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Senate Bill Report — SB 5445, As of February 10, 2021

Summary

Senate Bill Report SB 5445 as of February 10, 2021, for the Senate Committee on Business, Financial Services & Trade, on an act relating to creating a business and occupation tax deduction for interest earned on public funds. Sponsors are Senators Holy and Liias. The brief summary states that the bill creates the deduction for financial institutions that qualify as public depositories, on investment and interest income derived from public funds deposited, and that the deductions do not apply to credit unions. The background describes a public depository as a financial institution approved by the Washington Public Deposit Protection Commission. The bill takes effect on October 1, 2021.

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
2021-02-11
Case
2021 02 11 A28532 D228611 Bill Report 5445 Sba Bfst 21

Cite this document

“Senate Bill Report — SB 5445, As of February 10, 2021.” Original at app.leg.wa.gov, dated 2021-02-11. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-02-11-2021-02-11-a28532-d228611-bill-report-5445-sba-bfst-21/, SHA-256 4d23bc0e2d5282de83fcd86b075f1dbcbf750340cf18b5ee533d691f22005b2d.

Full text

                            SENATE BILL REPORT
                                  SB 5445

                                     As of February 10, 2021

Title: An act relating to creating a business and occupation tax deduction for interest earned on
     public funds.

Brief Description: Creating a business and occupation tax deduction for interest earned on
     public funds.

Sponsors: Senators Holy and Liias.

Brief History:
     Committee Activity: Business, Financial Services & Trade: 2/11/21.


                                     Brief Summary of Bill
           • Creates a business and occupation tax deduction for financial institutions
             that qualify as public depositories on investment and interest income
             derived from the public funds held in deposit.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: Public Depository and Public Funds. A public depository is a financial
     institution approved by the Washington Public Deposit Protection Commission
     (commission) to hold public deposits. The commission is administered through the office
     of the Washington State Treasurer and is comprised of the state treasurer, Governor, and
     Lieutenant Governor. It ensures public funds deposited in approved financial institutions
     are protected if a financial institution becomes insolvent.

     Public funds are moneys under the control of a treasurer, the state treasurer or other
     custodian, held for the benefit of the state or any of its political subdivisions including
     moneys held as trustee.



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

Senate Bill Report                              -1-                                             SB 5445
     Business and Occupation Tax. The state business and occupation (B&O) tax is a gross
     receipts tax. It is measured on the value of products, gross proceeds of sale, or gross
     income of the business. The B&O tax rate varies by business classification. Though public
     entities are exempt from paying B&O tax, investment earnings derived from the
     governmental funds deposited are subject to the tax through the financial institution.

     Several deductions for the B&O tax are available to certain entities under state law.

     Summary of Bill: Interest or other investment earnings derived from public funds may be
     deducted from the measure of tax amounts received by a public depositary in computing the
     B&O tax. These deductions do not apply to credit unions.

     This is not subject to the statutory requirements for a tax preference performance statement,
     a review by the Joint Legislative Audit and Review Committee, and a 10-year expiration.

     Appropriation: None.

     Fiscal Note: Requested on February 9, 2021.

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

     Effective Date: The bill takes effect on October 1, 2021.




Senate Bill Report                             -2-                                           SB 5445

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