Bill - SB 5440, Manufacturing Tax Reform to Preserve Aerospace and Manufacturing Jobs (67th Legislature, 2021)
Summary
Senate Bill 5440 of the State of Washington, 67th Legislature, 2021 Regular Session, by Senators Wilson, J., Fortunato, and Frockt. It was read first time 02/09/21 and referred to the Committee on Business, Financial Services & Trade. The bill is an act relating to manufacturing tax reform to preserve aerospace and other manufacturing jobs in Washington, amending RCW 82.04.240, 82.04.2404, 82.04.260, 82.04.2909, 82.04.294, 82.04.280, and 82.32.790. Section 1 states a finding that the manufacturing industry had lost more than 43,000 jobs during the 21st century, and the amended text of Sections 2 and 3 shows a rate of 0.00 percent. Section 10 states that the act takes effect October 1, 2021.
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S-0940.2
SENATE BILL 5440
State of Washington 67th Legislature 2021 Regular Session
By Senators Wilson, J., Fortunato, and Frockt
Read first time 02/09/21. Referred to Committee on Business,
Financial Services & Trade.
1 AN ACT Relating to manufacturing tax reform to preserve aerospace
2 and other manufacturing jobs in Washington; amending RCW 82.04.240,
3 82.04.2404, 82.04.260, 82.04.2909, 82.04.294, 82.04.280, and
4 82.32.790; creating a new section; repealing 2017 3rd sp.s. c 37 s
5 518, 2017 c 135 s 9, 2010 c 114 s 104, and 2003 c 149 s 3; and
6 providing an effective date.
7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
8 NEW SECTION. Sec. 1. The legislature finds that the
9 manufacturing industry in Washington is an important source of jobs
10 that pay significantly more than the average state wage. The
11 legislature also finds that even prior to the coronavirus pandemic,
12 the manufacturing industry had lost more than 43,000 jobs during the
13 21st century, while other leading Washington industries have
14 collectively added hundreds of thousands of jobs. The legislature
15 further finds that the coronavirus pandemic has exposed the
16 detriments of limited manufacturing capacity at times when the people
17 need a reliable supply of basic core products and goods.
18 It is the intent of the legislature to encourage a resurgence of
19 manufacturing capacity in Washington and the creation of family-wage
20 jobs by reducing the tax burden on the manufacturing industry. It is
21 intended that this act will not only enhance the security of the
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1 public by promoting self-sufficiency, but also draw new industries to
2 Washington.
3 Sec. 2. RCW 82.04.240 and 2004 c 24 s 4 are each amended to read
4 as follows:
5 Upon every person engaging within this state in business as a
6 manufacturer or processor for hire, except persons taxable as
7 manufacturers or processors for hire under other provisions of this
8 chapter; as to such persons the amount of the tax with respect to
9 such business shall be equal to the value of the products, including
10 by-products, manufactured or processed, multiplied by the rate of
11 ((0.484)) 0.00 percent.
12 The measure of the tax is the value of the products, including
13 by-products, so manufactured regardless of the place of sale or the
14 fact that deliveries may be made to points outside the state.
15 Sec. 3. RCW 82.04.2404 and 2017 3rd sp.s. c 37 s 503 are each
16 amended to read as follows:
17 (1) Upon every person engaging within this state in the business
18 of manufacturing or processing for hire semiconductor materials, as
19 to such persons the amount of tax with respect to such business is,
20 in the case of manufacturers, equal to the value of the product
21 manufactured, or, in the case of processors for hire, equal to the
22 gross income of the business, multiplied by the rate of ((0.275))
23 0.00 percent.
24 (2) For the purposes of this section "semiconductor materials"
25 means silicon crystals, silicon ingots, raw polished semiconductor
26 wafers, and compound semiconductor wafers.
27 (3) ((A person reporting under the tax rate provided in this
28 section must file a complete annual tax performance report with the
29 department under RCW 82.32.534.
