Notice of Introduction for House Bill 1906 - 10 Year Analysis Complete

You are receiving this email as a subscriber to the Initiative 960 email list. RCW 43.135.031 (I-960) requires that notices be sent each time a bill that raises taxes or fees is: introduced in either house; scheduled for a public hearing; approved by any legislative committee; or passed by either house of the Legislature.

Please note: This email message was sent from a notification-only address. Please do not reply to this message.

HB 1906, titled AN ACT Relating to the vessel length requirement in obtaining nonresident vessel permits, has been introduced in the House of Representatives. The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Department of Licensing:

DOL cash receipts are indeterminate but expected to be minimal. Changes in the bill will increase the number of vessels that are required to obtain a nonresident vessel permit. However, it is unknown how many vessels there will be subject to the 300 feet provision. The increase in revenue collections by DOL is anticipated to be minimal and less than $5,000 per fiscal year. Current forecast for 0-200 ft is about $7,000 per year.

Department of Revenue:

CURRENT LAW

To operate a vessel on Washington's waterways, a nonresident owner must first obtain a nonresident vessel permit, subject to specific restrictions. The owner must apply for a permit on or before the 61st day of the visit to stay in the state for an additional 60 days if they intend to operate the vessel on Washington waters for a period longer than 60 days without owing use tax. 

Permits apply to vessels between 30 and 200 feet.

Nonresident skippered charters owe use tax during their stay in Washington waters on the fair bare-boat rental value. 

Vessels can operate in Washington with a permit for a maximum of six months out of a 12-month period. The permit allows for:

- Personal use.

- Skippered charters, to include transit to and from a charter.

PROPOSAL

This proposal increases the maximum qualifying vessel length for skippered charter vessels and vessels owned by non-natural persons from 200 to 300 feet for the nonresident vessel permit and expires January 1, 2029. The change does not apply to natural persons acquiring permits for personal use.

EFFECTIVE DATE

The bill takes effect 90 days after final adjournment of the session.

ASSUMPTIONS

- Based on Department of Revenue (department) and Department of Licensing data, we were unable to identify vessels between 200 and 300 feet that are paying use tax under current law.

- If this legislation passes and nonresident vessels between 200 and 300 feet enter Washington waters, there could be a negative impact to revenues. However, current data does not indicate that there will be a revenue impact.

DATA SOURCES

- Department of Revenue, Use tax data

- Department of Licensing, Vessel data

REVENUE ESTIMATES 

This legislation results in no revenue impact to taxes administered by the department.

Ten-year projection prepared in consultation with the following agencies:

Department of Revenue
Department of Licensing


Bill sponsors and contact information:




Legislative Bill Information Website: http://apps.leg.wa.gov/billinfo/

Initiative 960 Website: http://www.ofm.wa.gov/tax/default.asp