent beginning January 1, 2027. 10
(6) Upon every person engaging within this state in business as 11
an international steamship agent, international customs house broker, 12
international freight forwarder, vessel and/or cargo charter broker 13
in foreign commerce, and/or international air cargo agent; as to such 14
persons the amount of the tax with respect to only international 15
activities is equal to the gross income derived from such activities 16
multiplied by the rate of ((0.275)) 0.3025 percent.17
(7) Upon every person engaging within this state in the business 18
of stevedoring and associated activities pertinent to the movement of 19
goods and commodities in waterborne interstate or foreign commerce; 20
as to such persons the amount of tax with respect to such business is 21
equal to the gross proceeds derived from such activities multiplied 22
by the rate of ((0.275)) 0.3025 percent. Persons subject to taxation 23
under this subsection are exempt from payment of taxes imposed by 24
chapter 82.16 RCW for that portion of their business subject to 25
taxation under this subsection. Stevedoring and associated activities 26
pertinent to the conduct of goods and commodities in waterborne 27
interstate or foreign commerce are defined as all activities of a 28
labor, service or transportation nature whereby cargo may be loaded 29
or unloaded to or from vessels or barges, passing over, onto or under 30
a wharf, pier, or similar structure; cargo may be moved to a 31
warehouse or similar holding or storage yard or area to await further 32
movement in import or export or may move to a consolidation freight 33
station and be stuffed, unstuffed, containerized, separated or 34
otherwise segregated or aggregated for delivery or loaded on any mode 35
of transportation for delivery to its consignee. Specific activities 36
included in this definition are: Wharfage, handling, loading, 37
unloading, moving of cargo to a convenient place of delivery to the 38
consignee or a convenient place for further movement to export mode; 39
documentation services in connection with the receipt, delivery, 40
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checking, care, custody and control of cargo required in the transfer 1
of cargo; imported automobile handling prior to delivery to 2
consignee; terminal stevedoring and incidental vessel services, 3
including but not limited to plugging and unplugging refrigerator 4
service to containers, trailers, and other refrigerated cargo 5
receptacles, and securing ship hatch covers. 6
(8)(a) Upon every person engaging within this state in the 7
business of disposing of low-level waste, as defined in RCW 8
70A.380.010; as to such persons the amount of the tax with respect to 9
such business is equal to the gross income of the business, excluding 10
any fees imposed under chapter 70A.384 RCW, multiplied by the rate of 11
((3.3)) 3.63 percent. 12
(b) If the gross income of the taxpayer is attributable to 13
activities both within and without this state, the gross income 14
attributable to this state must be determined in accordance with the 15
methods of apportionment required under RCW 82.04.460.16
(9) Upon every person engaging within this state as an insurance 17
producer or title insurance agent licensed under chapter 48.17 RCW or 18
a surplus line broker licensed under chapter 48.15 RCW; as to such 19
persons, the amount of the tax with respect to such licensed 20
activities is equal to the gross income of such business multiplied 21
by the rate of ((0.484)) 0.5324 percent. 22
(10) Upon every person engaging within this state in business as 23
a hospital, as defined in chapter 70.41 RCW, that is operated as a 24
nonprofit corporation or by the state or any of its political 25
subdivisions, as to such persons, the amount of tax with respect to 26
such activities is equal to the gross income of the business 27
multiplied by the rate of 0.75 percent through June 30, 1995, and 28
((1.5)) 1.65 percent thereafter. 29
(11)(a) Beginning October 1, 2005, upon every person engaging 30
within this state in the business of manufacturing commercial 31
airplanes, or components of such airplanes, or making sales, at 32
retail or wholesale, of commercial airplanes or components of such 33
airplanes, manufactured by the seller, as to such persons the amount 34
of tax with respect to such business is, in the case of 35
manufacturers, equal to the value of the product manufactured and the 36
gross proceeds of sales of the product manufactured, or in the case 37
of processors for hire, equal to the gross income of the business, 38
multiplied by the rate of: 39
(i) 0.4235 percent from October 1, 2005, through June 30, 2007;40
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(ii) 0.2904 percent beginning July 1, 2007, through March 31, 1
2020; ((and))2
(iii) ((Beginning)) 0.484 percent beginning April 1, 2020, 3
((0.484 percent)) through December 31, 2026; and4
(iv) Beginning January 1, 2027, 0.5324 percent, subject to any 5
reduction required under (e) of this subsection (11). The tax rate s 6
in (a)(iii) of this subsection and this subsection (11)(a)(((iii))) 7
(iv) applies to all business activities described in this subsection 8
(11)(a). 9
(b) Beginning July 1, 2008, upon every person who is not eligible 10
to report under the provisions of (a) of this subsection (11) and is 11
engaging within this state in the business of manufacturing tooling 12
specifically designed for use in manufacturing commercial airplanes 13
or components of such airplanes, or making sales, at retail or 14
wholesale, of such tooling manufactured by the seller, as to such 15
persons the amount of tax with respect to such business is, in the 16
case of manufacturers, equal to the value of the product manufactured 17
and the gross proceeds of sales of the product manufactured, or in 18
the case of processors for hire, be equal to the gross income of the 19
business, multiplied by the rate of: 20
(i) 0.2904 percent through March 31, 2020; and21
(ii) Beginning April 1, 2020, the following rates, which are 22
subject to any reduction required under (e) of this subsection (11):23
(A) The rate under RCW 82.04.250(1) on the business of making 24
retail sales of tooling specifically designed for use in 25
manufacturing commercial airplanes or components of such airplanes; 26
and 27
(B)(I) 0.484 percent on all other business activities described 28
in this subsection (11)(b) through December 31, 2026; and29
(II) 0.5324 percent on all other business activities described in 30
this subsection (11)(b) beginning January 1, 2027.31
(c) For the purposes of this subsection (11), "commercial 32
airplane" and "component" have the same meanings as provided in RCW 33
82.32.550. 34
(d)(i) In addition to all other requirements under this title, a 35
person reporting under the tax rate provided in this subsection (11) 36
must file a complete annual tax performance report with the 37
department under RCW 82.32.534. However, this requirement does not 38
apply to persons reporting under the tax rate in (a)(iii) of this 39
subsection (11), so long as that rate remains ((0.484)) 0.5324 40
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percent, or under any of the tax rates in (b)(ii)(A) and (B) of this 1
subsection (11), so long as those tax rates remain the rate imposed 2
pursuant to RCW 82.04.250(1) and ((0.484)) 0.5324 percent, 3
respectively. 4
(ii) Nothing in (d)(i) of this subsection (11) may be construed 5
as affecting the obligation of a person reporting under a tax rate 6
provided in this subsection (11) to file a complete annual tax 7
performance report with the department under RCW 82.32.534: (A) 8
Pursuant to another provision of this title as a result of claiming a 9
tax credit or exemption; or (B) pursuant to (d)(i) of this subsection 10
(11) as a result of claiming the tax rates in (a)(ii) or (b)(i) of 11
this subsection (11) for periods ending before April 1, 2020.12
(e)(i) After March 31, 2021, the tax rates under (a)(iii) and 13
(iv) and (b)(ii) of this subsection (11) must be reduced to ((0.357)) 14
0.3927 percent provided the conditions in RCW 82.04.2602 are met. The 15
effective date of the rates authorized under this subsection (11)(e) 16
must occur on the first day of the next calendar quarter that is at 17
least 60 days after the department receives the last of the two 18
written notices pursuant to RCW 82.04.2602 (3) and (4).19
(ii) Both a significant commercial airplane manufacturer 20
separately and the rest of the aerospace industry as a whole, 21
receiving the rate of ((0.357)) 0.3927 percent under this subsection 22
(11)(e) are subject to the aerospace apprenticeship utilization rates 23
required under RCW 49.04.220 by April 1, 2026, or five years after 24
the effective date of the ((0.357)) 0.3927 percent rate authorized 25
under this subsection (11)(e), whichever is later, as determined by 26
the department of labor and industries. 27
(iii) The provisions of RCW 82.32.805 and 82.32.808 do not apply 28
to this subsection (11)(e). 29
(f)(i) Except as provided in (f)(ii) of this subsection (11), 30
this subsection (11) does not apply on and after July 1, 2040.31
(ii) With respect to the manufacturing of commercial airplanes or 32