30 (4) Any person who has claimed the preferential tax rate under
31 this section must reimburse the department for fifty percent of the
32 amount of the tax preference under this section, if:
33 (a) The number of persons employed by the person claiming the tax
34 preference is less than ninety percent of the person's three-year
35 employment average for the three years immediately preceding the year
36 in which the preferential tax rate is claimed; or
37 (b) The person is subject to a review under section 501(4)(a),
38 chapter 37, Laws of 2017 3rd sp. sess. and such person does not meet
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1 performance criteria in section 501(4)(a), chapter 37, Laws of 2017
2 3rd sp. sess.
3 (5))) This section expires December 1, 2028.
4 Sec. 4. RCW 82.04.260 and 2020 c 165 s 3 are each amended to
5 read as follows:
6 (1) Upon every person engaging within this state in the business
7 of manufacturing:
8 (a) Wheat into flour, barley into pearl barley, soybeans into
9 soybean oil, canola into canola oil, canola meal, or canola by-
10 products, or sunflower seeds into sunflower oil; as to such persons
11 the amount of tax with respect to such business is equal to the value
12 of the flour, pearl barley, oil, canola meal, or canola by-product
13 manufactured, multiplied by the rate of ((0.138)) 0.00 percent;
14 (b) Beginning July 1, 2025, seafood products that remain in a
15 raw, raw frozen, or raw salted state at the completion of the
16 manufacturing by that person; or selling manufactured seafood
17 products that remain in a raw, raw frozen, or raw salted state at the
18 completion of the manufacturing, to purchasers who transport in the
19 ordinary course of business the goods out of this state; as to such
20 persons the amount of tax with respect to such business is equal to
21 the value of the products manufactured multiplied by the rate of 0.00
22 percent or the gross proceeds derived from such sales, multiplied by
23 the rate of 0.138 percent. Sellers must keep and preserve records for
24 the period required by RCW 82.32.070 establishing that the goods were
25 transported by the purchaser in the ordinary course of business out
26 of this state;
27 (c)(i) Except as provided otherwise in (c)(iii) of this
28 subsection, from July 1, 2025, until January 1, 2036, dairy products;
29 or selling dairy products that the person has manufactured to
30 purchasers who either transport in the ordinary course of business
31 the goods out of state or purchasers who use such dairy products as
32 an ingredient or component in the manufacturing of a dairy product;
33 as to such persons the tax imposed is equal to the value of the
34 products manufactured multiplied by the rate of 0.00 percent or the
35 gross proceeds derived from such sales multiplied by the rate of
36 0.138 percent. Sellers must keep and preserve records for the period
37 required by RCW 82.32.070 establishing that the goods were
38 transported by the purchaser in the ordinary course of business out
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1 of this state or sold to a manufacturer for use as an ingredient or
2 component in the manufacturing of a dairy product.
3 (ii) For the purposes of this subsection (1)(c), "dairy products"
4 means:
5 (A) Products, not including any marijuana-infused product, that
6 as of September 20, 2001, are identified in 21 C.F.R., chapter 1,
7 parts 131, 133, and 135, including by-products from the manufacturing
8 of the dairy products, such as whey and casein; and
9 (B) Products comprised of not less than ((seventy)) 70 percent
10 dairy products that qualify under (c)(ii)(A) of this subsection,
11 measured by weight or volume.
12 (iii) The preferential tax rate provided to taxpayers under this
13 subsection (1)(c) does not apply to sales of dairy products on or
14 after July 1, 2023, where a dairy product is used by the purchaser as
15 an ingredient or component in the manufacturing in Washington of a
16 dairy product;
17 (d)(i) Beginning July 1, 2025, fruits or vegetables by canning,
18 preserving, freezing, processing, or dehydrating fresh fruits or
19 vegetables, or selling at wholesale fruits or vegetables manufactured
20 by the seller by canning, preserving, freezing, processing, or
21 dehydrating fresh fruits or vegetables and sold to purchasers who
22 transport in the ordinary course of business the goods out of this
23 state; as to such persons the amount of tax with respect to such
24 business is equal to the value of the products manufactured
25 multiplied by the rate of 0.00 percent or the gross proceeds derived
26 from such sales multiplied by the rate of 0.138 percent. Sellers must
27 keep and preserve records for the period required by RCW 82.32.070
28 establishing that the goods were transported by the purchaser in the
29 ordinary course of business out of this state.
