Notice of Introduction for House Bill 2502 - Update: 10 Year Analysis Complete

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UPDATE: The 10 year analysis for HB 2502, titled AN ACT Relating to improving local government funding by removing certain sales and use tax exemptions, has been completed. 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 Revenue:

CURRENT LAW:

Charges for janitorial services are exempt from sales tax, but a business providing janitorial services is subject to the service and other activities business and occupation (B&O) tax classification. 

State and local retail sales and use taxes apply to the selling price or the use of tangible personal property and certain services. By law, some items or services are exempt from sales tax.

The state retail sales and use taxes rate is 6.5% while local government tax rates vary depending on what local options they choose to fund with local sales and use taxes. Local options include public transit, criminal justice, public safety, emergency communications, public facility districts, and passenger ferries.

PROPOSAL:

This legislation makes janitorial services subject to sales tax and retail B&O tax. 

This bill also removes certain exemptions only for local governments' sales and use taxes. Included in this proposal are:

- Waste vegetable oil.

- Rental equipment related to motion picture production.

- Computer equipment, including parts and services, sold to printers for publishers.

- Charges for direct mail delivery.

- Gun safes.

- Anaerobic digester equipment 

- Biogas equipment used in landfills.

- Equipment used to generate electricity.

- Server equipment

- Computer parts used to manufacture commercial aircraft.

State sales and use taxes continue not to apply to these items.

EFFECTIVE DATE:

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

As drafted, this bill is non-administrable. The revenue impact of this bill is indeterminate.

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

Department of Revenue


Bill sponsors and contact information:

Representative Sharon Wylie, Prime Sponsor
Democrat
(360) 786-7924
sharon.wylie@leg.wa.gov

Representative Lisa Parshley
Democrat
(360) 786-7992
Lisa.Parshley@leg.wa.gov

Representative Shaun Scott
Democrat
(360) 786-7920
Shaun.Scott@leg.wa.gov

Representative Natasha Hill
Democrat
(360) 786-7888
Natasha.Hill@leg.wa.gov

Representative Nicole Macri
Democrat
(360) 786-7826
nicole.macri@leg.wa.gov




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

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