making sales, at retail or wholesale, of commercial airplanes, this 33
subsection (11) does not apply on and after July 1st of the year in 34
which the department makes a determination that any final assembly or 35
wing assembly of any version or variant of a commercial airplane that 36
is the basis of a siting of a significant commercial airplane 37
manufacturing program in the state under RCW 82.32.850 has been sited 38
outside the state of Washington. This subsection (11)(f)(ii) only 39
applies to the manufacturing or sale of commercial airplanes that are 40
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the basis of a siting of a significant commercial airplane 1
manufacturing program in the state under RCW 82.32.850. This 2
subsection (11)(f)(ii) continues to apply during the time that a 3
person is subject to the tax rate in (a)(iii) of this subsection 4
(11). 5
(g) For the purposes of this subsection, "a significant 6
commercial airplane manufacturer" means a manufacturer of commercial 7
airplanes with at least 50,000 full-time employees in Washington as 8
of January 1, 2021. 9
(12)(a) Until July 1, 2045, upon every person engaging within 10
this state in the business of extracting timber or extracting for 11
hire timber; as to such persons the amount of tax with respect to the 12
business is, in the case of extractors, equal to the value of 13
products, including by-products, extracted, or in the case of 14
extractors for hire, equal to the gross income of the business, 15
multiplied by the rate of 0.4235 percent from July 1, 2006, through 16
June 30, 2007, ((and)) 0.2904 percent from July 1, 2007, through 17
December 31, 2026, and 0.31944 percent from January 1, 2027, through 18
June 30, 2045. 19
(b) Until July 1, 2045, upon every person engaging within this 20
state in the business of manufacturing or processing for hire: (i) 21
Timber into timber products or wood products; (ii) timber products 22
into other timber products or wood products; or (iii) products 23
defined in RCW 19.27.570(1); as to such persons the amount of the tax 24
with respect to the business is, in the case of manufacturers, equal 25
to the value of products, including by-products, manufactured, or in 26
the case of processors for hire, equal to the gross income of the 27
business, multiplied by the rate of 0.4235 percent from July 1, 2006, 28
through June 30, 2007, ((and)) 0.2904 percent from July 1, 2007, 29
through December 31, 2026, and 0.31944 percent from January 1, 2027, 30
through June 30, 2045. 31
(c) Until July 1, 2045, upon every person engaging within this 32
state in the business of selling at wholesale: (i) Timber extracted 33
by that person; (ii) timber products manufactured by that person from 34
timber or other timber products; (iii) wood products manufactured by 35
that person from timber or timber products; or (iv) products defined 36
in RCW 19.27.570(1) manufactured by that person; as to such persons 37
the amount of the tax with respect to the business is equal to the 38
gross proceeds of sales of the timber, timber products, wood 39
products, or products defined in RCW 19.27.570(1) multiplied by the 40
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rate of 0.4235 percent from July 1, 2006, through June 30, 2007, 1
((and)) 0.2904 percent from July 1, 2007, through December 31, 2026, 2
and 0.31944 percent from January 1, 2027, through June 30, 2045.3
(d) Until July 1, 2045, upon every person engaging within this 4
state in the business of selling standing timber; as to such persons 5
the amount of the tax with respect to the business is equal to the 6
gross income of the business multiplied by the rate of ((0.2904)) 7
0.31944 percent. For purposes of this subsection (12)(d), "selling 8
standing timber" means the sale of timber apart from the land, where 9
the buyer is required to sever the timber within 30 months from the 10
date of the original contract, regardless of the method of payment 11
for the timber and whether title to the timber transfers before, 12
upon, or after severance. 13
(e) For purposes of this subsection, the following definitions 14
apply: 15
(i) "Biocomposite surface products" means surface material 16
products containing, by weight or volume, more than 50 percent 17
recycled paper and that also use nonpetroleum -based phenolic resin as 18
a bonding agent. 19
(ii) "Paper and paper products" means products made of interwoven 20
cellulosic fibers held together largely by hydrogen bonding. "Paper 21
and paper products" includes newsprint; office, printing, fine, and 22
pressure-sensitive papers; paper napkins, towels, and toilet tissue; 23
kraft bag, construction, and other kraft industrial papers; 24
paperboard, liquid packaging containers, containerboard, corrugated, 25
and solid-fiber containers including linerboard and corrugated 26
medium; and related types of cellulosic products containing 27
primarily, by weight or volume, cellulosic materials. "Paper and 28
paper products" does not include books, newspapers, magazines, 29
periodicals, and other printed publications, advertising materials, 30
calendars, and similar types of printed materials.31
(iii) "Recycled paper" means paper and paper products having 50 32
percent or more of their fiber content that comes from postconsumer 33
waste. For purposes of this subsection (12)(e)(iii), "postconsumer 34
waste" means a finished material that would normally be disposed of 35
as solid waste, having completed its life cycle as a consumer item.36
(iv) "Timber" means forest trees, standing or down, on privately 37
or publicly owned land. "Timber" does not include Christmas trees 38
that are cultivated by agricultural methods or short-rotation 39
hardwoods as defined in RCW 84.33.035. 40
p. 13 HB 1320
(v) "Timber products" means: 1
(A) Logs, wood chips, sawdust, wood waste, and similar products 2
obtained wholly from the processing of timber, short-rotation 3
hardwoods as defined in RCW 84.33.035, or both; 4
(B) Pulp, including market pulp and pulp derived from recovered 5
paper or paper products; and 6
(C) Recycled paper, but only when used in the manufacture of 7
biocomposite surface products. 8
(vi) "Wood products" means paper and paper products; dimensional 9
lumber; engineered wood products such as particleboard, oriented 10
strand board, medium density fiberboard, and plywood; wood doors; 11
wood windows; and biocomposite surface products. 12
(f) Except for small harvesters as defined in RCW 84.33.035, a 13
person reporting under the tax rate provided in this subsection (12) 14
must file a complete annual tax performance report with the 15
department under RCW 82.32.534. 16
(g) Nothing in this subsection (12) may be construed to affect 17
the taxation of any activity defined as a retail sale in RCW 18
82.04.050(2) (b) or (c), defined as a wholesale sale in RCW 19
82.04.060(2), or taxed under RCW 82.04.280(1)(g). 20
(13) Upon every person engaging within this state in inspecting, 21
testing, labeling, and storing canned salmon owned by another person, 22
as to such persons, the amount of tax with respect to such activities 23
is equal to the gross income derived from such activities multiplied 24
by the rate of ((0.484)) 0.5324 percent. 25
Sec. 9. RCW 82.04.260 and 2023 c 422 s 5 are each amended to 26
read as follows: 27
(1) Upon every person engaging within this state in the business 28
of manufacturing: 29
(a) Wheat into flour, barley into pearl barley, soybeans into 30
soybean oil, canola into canola oil, canola meal, or canola by-31
products, or sunflower seeds into sunflower oil; as to such persons 32
the amount of tax with respect to such business is equal to the value 33
of the flour, pearl barley, oil, canola meal, or canola by-product 34
manufactured, multiplied by the rate of ((0.138)) 0.1518 percent;35
(b) Beginning July 1, 2035, seafood products that remain in a 36
raw, raw frozen, or raw salted state at the completion of the 37
manufacturing by that person; or selling manufactured seafood 38
products that remain in a raw, raw frozen, or raw salted state at the 39
p. 14 HB 1320
completion of the manufacturing, to purchasers who transport in the 1
ordinary course of business the goods out of this state; as to such 2
persons the amount of tax with respect to such business is equal to 3
the value of the products manufactured or the gross proceeds derived 4
from such sales, multiplied by the rate of ((0.138)) 0.1518 percent. 5
Sellers must keep and preserve records for the period required by RCW 6
82.32.070 establishing that the goods were transported by the 7
purchaser in the ordinary course of business out of this state;8
(c)(i) Except as provided otherwise in (c)(iii) of this 9
subsection, beginning July 1, 2035, until January 1, 2046, dairy 10
products; or selling dairy products that the person has manufactured 11
to purchasers who either transport in the ordinary course of business 12
the goods out of state or purchasers who use such dairy products as 13
an ingredient or component in the manufacturing of a dairy product; 14
as to such persons the tax imposed is equal to the value of the 15
products manufactured or the gross proceeds derived from such sales 16
multiplied by the rate of ((0.138)) 0.1518 percent. Sellers must keep 17
and preserve records for the period required by RCW 82.32.070 18
