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Senate Bill Report — SB 6445, As of January 22, 2020

Summary

A Senate Bill Report on SB 6445, as of January 22, 2020, from the Senate Committee on Financial Institutions, Economic Development & Trade. The bill concerns eliminating a business and occupation tax deduction for financial institutions to fund affordable housing, and the sponsors listed are Senators Kuderer, Das, Wilson, C., Hunt, Nguyen and Saldaña. The summary of the bill states that beginning August 1, 2020 the deduction of interest on loans secured by first mortgages or deeds of trust is repealed. By October 15, 2021, the Department of Revenue is directed to estimate any increase in state general fund revenues, and the state treasurer must transfer that amount into the housing trust fund beginning November 1, 2021. The bill takes effect on August 1, 2020.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Issuer
Congressional materials
Document type
Report
Date
2020-01-23
Case
2020 01 23 A26306 D210074 Bill Report 6445 Sba Fiet 20

Cite this document

“Senate Bill Report — SB 6445, As of January 22, 2020.” Original at app.leg.wa.gov, dated 2020-01-23. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-23-2020-01-23-a26306-d210074-bill-report-6445-sba-fiet-20/, SHA-256 d7a59fc92dff0e4261337d36cc5474826b4ce150138c6a8406ab45fbee8724a1.

Full text

                             SENATE BILL REPORT
                                   SB 6445

                                      As of January 22, 2020

Title: An act relating to eliminating a business and occupation tax deduction for financial
    institutions to fund affordable housing.

Brief Description: Eliminating a business and occupation tax deduction for financial
   institutions to fund affordable housing.

Sponsors: Senators Kuderer, Das, Wilson, C., Hunt, Nguyen and Saldaña.

Brief History:
   Committee Activity: Financial Institutions, Economic Development & Trade: 1/23/20.

                                      Brief Summary of Bill
          Ÿ Repeals the business and occupation tax deduction for interest on
            investments or loans secured by first mortgages or deeds of trust on non-
            transient residential properties for community banks.


SENATE  COMMITTEE                  ON      FINANCIAL          INSTITUTIONS,           ECONOMIC
DEVELOPMENT & TRADE

    Staff: Clint McCarthy (786-7319)

    Background: Washington's major business tax is the business and occupation (B&O) tax.
    The B&O tax is imposed on the gross receipts of business activities conducted within the
    state, without any deduction for the costs of doing business. Businesses must pay the B&O
    tax even though they may not have any profits or may be operating at a loss.

    A taxpayer may have more than one B&O tax rate, depending on the types of activities
    conducted. Major B&O tax rates are 0.471 percent for retailing; 0.484 percent for
    manufacturing, wholesaling, and extracting; and 1.5 percent for services and for activities not
    classified elsewhere. Financial institutions are subject to the 1.5 percent service and other
    B&O tax rate.




––––––––––––––––––––––
    This analysis was prepared by non-partisan legislative staff for the use of legislative
    members in their deliberations. This analysis is not a part of the legislation nor does it
    constitute a statement of legislative intent.

Senate Bill Report                              -1-                                          SB 6445
    Entities engaged in banking, loan, security, or other financial businesses may deduct interest
    on investments or loans secured by mortgages or deeds of trust. This exemption is limited to
    community banks, which are located in less than ten states.

    Summary of Bill: Beginning August 1, 2020, the deduction of interest on investments or
    loans secured by first mortgages or deeds of trust for entities engaged in banking, loan,
    security or other financial businesses is repealed. The statute that limited the deduction to
    community banks is also repealed. The interest and related fees would become fully taxable.
    By October 15, 2021, and each October 15th thereafter, the Department of Revenue is
    directed to estimate any increase in state general fund revenues as a result of repealing this
    deduction. After informing the state treasurer of any increase, the state treasurer must
    transfer that amount from the general fund into the housing trust fund beginning November
    1, 2021, and by each November 1st thereafter. The Department of Revenue may not make
    any adjustments to the estimate after the state treasurer makes the fund transfer.

    Appropriation: None.

    Fiscal Note: Available.

    Creates Committee/Commission/Task Force that includes Legislative members: No.

    Effective Date: The bill takes effect on August 1, 2020.




Senate Bill Report                             -2-                                        SB 6445

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2020-01-23_a26306_d210074_bill-report-6445-sba-fiet-20.pdf
Original
app.leg.wa.gov
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