establishing that the goods were transported by the purchaser in the 19
ordinary course of business out of this state or sold to a 20
manufacturer for use as an ingredient or component in the 21
manufacturing of a dairy product. 22
(ii) For the purposes of this subsection (1)(c), "dairy products" 23
means: 24
(A) Products, not including any cannabis-infused product, that as 25
of September 20, 2001, are identified in 21 C.F.R., chapter 1, parts 26
131, 133, and 135, including by-products from the manufacturing of 27
the dairy products, such as whey and casein; and 28
(B) Products comprised of not less than 70 percent dairy products 29
that qualify under (c)(ii)(A) of this subsection, measured by weight 30
or volume. 31
(iii) The preferential tax rate provided to taxpayers under this 32
subsection (1)(c) does not apply to sales of dairy products on or 33
after July 1, 2023, where a dairy product is used by the purchaser as 34
an ingredient or component in the manufacturing in Washington of a 35
dairy product; 36
(d)(i) Beginning July 1, 2035, fruits or vegetables by canning, 37
preserving, freezing, processing, or dehydrating fresh fruits or 38
vegetables, or selling at wholesale fruits or vegetables manufactured 39
by the seller by canning, preserving, freezing, processing, or 40
p. 15 HB 1320
dehydrating fresh fruits or vegetables and sold to purchasers who 1
transport in the ordinary course of business the goods out of this 2
state; as to such persons the amount of tax with respect to such 3
business is equal to the value of the products manufactured or the 4
gross proceeds derived from such sales multiplied by the rate of 5
((0.138)) 0.1518 percent. Sellers must keep and preserve records for 6
the period required by RCW 82.32.070 establishing that the goods were 7
transported by the purchaser in the ordinary course of business out 8
of this state. 9
(ii) For purposes of this subsection (1)(d), "fruits" and 10
"vegetables" do not include cannabis, useable cannabis, or cannabis-11
infused products; and 12
(e) Wood biomass fuel; as to such persons the amount of tax with 13
respect to the business is equal to the value of wood biomass fuel 14
manufactured, multiplied by the rate of ((0.138)) 0.1518 percent. For 15
the purposes of this section, "wood biomass fuel" means a liquid or 16
gaseous fuel that is produced from lignocellulosic feedstocks, 17
including wood, forest, or field residue and dedicated energy crops, 18
and that does not include wood treated with chemical preservations 19
such as creosote, pentachlorophenol, or copper-chrome-arsenic.20
(2) Upon every person engaging within this state in the business 21
of splitting or processing dried peas; as to such persons the amount 22
of tax with respect to such business is equal to the value of the 23
peas split or processed, multiplied by the rate of ((0.138)) 0.1518 24
percent. 25
(3) Upon every nonprofit corporation and nonprofit association 26
engaging within this state in research and development, as to such 27
corporations and associations, the amount of tax with respect to such 28
activities is equal to the gross income derived from such activities 29
multiplied by the rate of ((0.484)) 0.5324 percent.30
(4) Upon every person engaging within this state in the business 31
of slaughtering, breaking and/or processing perishable meat products 32
and/or selling the same at wholesale only and not at retail; as to 33
such persons the tax imposed is equal to the gross proceeds derived 34
from such sales multiplied by the rate of ((0.138)) 0.1518 percent.35
(5)(a) Upon every person engaging within this state in the 36
business of acting as a travel agent or tour operator and whose 37
annual taxable amount for the prior calendar year from such business 38
was $250,000 or less; as to such persons the amount of the tax with 39
p. 16 HB 1320
respect to such activities is equal to the gross income derived from 1
such activities multiplied by the rate of ((0.275)) 0.3025 percent.2
(b) Upon every person engaging within this state in the business 3
of acting as a travel agent or tour operator and whose annual taxable 4
amount for the prior calendar year from such business was more than 5
$250,000; as to such persons the amount of the tax with respect to 6
such activities is equal to the gross income derived from such 7
activities multiplied by the rate of:8
(i) 0.275 percent through June 30, 2019((, and));9
(ii) 0.9 percent beginning July 1, 2019 , through December 31, 10
2026; and11
(iii) 0.99 percent beginning January 1, 2027. 12
(6) Upon every person engaging within this state in business as 13
an international steamship agent, international customs house broker, 14
international freight forwarder, vessel and/or cargo charter broker 15
in foreign commerce, and/or international air cargo agent; as to such 16
persons the amount of the tax with respect to only international 17
activities is equal to the gross income derived from such activities 18
multiplied by the rate of ((0.275)) 0.3025 percent.19
(7) Upon every person engaging within this state in the business 20
of stevedoring and associated activities pertinent to the movement of 21
goods and commodities in waterborne interstate or foreign commerce; 22
as to such persons the amount of tax with respect to such business is 23
equal to the gross proceeds derived from such activities multiplied 24
by the rate of ((0.275)) 0.3025 percent. Persons subject to taxation 25
under this subsection are exempt from payment of taxes imposed by 26
chapter 82.16 RCW for that portion of their business subject to 27
taxation under this subsection. Stevedoring and associated activities 28
pertinent to the conduct of goods and commodities in waterborne 29
interstate or foreign commerce are defined as all activities of a 30
labor, service or transportation nature whereby cargo may be loaded 31
or unloaded to or from vessels or barges, passing over, onto or under 32
a wharf, pier, or similar structure; cargo may be moved to a 33
warehouse or similar holding or storage yard or area to await further 34
movement in import or export or may move to a consolidation freight 35
station and be stuffed, unstuffed, containerized, separated or 36
otherwise segregated or aggregated for delivery or loaded on any mode 37
of transportation for delivery to its consignee. Specific activities 38
included in this definition are: Wharfage, handling, loading, 39
unloading, moving of cargo to a convenient place of delivery to the 40
p. 17 HB 1320
consignee or a convenient place for further movement to export mode; 1
documentation services in connection with the receipt, delivery, 2
checking, care, custody and control of cargo required in the transfer 3
of cargo; imported automobile handling prior to delivery to 4
consignee; terminal stevedoring and incidental vessel services, 5
including but not limited to plugging and unplugging refrigerator 6
service to containers, trailers, and other refrigerated cargo 7
receptacles, and securing ship hatch covers. 8
(8)(a) Upon every person engaging within this state in the 9
business of disposing of low-level waste, as defined in RCW 10
70A.380.010; as to such persons the amount of the tax with respect to 11
such business is equal to the gross income of the business, excluding 12
any fees imposed under chapter 70A.384 RCW, multiplied by the rate of 13
((3.3)) 3.63 percent. 14
(b) If the gross income of the taxpayer is attributable to 15
activities both within and without this state, the gross income 16
attributable to this state must be determined in accordance with the 17
methods of apportionment required under RCW 82.04.460.18
(9) Upon every person engaging within this state as an insurance 19
producer or title insurance agent licensed under chapter 48.17 RCW or 20
a surplus line broker licensed under chapter 48.15 RCW; as to such 21
persons, the amount of the tax with respect to such licensed 22
activities is equal to the gross income of such business multiplied 23
by the rate of ((0.484)) 0.5324 percent. 24
(10) Upon every person engaging within this state in business as 25
a hospital, as defined in chapter 70.41 RCW, that is operated as a 26
nonprofit corporation or by the state or any of its political 27
subdivisions, as to such persons, the amount of tax with respect to 28
such activities is equal to the gross income of the business 29
multiplied by the rate of 0.75 percent through June 30, 1995, and 30
((1.5)) 1.65 percent thereafter. 31
(11)(a) Beginning October 1, 2005, upon every person engaging 32
within this state in the business of manufacturing commercial 33
airplanes, or components of such airplanes, or making sales, at 34
retail or wholesale, of commercial airplanes or components of such 35
airplanes, manufactured by the seller, as to such persons the amount 36
of tax with respect to such business is, in the case of 37
manufacturers, equal to the value of the product manufactured and the 38
gross proceeds of sales of the product manufactured, or in the case 39
p. 18 HB 1320
of processors for hire, equal to the gross income of the business, 1
multiplied by the rate of: 2
(i) 0.4235 percent from October 1, 2005, through June 30, 2007;3
(ii) 0.2904 percent beginning July 1, 2007, through March 31, 4
2020; ((and))5
(iii) ((Beginning)) 0.484 percent beginning April 1, 2020, 6
((0.484 percent)) through December 31, 2026; and7
(iv) Beginning January 1, 2027, 0.5324 percent, subject to any 8
reduction required under (e) of this subsection (11). The tax rate s 9
in (a)(iii) of this subsection and this subsection (11)(a)(((iii))) 10
(iv) applies to all business activities described in this subsection 11
(11)(a). 12
(b) Beginning July 1, 2008, upon every person who is not eligible 13
to report under the provisions of (a) of this subsection (11) and is 14
engaging within this state in the business of manufacturing tooling 15
specifically designed for use in manufacturing commercial airplanes 16
or components of such airplanes, or making sales, at retail or 17
wholesale, of such tooling manufactured by the seller, as to such 18
persons the amount of tax with respect to such business is, in the 19
case of manufacturers, equal to the value of the product manufactured 20
and the gross proceeds of sales of the product manufactured, or in 21
the case of processors for hire, be equal to the gross income of the 22
business, multiplied by the rate of: 23
(i) 0.2904 percent through March 31, 2020; and24
(ii) Beginning April 1, 2020, the following rates, which are 25
subject to any reduction required under (e) of this subsection (11):26
(A) The rate under RCW 82.04.250(1) on the business of making 27
retail sales of tooling specifically designed for use in 28
manufacturing commercial airplanes or components of such airplanes; 29
and 30
(B)(I) 0.484 percent on all other business activities described 31
in this subsection (11)(b) through December 31, 2026; and32
(II) 0.5324 percent on all other business activities described in 33
this subsection (11)(b) beginning January 1, 2027.34
(c) For the purposes of this subsection (11), "commercial 35
airplane" and "component" have the same meanings as provided in RCW 36
82.32.550. 37
(d)(i) In addition to all other requirements under this title, a 38
person reporting under the tax rate provided in this subsection (11) 39
must file a complete annual tax performance report with the 40
p. 19 HB 1320
department under RCW 82.32.534. However, this requirement does not 1
apply to persons reporting under the tax rate in (a)(iii) of this 2
subsection (11), so long as that rate remains ((0.484)) 0.5324 3
percent, or under any of the tax rates in (b)(ii)(A) and (B) of this 4
subsection (11), so long as those tax rates remain the rate imposed 5
pursuant to RCW 82.04.250(1) and ((0.484)) 0.5324 percent, 6
respectively. 7
(ii) Nothing in (d)(i) of this subsection (11) may be construed 8
as affecting the obligation of a person reporting under a tax rate 9
provided in this subsection (11) to file a complete annual tax 10
performance report with the department under RCW 82.32.534: (A) 11
Pursuant to another provision of this title as a result of claiming a 12
tax credit or exemption; or (B) pursuant to (d)(i) of this subsection 13
(11) as a result of claiming the tax rates in (a)(ii) or (b)(i) of 14
this subsection (11) for periods ending before April 1, 2020.15
(e)(i) After March 31, 2021, the tax rates under (a)(iii) and 16
(iv) and (b)(ii) of this subsection (11) must be reduced to ((0.357)) 17
0.3927 percent provided the conditions in RCW 82.04.2602 are met. The 18
effective date of the rates authorized under this subsection (11)(e) 19
must occur on the first day of the next calendar quarter that is at 20
least 60 days after the department receives the last of the two 21
written notices pursuant to RCW 82.04.2602 (3) and (4).22
(ii) Both a significant commercial airplane manufacturer 23
separately and the rest of the aerospace industry as a whole, 24
receiving the rate of ((0.357)) 0.3927 percent under this subsection 25
(11)(e) are subject to the aerospace apprenticeship utilization rates 26
required under RCW 49.04.220 by April 1, 2026, or five years after 27
the effective date of the ((0.357)) 0.3927 percent rate authorized 28
under this subsection (11)(e), whichever is later, as determined by 29
the department of labor and industries. 30
(iii) The provisions of RCW 82.32.805 and 82.32.808 do not apply 31
to this subsection (11)(e). 32
(f)(i) Except as provided in (f)(ii) of this subsection (11), 33
this subsection (11) does not apply on and after July 1, 2040.34
(ii) With respect to the manufacturing of commercial airplanes or 35
making sales, at retail or wholesale, of commercial airplanes, this 36
subsection (11) does not apply on and after July 1st of the year in 37
which the department makes a determination that any final assembly or 38
wing assembly of any version or variant of a commercial airplane that 39
is the basis of a siting of a significant commercial airplane 40
p. 20 HB 1320
manufacturing program in the state under RCW 82.32.850 has been sited 1
outside the state of Washington. This subsection (11)(f)(ii) only 2
applies to the manufacturing or sale of commercial airplanes that are 3
the basis of a siting of a significant commercial airplane 4
manufacturing program in the state under RCW 82.32.850. This 5
subsection (11)(f)(ii) continues to apply during the time that a 6
person is subject to the tax rate in (a)(iii) of this subsection 7
(11). 8
(g) For the purposes of this subsection, "a significant 9
commercial airplane manufacturer" means a manufacturer of commercial 10
airplanes with at least 50,000 full-time employees in Washington as 11
of January 1, 2021. 12
(12)(a) Until July 1, 2045, upon every person engaging within 13
this state in the business of extracting timber or extracting for 14
hire timber; as to such persons the amount of tax with respect to the 15
business is, in the case of extractors, equal to the value of 16
products, including by-products, extracted, or in the case of 17
extractors for hire, equal to the gross income of the business, 18
multiplied by the rate of 0.4235 percent from July 1, 2006, through 19
June 30, 2007, ((and)) 0.2904 percent from July 1, 2007, through 20
December 31, 2026, and 0.31944 percent from January 1, 2027, through 21
June 30, 2045. 22
(b) Until July 1, 2045, upon every person engaging within this 23
state in the business of manufacturing or processing for hire: (i) 24
Timber into timber products or wood products; (ii) timber products 25
into other timber products or wood products; or (iii) products 26
defined in RCW 19.27.570(1); as to such persons the amount of the tax 27
with respect to the business is, in the case of manufacturers, equal 28
to the value of products, including by-products, manufactured, or in 29
the case of processors for hire, equal to the gross income of the 30
business, multiplied by the rate of 0.4235 percent from July 1, 2006, 31
through June 30, 2007, ((and)) 0.2904 percent from July 1, 2007, 32
through December 31, 2026, and 0.31944 percent from January 1, 2027, 33
through June 30, 2045. 34
(c) Until July 1, 2045, upon every person engaging within this 35
state in the business of selling at wholesale: (i) Timber extracted 36
by that person; (ii) timber products manufactured by that person from 37
timber or other timber products; (iii) wood products manufactured by 38
that person from timber or timber products; or (iv) products defined 39
in RCW 19.27.570(1) manufactured by that person; as to such persons 40
p. 21 HB 1320
the amount of the tax with respect to the business is equal to the 1
gross proceeds of sales of the timber, timber products, wood 2
products, or products defined in RCW 19.27.570(1) multiplied by the 3
rate of 0.4235 percent from July 1, 2006, through June 30, 2007, 4
((and)) 0.2904 percent from July 1, 2007, through December 31, 2026, 5
and 0.31944 percent from January 1, 2027, through June 30, 2045.6
(d) Until July 1, 2045, upon every person engaging within this 7
state in the business of selling standing timber; as to such persons 8
the amount of the tax with respect to the business is equal to the 9
gross income of the business multiplied by the rate of ((0.2904)) 10
0.31944 percent. For purposes of this subsection (12)(d), "selling 11
standing timber" means the sale of timber apart from the land, where 12
the buyer is required to sever the timber within 30 months from the 13
date of the original contract, regardless of the method of payment 14
for the timber and whether title to the timber transfers before, 15
upon, or after severance. 16
(e) For purposes of this subsection, the following definitions 17
apply: 18
(i) "Biocomposite surface products" means surface material 19
products containing, by weight or volume, more than 50 percent 20
recycled paper and that also use nonpetroleum -based phenolic resin as 21
a bonding agent. 22
(ii) "Paper and paper products" means products made of interwoven 23
cellulosic fibers held together largely by hydrogen bonding. "Paper 24
and paper products" includes newsprint; office, printing, fine, and 25
pressure-sensitive papers; paper napkins, towels, and toilet tissue; 26
kraft bag, construction, and other kraft industrial papers; 27
paperboard, liquid packaging containers, containerboard, corrugated, 28
and solid-fiber containers including linerboard and corrugated 29
medium; and related types of cellulosic products containing 30
primarily, by weight or volume, cellulosic materials. "Paper and 31
paper products" does not include books, newspapers, magazines, 32
periodicals, and other printed publications, advertising materials, 33
calendars, and similar types of printed materials.34
(iii) "Recycled paper" means paper and paper products having 50 35
percent or more of their fiber content that comes from postconsumer 36
waste. For purposes of this subsection (12)(e)(iii), "postconsumer 37
waste" means a finished material that would normally be disposed of 38
as solid waste, having completed its life cycle as a consumer item.39
p. 22 HB 1320
(iv) "Timber" means forest trees, standing or down, on privately 1
or publicly owned land. "Timber" does not include Christmas trees 2
that are cultivated by agricultural methods or short-rotation 3
hardwoods as defined in RCW 84.33.035. 4
(v) "Timber products" means: 5
(A) Logs, wood chips, sawdust, wood waste, and similar products 6
obtained wholly from the processing of timber, short-rotation 7
hardwoods as defined in RCW 84.33.035, or both; 8
(B) Pulp, including market pulp and pulp derived from recovered 9
paper or paper products; and 10
(C) Recycled paper, but only when used in the manufacture of 11
biocomposite surface products. 12
(vi) "Wood products" means paper and paper products; dimensional 13
lumber; engineered wood products such as particleboard, oriented 14
strand board, medium density fiberboard, and plywood; wood doors; 15
wood windows; and biocomposite surface products. 16
(f) Except for small harvesters as defined in RCW 84.33.035, a 17
person reporting under the tax rate provided in this subsection (12) 18
must file a complete annual tax performance report with the 19
department under RCW 82.32.534. 20
(g) Nothing in this subsection (12) may be construed to affect 21
the taxation of any activity defined as a retail sale in RCW 22
82.04.050(2) (b) or (c), defined as a wholesale sale in RCW 23
82.04.060(2), or taxed under RCW 82.04.280(1)(g). 24
(13) Upon every person engaging within this state in inspecting, 25
testing, labeling, and storing canned salmon owned by another person, 26
as to such persons, the amount of tax with respect to such activities 27
is equal to the gross income derived from such activities multiplied 28
by the rate of ((0.484)) 0.5324 percent. 29
(14)(a) Upon every person engaging within this state in the 30
business of printing a newspaper, publishing a newspaper, or both, 31
the amount of tax on such business is equal to the gross income of 32
the business multiplied by the rate of 0.35 percent until July 1, 33
2024, and ((0.484)) 0.5324 percent thereafter. 34
(b) A person reporting under the tax rate provided in this 35
subsection (14) must file a complete annual tax performance report 36
with the department under RCW 82.32.534. 37
Sec. 10. RCW 82.04.2602 and 2020 c 165 s 2 are each amended to 38
read as follows: 39
p. 23 HB 1320
The rate of ((0.357)) 0.3927 percent authorized pursuant to RCW 1
82.04.260(11)(e) may be imposed only if the following conditions are 2
met: 3
(1) The department of commerce verifies with the United States 4
trade representative that the United States and the European Union 5
have entered into a written agreement that resolves any world trade 6
organization disputes involving large civil aircraft.7
(2) Such agreement expressly allows a business and occupation tax 8
rate reduction for commercial airplane manufacturers to ((0.357)) 9
0.3927 percent or less. 10
(3) The department of commerce notifies the department in writing 11
that the conditions of subsections (1) and (2) of this section are 12
met and provides a copy of the agreement between the United States 13
and the European Union or other document providing for the business 14
and occupation tax rate reduction to the department.15
(4) The department of labor and industries notifies the 16
department in writing that a significant commercial airplane 17
manufacturer has at least a three-tenths of one percent aerospace 18
apprenticeship utilization rate of its qualified apprenticeable 19
workforce in Washington, as defined in RCW 49.04.220.20
(5) Within ((thirty)) 30 days of receiving the last of the 21
written notices described in subsections (3) and (4) of this section, 22
the department must provide written notice to the chief clerk of the 23
house of representatives, the secretary of the senate, the office of 24
the code reviser, and others as deemed appropriate by the department, 25
that the tax rates in RCW 82.04.260(11)(e) are reduced to ((0.357)) 26
0.3927 percent and the effective date of the rate reduction.27
(6) Any rate reduction to ((0.357)) 0.3927 percent pursuant to 28
this section and RCW 82.04.260(11)(e) must occur on the first day of 29
the next calendar quarter that is at least ((sixty)) 60 days after 30
the department receives the last of the written notices described in 31
subsections (3) and (4) of this section. 32
(7) For the purpose of this section, "world trade organization 33
disputes involving large civil airplanes" means any disputes filed by 34
the United States or the European Union prior to March 25, 2020, that 35
involve either allegations of subsidies to large civil airplanes, or 36
allegations of taxes imposed by Washington on commercial airplanes, 37
or both. 38
p. 24 HB 1320
Sec. 11. RCW 82.04.263 and 2009 c 469 s 202 are each amended to 1
read as follows: 2
(1) Upon every person engaging within this state in the business 3
of cleaning up for the United States, or its instrumentalities, 4
radioactive waste and other by-products of weapons production and 5
nuclear research and development; as to such persons the amount of 6
the tax with respect to such business shall be equal to the gross 7
income of the business multiplied by the rate of ((0.471)) 0.5181 8
percent. 9
(2) For the purposes of this chapter, "cleaning up radioactive 10
waste and other by-products of weapons production and nuclear 11
research and development" means: 12
(a) The activities of handling, storing, treating, immobilizing, 13
stabilizing, or disposing of radioactive waste, radioactive tank 14
waste and capsules, nonradioactive hazardous solid and liquid wastes, 15
or spent nuclear fuel; 16
(b) Spent nuclear fuel conditioning; 17
(c) Removal of contamination in soils and groundwater;18
(d) Decontamination and decommissioning of facilities; and19
(e) Services supporting the performance of cleanup. For the 20
purposes of this subsection (2)(e), a service supports the 21
performance of cleanup if it: 22
(i) Is within the scope of work under a clean-up contract with 23
the United States department of energy; or 24
(ii) Assists in the accomplishment of a requirement of a clean-up 25
project undertaken by the United States department of energy under a 26
subcontract entered into with the prime contractor or another 27
subcontractor in furtherance of a clean-up contract between the 28
United States department of energy and a prime contractor.29
(3) A service does not assist in the accomplishment of a 30
requirement of a clean-up project undertaken by the United States 31
department of energy if the same services are routinely provided to 32
businesses not engaged in clean-up activities, except that the 33
following services are always deemed to contribute to the 34
accomplishment of a requirement of a clean-up project undertaken by 35
the United States department of energy: 36
(a) Information technology and computer support services;37
(b) Services rendered in respect to infrastructure; and38
(c) Security, safety, and health services. 39
p. 25 HB 1320
(4) The legislature intends that the examples provided in this 1
subsection be used as a guideline when determining whether a service 2
is "routinely provided to businesses not engaged in clean-up 3
activities" as that phrase is used in subsection (3) of this section.4
(a) The radioactive waste clean-up classification does not apply 5
to general accounting services but does apply to performance audits 6
performed for persons cleaning up radioactive waste.7
(b) The radioactive waste clean-up classification does not apply 8
to general legal services but does apply to those legal services that 9
assist in the accomplishment of a requirement of a clean-up project 10
undertaken by the United States department of energy. Thus, legal 11
services provided to contest any local, state, or federal tax 12
liability or to defend a company against a workers' compensation 13
claim arising from a worksite injury do not qualify for the 14
radioactive waste clean-up classification. But, legal services 15
related to the resolution of a contractual dispute between the 16
parties to a clean-up contract between the United States department 17
of energy and a prime contractor do qualify. 18
(c) General office janitorial services do not qualify for the 19
radioactive waste clean-up classification, but the specialized 20
cleaning of equipment exposed to radioactive waste does qualify.21
Sec. 12. RCW 82.04.270 and 2004 c 24 s 5 are each amended to 22
read as follows: 23
Upon every person engaging within this state in the business of 24
making sales at wholesale, except persons taxable as wholesalers 25
under other provisions of this chapter; as to such persons the amount 26
of tax with respect to such business shall be equal to the gross 27
proceeds of sales of such business multiplied by the rate of 28
((0.484)) 0.5324 percent. 29
Sec. 13. RCW 82.04.272 and 2013 c 19 s 127 are each amended to 30
read as follows: 31
(1) Upon every person engaging within this state in the business 32
of warehousing and reselling drugs for human use pursuant to a 33
prescription; as to such persons, the amount of the tax shall be 34
equal to the gross income of the business multiplied by the rate of 35
((0.138)) 0.1518 percent. 36
(2) For the purposes of this section: 37
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(a) "Prescription" and "drug" have the same meaning as in RCW 1
82.08.0281; and 2
(b) "Warehousing and reselling drugs for human use pursuant to a 3
prescription" means the buying of drugs for human use pursuant to a 4
prescription from a manufacturer or another wholesaler, and reselling 5
of the drugs to persons selling at retail or to hospitals, clinics, 6
health care providers, or other providers of health care services, by 7
a wholesaler or retailer who is registered with the federal drug 8
enforcement administration and licensed by the pharmacy quality 9
assurance commission. 10
Sec. 14. RCW 82.04.280 and 2019 c 449 s 1 are each amended to 11
read as follows: 12
(1) Upon every person engaging within this state in the business 13
of: (a) Printing materials other than newspapers, and of publishing 14
periodicals or magazines; (b) building, repairing or improving any 15
street, place, road, highway, easement, right-of-way, mass public 16
transportation terminal or parking facility, bridge, tunnel, or 17
trestle which is owned by a municipal corporation or political 18
subdivision of the state or by the United States and which is used or 19
to be used, primarily for foot or vehicular traffic including mass 20
transportation vehicles of any kind and including any readjustment, 21
reconstruction or relocation of the facilities of any public, private 22
or cooperatively owned utility or railroad in the course of such 23
building, repairing or improving, the cost of which readjustment, 24
reconstruction, or relocation, is the responsibility of the public 25
authority whose street, place, road, highway, easement, right-of-way, 26
mass public transportation terminal or parking facility, bridge, 27
tunnel, or trestle is being built, repaired or improved; (c) 28
extracting for hire or processing for hire, except persons taxable as 29
extractors for hire or processors for hire under another section of 30
this chapter; (d) operating a cold storage warehouse or storage 31
warehouse, but not including the rental of cold storage lockers; (e) 32
representing and performing services for fire or casualty insurance 33
companies as an independent resident managing general agent licensed 34
under the provisions of chapter 48.17 RCW; (f) radio and television 35
broadcasting, but excluding revenues from network, national, and 36
regional advertising computed either: (i) As a standard deduction 37
that the department must publish by rule by September 30, 2020, and 38
by September 30th of every fifth year thereafter, based on the 39
p. 27 HB 1320
national average thereof as reported by the United States census 1
bureau's economic census; or (ii) in lieu thereof by itemization by 2
the individual broadcasting station, and excluding that portion of 3
revenue represented by the out-of-state audience computed as a ratio 4
to the broadcasting station's total audience as measured by the .5 5
millivolt/meter signal strength contour for AM radio, the one 6
millivolt/meter or sixty dBu signal strength contour for FM radio, 7
the twenty-eight dBu signal strength contour for television channels 8
two through six, the thirty-six dBu signal strength contour for 9
television channels seven through thirteen, and the forty-one dBu 10
signal strength contour for television channels fourteen through 11
sixty-nine with delivery by wire, satellite, or any other means, if 12
any; (g) engaging in activities which bring a person within the 13
definition of consumer contained in RCW 82.04.190(6); as to such 14
persons, the amount of tax on such business is equal to the gross 15
income of the business multiplied by the rate of ((0.484)) 0.5324 16
percent. 17
(2) For the purposes of this section, the following definitions 18
apply unless the context clearly requires otherwise.19
(a) "Cold storage warehouse" means a storage warehouse used to 20
store fresh and/or frozen perishable fruits or vegetables, meat, 21
seafood, dairy products, or fowl, or any combination thereof, at a 22
desired temperature to maintain the quality of the product for 23
orderly marketing. 24
(b) "Storage warehouse" means a building or structure, or any 25
part thereof, in which goods, wares, or merchandise are received for 26
storage for compensation, except field warehouses, fruit warehouses, 27
fruit packing plants, warehouses licensed under chapter 22.09 RCW, 28
public garages storing automobiles, railroad freight sheds, docks and 29
wharves, and "self-storage" or "mini storage" facilities whereby 30
customers have direct access to individual storage areas by separate 31
entrance. "Storage warehouse" does not include a building or 32
structure, or that part of such building or structure, in which an 33
activity taxable under RCW 82.04.272 is conducted.34
(c) "Periodical or magazine" means a printed publication, other 35
than a newspaper, issued regularly at stated intervals at least once 36
every three months, including any supplement or special edition of 37
the publication. 38
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Sec. 15. RCW 82.04.285 and 2023 c 284 s 4 are each amended to 1
read as follows: 2
(1) Upon every person engaging within this state in the business 3
of operating contests of chance; as to such persons, the amount of 4
tax with respect to the business of operating contests of chance is 5
equal to the gross income of the business derived from contests of 6
chance multiplied by the rate of ((1.5)) 1.65 percent.7
(2) An additional tax is imposed on those persons subject to tax 8
in subsection (1) of this section. The amount of the additional tax 9
with respect to the business of operating contests of chance is equal 10
to the gross income of the business derived from contests of chance 11
multiplied by the rate of 0.2 percent through June 30, 2024, and 0.26 12
percent thereafter. The money collected under this subsection (2) 13
shall be deposited in the problem gambling account created in RCW 14
41.05.751. This subsection does not apply to businesses operating 15
contests of chance when the gross income from the operation of 16
contests of chance is less than $50,000 per year. 17
(3)(a) For the purpose of this section, "contests of chance" 18
means any contests, games, gaming schemes, or gaming devices, other 19
than the state lottery as defined in RCW 67.70.010, in which the 20
outcome depends in a material degree upon an element of chance, 21
notwithstanding that skill of the contestants may also be a factor in 22
the outcome. The term includes social card games, bingo, raffle, and 23
punchboard games, and pull-tabs as defined in chapter 9.46 RCW.24
(b) The term does not include: (i) Race meet for the conduct of 25
which a license must be secured from the Washington horse racing 26
commission, (ii) "amusement game" as defined in RCW 9.46.0201, or 27
(iii) any activity that is not subject to regulation by the gambling 28
commission. 29
(4) "Gross income of the business" does not include the monetary 30
value or actual cost of any prizes that are awarded, amounts paid to 31
players for winning wagers, accrual of prizes for progressive jackpot 32
contests, or repayment of amounts used to seed guaranteed progressive 33
jackpot prizes. 34
Sec. 16. RCW 82.04.287 and 2023 c 232 s 9 are each amended to 35
read as follows: 36
(1) Upon every person engaging within the state in the business 37
of manufacturing alternative jet fuel; as to such persons, the amount 38
of the tax with respect to such business is, in the case of 39
p. 29 HB 1320
manufacturers, equal to the value of the product manufactured, or in 1
the case of processors for hire, equal to the gross income of the 2
business, multiplied by the rate of ((0.275)) 0.3025 percent.3
(2) Upon every person engaging in making sales, at retail or 4
wholesale, of manufactured alternative jet fuel; as to such persons, 5
the amount of the tax with respect to such business is equal to the 6
gross proceeds of sales of the alternative jet fuel, multiplied by 7
the rate of ((0.275)) 0.3025 percent. 8
(3) For the purposes of this section, "alternative jet fuel" 9
means a fuel that can be blended and used with conventional petroleum 10
jet fuels without the need to modify aircraft engines and existing 11
fuel distribution infrastructure and that has lower greenhouse gas 12
emissions based on a full life-cycle analysis when compared to 13
conventional petroleum jet fuel for which it is capable as serving as 14
a substitute, as certified by the department of ecology using the 15
methods for determining the carbon intensity of fuels under chapter 16
70A.535 RCW. "Alternative jet fuel" includes jet fuels derived from 17
coprocessed feedstocks at a conventional petroleum refinery as 18
certified by the department of ecology using the methods for 19
determining the carbon intensity of fuels under chapter 70A.535 RCW.20
(4) A person reporting under the tax rate provided in this 21
section must file a complete annual tax performance report with the 22
department under RCW 82.32.534. 23
(5)(a) The tax rate under subsections (1) and (2) of this section 24
takes effect on the first day of the first calendar quarter following 25
the month in which the department receives notice from the department 26
of ecology that there are one or more facilities operating in this 27
state with a cumulative production capacity of at least 20,000,000 28
gallons of alternative jet fuel each year, as required in RCW 29
70A.535.150. 30
(b) The tax rate expires nine calendar years after the close of 31
the calendar year in which the tax rate under subsections (1) and (2) 32
of this section takes effect. 33
Sec. 17. RCW 82.04.290 and 2020 c 2 s 3 are each amended to read 34
as follows: 35
(1) Upon every person engaging within this state in the business 36
of providing qualifying international investment management services, 37
as to such persons, the amount of tax with respect to such business 38
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is equal to the gross income or gross proceeds of sales of the 1
business multiplied by a rate of ((0.275)) 0.3025 percent.2
(2)(a) Upon every person engaging within this state in any 3
business activity other than or in addition to an activity taxed 4
explicitly under another section in this chapter or subsection (1) or 5
(3) of this section; as to such persons the amount of tax on account 6
of such activities is equal to the gross income of the business 7
multiplied by the rate of: 8
(i)(A) 1.75 percent through September 30, 2025;9
(B) 2.1 percent beginning October 1, 2025, through December 31, 10
2026;11
(C) 1.925 percent beginning January 1, 2027, and thereafter; or12
(ii) 1.5 percent until January 1, 2027, and a rate of 1.65 13
percent thereafter for: 14
(A) Any person subject to the surcharge imposed under RCW 15
82.04.299; 16
(B) Any person whose gross income of the business subject to the 17
tax imposed under this subsection (2), for the immediately preceding 18
calendar year, was less than ((one million dollars )) $1,000,000, 19
unless (I) the person is affiliated with one or more other persons, 20
and (II) the aggregate gross income of the business subject to the 21
tax imposed under this subsection (2) for all affiliated persons was 22
greater than or equal to ((one million dollars )) $1,000,000 for the 23
immediately preceding calendar year; and 24
(C) Hospitals as defined in RCW 70.41.020, including any hospital 25
that comes within the scope of chapter 71.12 RCW if the hospital is 26
also licensed under chapter 70.41 RCW. This subsection (2)(a)(ii)(C) 27
must not be construed as modifying RCW 82.04.260(10).28
(b) This subsection (2) includes, among others, and without 29
limiting the scope hereof (whether or not title to materials used in 30
the performance of such business passes to another by accession, 31
confusion or other than by outright sale), persons engaged in the 32
business of rendering any type of service which does not constitute a 33
"sale at retail" or a "sale at wholesale." The value of advertising, 34
demonstration, and promotional supplies and materials furnished to an 35
agent by his or her principal or supplier to be used for 36
informational, educational, and promotional purposes is not 37
considered a part of the agent's remuneration or commission and is 38
not subject to taxation under this section. 39
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(c) ((14.3 percent of the)) The revenues collected under (((a)(i) 1
of)) this ((subsection (2))) section must be deposited into the 2
workforce education investment account created in RCW 43.79.195 as 3
follows:4
(i) For revenues related to filing periods before October 1, 5
2025, 14.3 percent;6
(ii) For revenues related to filing periods before January 1, 7
2027, 11.9 percent; and8
(iii) For revenues related to filing periods January 1, 2027, and 9
thereafter, 13 percent of revenues collected under this section must 10
be deposited into the workforce education investment account created 11
in RCW 43.79.195. 12
(d)(i) To aid in the effective administration of this subsection 13
(2), the department may require a person claiming to be subject to 14
the 1.5 percent tax rate under (a)(ii)(B) of this subsection (2) to 15
identify all of the person's affiliates, including their department 16
tax registration number or unified business identifier number, as may 17
be applicable, or to certify that the person is not affiliated with 18
any other person. Requests under this subsection (2)(d)(i) must be in 19
writing and may be made electronically. 20
(ii) If the department establishes, by clear, cogent, and 21
convincing evidence, that a person, with intent to evade the 22
additional taxes due under the ((1.75 percent)) tax rate in (a)(i) of 23
this subsection (2), failed to provide the department with complete 24
and accurate information in response to a written request under 25
(d)(i) of this subsection (2) within ((thirty)) 30 days of such 26
request, the person is ineligible for the ((1.5 percent)) tax rate in 27
(a)(ii) of this subsection (2) for the entire current calendar year 28
and the following four calendar years. However, the department must 29
waive the provisions of this subsection (2)(d)(ii) for any tax 30
reporting period that the person is otherwise eligible for the ((1.5 31
percent)) tax rate in (a)(ii) of this subsection (2) if (A) the 32
department has not previously determined that the person failed to 33
fully comply with (d)(i) of this subsection (2), and (B) within 34
thirty days of the notice of additional tax due as a result of the 35
person's failure to fully comply with (d)(i) of this subsection (2) 36
the department determines that the person has come into full 37
compliance with (d)(i) of this subsection (2). This subsection (2)(d) 38
applies only with respect to persons claiming entitlement to the 39
p. 32 HB 1320
((1.5 percent)) tax rate in (a)(ii) of this subsection (2) solely by 1
reason of (a)(ii)(B) of this subsection (2). 2
(e) For the purposes of (a)(ii)(B) of this subsection (2), if a 3
taxpayer is subject to the reconciliation provisions of RCW 4
82.04.462(4), and calculates gross income of the business subject to 5
the tax imposed under this subsection (2) for the immediately 6
preceding calendar year, or aggregate gross income of the business 7
subject to the tax imposed under this subsection (2) for the 8
immediately preceding calendar year for all affiliated persons, based 9
on incomplete information, the taxpayer must correct the reporting 10
for the current calendar year when complete information for the 11
immediately preceding calendar year is available. 12
(f) For purposes of this subsection (2), the definitions in this 13
subsection (2)(f) apply: 14
(i) "Affiliate" means a person that directly or indirectly, 15
through one or more intermediaries, controls, is controlled by, or is 16
under common control with another person; and 17
(ii) "Control" means the possession, directly or indirectly, of 18
more than eighty percent of the power to direct or cause the 19
direction of the management and policies of a person, whether through 20
the ownership of voting shares, by contract, or otherwise.21
(3)(a) Until ((July 1, 2040 )) December 31, 2026 , upon every 22
person engaging within this state in the business of performing 23
aerospace product development for others, as to such persons, the 24
amount of tax with respect to such business is equal to the gross 25
income of the business multiplied by a rate of 0.9 percent. Beginning 26
January 1, 2027, until July 1, 2040, the amount of tax with respect 27
to such business is equal to the gross income of the business 28
multiplied by a rate of 0.99 percent.29
(b) A person reporting under the tax rate provided in this 30
subsection (3) must file a complete annual report with the department 31
under RCW 82.32.534. 32
(c) "Aerospace product development" has the meaning as provided 33
in RCW 82.04.4461. 34
Sec. 18. RCW 82.04.2905 and 2024 c 195 s 2 are each amended to 35
read as follows: 36
(1) Except as provided in subsection (2) of this section, upon 37
every person engaging within this state in the business of providing 38
child care for periods of less than twenty-four hours, the amount of 39
p. 33 HB 1320
tax with respect to such business is equal to the gross proceeds 1
derived from such sales multiplied by the rate of ((0.484)) 0.5324 2
percent. 3
(2) Until January 1, 2035, this chapter does not apply to amounts 4
received by a child care provider for the care and supervision for 5
periods of less than 24 hours of children: 6
(a) Under 13 years of age; or 7
(b) Under 19 years of age who have a verified special need or are 8
under court supervision as determined by the department of children, 9
youth, and families under chapter 43.216 RCW. 10
(3) The exemption under subsection (2) of this section applies 11
only to persons primarily engaged in the business of providing child 12
care. 13
Sec. 19. RCW 82.04.2906 and 2003 c 343 s 1 are each amended to 14
read as follows: 15
(1) Upon every person engaging within this state in the business 16
of providing intensive inpatient or recovery house residential 17
treatment services for chemical dependency, certified by the 18
department of social and health services, for which payment from the 19
United States or any instrumentality thereof or from the state of 20
Washington or any municipal corporation or political subdivision 21
thereof is received as compensation for or to support those services; 22
as to such persons the amount of tax with respect to such business 23
shall be equal to the gross income from such services multiplied by 24
the rate of ((0.484)) 0.5324 percent. 25
(2) If the persons described in subsection (1) of this section 26
receive income from sources other than those described in subsection 27
(1) of this section or provide services other than those named in 28
subsection (1) of this section, that income and those services are 29
subject to tax as otherwise provided in this chapter.30
Sec. 20. RCW 82.04.2907 and 2021 c 145 s 9 are each amended to 31
read as follows: 32
(1) Upon every person engaging within this state in the business 33
of receiving income from royalties, the amount of tax with respect to 34
the business is equal to the gross income from royalties multiplied 35
by the rate of ((1.5)) 1.65 percent. 36
(2) For the purposes of this section, "gross income from 37
royalties" means compensation for the use of intangible property, 38
p. 34 HB 1320
including charges in the nature of royalties, regardless of where the 1
intangible property will be used. For purposes of this subsection, 2
"intangible property" includes copyrights, patents, licenses, 3
franchises, trademarks, trade names, and similar items. "Gross income 4
from royalties" does not include compensation for any natural 5
resource, the licensing of prewritten computer software to the end 6
user, or the licensing of digital goods, digital codes, or digital 7
automated services to the end user as defined in RCW 82.04.190(11).8
Sec. 21. RCW 82.04.2908 and 2012 c 10 s 70 are each amended to 9
read as follows: 10
(1) Upon every person engaging within this state in the business 11
of providing room and domiciliary care to residents of an assisted 12
living facility licensed under chapter 18.20 RCW, the amount of tax 13
with respect to such business shall be equal to the gross income of 14
the business, multiplied by the rate of ((0.275)) 0.3025 percent.15
(2) For the purposes of this section, "domiciliary care" has the 16
meaning provided in RCW 18.20.020. 17
Sec. 22. RCW 82.04.294 and 2022 c 172 s 2 are each amended to 18
read as follows: 19
(1) Upon every person engaging within this state in the business 20
of manufacturing solar energy systems using photovoltaic modules or 21
stirling converters, or of manufacturing solar grade silicon, silicon 22
solar wafers, silicon solar cells, thin film solar devices, or 23
compound semiconductor solar wafers to be used exclusively in 24
components of such systems; as to such persons the amount of tax with 25
respect to such business is, in the case of manufacturers, equal to 26
the value of the product manufactured, or in the case of processors 27
for hire, equal to the gross income of the business, multiplied by 28
the rate of ((0.275)) 0.3025 percent. 29
(2) Upon every person engaging within this state in the business 30
of making sales at wholesale of solar energy systems using 31
photovoltaic modules or stirling converters, or of solar grade 32
silicon, silicon solar wafers, silicon solar cells, thin film solar 33
devices, or compound semiconductor solar wafers to be used 34
exclusively in components of such systems, manufactured by that 35
person; as to such persons the amount of tax with respect to such 36
business is equal to the gross proceeds of sales of the solar energy 37
systems using photovoltaic modules or stirling converters, or of the 38
p. 35 HB 1320
solar grade silicon to be used exclusively in components of such 1
systems, multiplied by the rate of ((0.275)) 0.3025 percent.2
(3) Silicon solar wafers, silicon solar cells, thin film solar 3
devices, solar grade silicon, or compound semiconductor solar wafers 4
are "semiconductor materials" for the purposes of RCW 82.08.9651 and 5
82.12.9651. 6
(4) The definitions in this subsection apply throughout this 7
section. 8
(a) "Compound semiconductor solar wafers" means a semiconductor 9
solar wafer composed of elements from two or more different groups of 10
the periodic table. 11
(b) "Module" means the smallest nondivisible self-contained 12
physical structure housing interconnected photovoltaic cells and 13
providing a single direct current electrical output.14
(c) "Photovoltaic cell" means a device that converts light 15
directly into electricity without moving parts. 16
(d) "Silicon solar cells" means a photovoltaic cell manufactured 17
from a silicon solar wafer. 18
(e) "Silicon solar wafers" means a silicon wafer manufactured for 19
solar conversion purposes. 20
(f) "Solar energy system" means any device or combination of 21
devices or elements that rely upon direct sunlight as an energy 22
source for use in the generation of electricity. 23
(g) "Solar grade silicon" means high -purity silicon used 24
exclusively in components of solar energy systems using photovoltaic 25
modules to capture direct sunlight. "Solar grade silicon" does not 26
include silicon used in semiconductors. 27
(h) "Stirling converter" means a device that produces electricity 28
by converting heat from a solar source utilizing a stirling engine.29
(i) "Thin film solar devices" means a nonparticipating substrate 30
on which various semiconducting materials are deposited to produce a 31
photovoltaic cell that is used to generate electricity.32
(5) A person reporting under the tax rate provided in this 33
section must file a complete annual tax performance report with the 34
department under RCW 82.32.534. 35
(6) This section expires July 1, 2032. 36
Sec. 23. RCW 82.04.298 and 2011 c 2 s 204 are each amended to 37
read as follows: 38
p. 36 HB 1320
(1) The amount of tax with respect to a qualified grocery 1
distribution cooperative's sales of groceries or related goods for 2
resale, excluding items subject to tax under RCW 82.04.260(4), to 3
customer-owners of the grocery distribution cooperative is equal to 4
the gross proceeds of sales of the grocery distribution cooperative 5
multiplied by the rate of ((one and one-half)) 1.65 percent.6
(2) A qualified grocery distribution cooperative is allowed a 7
deduction from the gross proceeds of sales of groceries or related 8
goods for resale, excluding items subject to tax under RCW 9
82.04.260(4), to customer-owners of the grocery distribution 10
cooperative that is equal to the portion of the gross proceeds of 11
sales for resale that represents the actual cost of the merchandise 12
sold by the grocery distribution cooperative to customer-owners.13
(3) The definitions in this subsection apply throughout this 14
section unless the context clearly requires otherwise.15
(a) "Grocery distribution cooperative" means an entity that sells 16
groceries and related items to customer-owners of the grocery 17
distribution cooperative and has customer-owners, in the aggregate, 18
who own a majority of the outstanding ownership interests of the 19
grocery distribution cooperative or of the entity controlling the 20
grocery distribution cooperative. "Grocery distribution cooperative" 21
includes an entity that controls a grocery distribution cooperative.22
(b) "Qualified grocery distribution cooperative" means:23
(i) A grocery distribution cooperative that has been determined 24
by a court of record of the state of Washington to be not engaged in 25
wholesaling or making sales at wholesale, within the meaning of RCW 26
82.04.270 or any similar provision of a municipal ordinance that 27
imposes a tax on gross receipts, gross proceeds of sales, or gross 28
income, with respect to purchases made by customer-owners, and 29
subsequently changes its form of doing business to make sales at 30
wholesale of groceries or related items to its customer-owners; or31
(ii) A grocery distribution cooperative that has acquired 32
substantially all of the assets of a grocery distribution cooperative 33
described in (b)(i) of this subsection. 34
(c) "Customer-owner" means a person who has an ownership interest 35
in a grocery distribution cooperative and purchases groceries and 36
related items at wholesale from that grocery distribution 37
cooperative. 38
(d) "Controlling" means holding fifty percent or more of the 39
voting interests of an entity and having at least equal power to 40
p. 37 HB 1320
direct or cause the direction of the management and policies of the 1
entity, whether through the ownership of voting securities, by 2
contract, or otherwise. 3
NEW SECTION. Sec. 24. RCW 82.32.805 and 82.32.808 do not apply 4
to this act.5
NEW SECTION. Sec. 25. Sections 1 through 8, 10 through 16, and 6
18 through 24 of this act take effect January 1, 2027.7
NEW SECTION. Sec. 26. Section 17 of this act takes effect 8
October 1, 2025.9
NEW SECTION. Sec. 27. Section 9 of this act takes effect 10
January 1, 2034.11
NEW SECTION. Sec. 28. Section 8 of this act expires January 1, 12
2034.13
--- END ---
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