30 (ii) For purposes of this subsection (1)(d), "fruits" and
31 "vegetables" do not include marijuana, useable marijuana, or
32 marijuana-infused products; and
33 (e) Wood biomass fuel; as to such persons the amount of tax with
34 respect to the business is equal to the value of wood biomass fuel
35 manufactured, multiplied by the rate of ((0.138)) 0.00 percent. For
36 the purposes of this section, "wood biomass fuel" means a liquid or
37 gaseous fuel that is produced from lignocellulosic feedstocks,
38 including wood, forest, or field residue and dedicated energy crops,
39 and that does not include wood treated with chemical preservations
40 such as creosote, pentachlorophenol, or copper-chrome-arsenic.
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1 (2) Upon every person engaging within this state in the business
2 of splitting or processing dried peas; as to such persons the amount
3 of tax with respect to such business is equal to the value of the
4 peas split or processed, multiplied by the rate of ((0.138)) 0.00
5 percent.
6 (3) Upon every nonprofit corporation and nonprofit association
7 engaging within this state in research and development, as to such
8 corporations and associations, the amount of tax with respect to such
9 activities is equal to the gross income derived from such activities
10 multiplied by the rate of 0.484 percent.
11 (4) Upon every person engaging within this state in the business
12 of slaughtering, breaking and/or processing perishable meat products
13 and/or selling the same at wholesale only and not at retail; as to
14 such persons the tax imposed is equal to the gross proceeds derived
15 from such sales multiplied by the rate of ((0.138)) 0.00 percent.
16 (5)(a) Upon every person engaging within this state in the
17 business of acting as a travel agent or tour operator and whose
18 annual taxable amount for the prior calendar year was ((two hundred
19 fifty thousand dollars)) $250,000 or less; as to such persons the
20 amount of the tax with respect to such activities is equal to the
21 gross income derived from such activities multiplied by the rate of
22 0.275 percent.
23 (b) Upon every person engaging within this state in the business
24 of acting as a travel agent or tour operator and whose annual taxable
25 amount for the calendar year was more than ((two hundred fifty
26 thousand dollars)) $250,000; as to such persons the amount of the tax
27 with respect to such activities is equal to the gross income derived
28 from such activities multiplied by the rate of 0.275 percent through
29 June 30, 2019, and 0.9 percent beginning July 1, 2019.
30 (6) Upon every person engaging within this state in business as
31 an international steamship agent, international customs house broker,
32 international freight forwarder, vessel and/or cargo charter broker
33 in foreign commerce, and/or international air cargo agent; as to such
34 persons the amount of the tax with respect to only international
35 activities is equal to the gross income derived from such activities
36 multiplied by the rate of 0.275 percent.
37 (7) Upon every person engaging within this state in the business
38 of stevedoring and associated activities pertinent to the movement of
39 goods and commodities in waterborne interstate or foreign commerce;
40 as to such persons the amount of tax with respect to such business is
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1 equal to the gross proceeds derived from such activities multiplied
2 by the rate of 0.275 percent. Persons subject to taxation under this
3 subsection are exempt from payment of taxes imposed by chapter 82.16
4 RCW for that portion of their business subject to taxation under this
5 subsection. Stevedoring and associated activities pertinent to the
6 conduct of goods and commodities in waterborne interstate or foreign
7 commerce are defined as all activities of a labor, service or
8 transportation nature whereby cargo may be loaded or unloaded to or
9 from vessels or barges, passing over, onto or under a wharf, pier, or
10 similar structure; cargo may be moved to a warehouse or similar
11 holding or storage yard or area to await further movement in import
12 or export or may move to a consolidation freight station and be
13 stuffed, unstuffed, containerized, separated or otherwise segregated
14 or aggregated for delivery or loaded on any mode of transportation
15 for delivery to its consignee. Specific activities included in this
16 definition are: Wharfage, handling, loading, unloading, moving of
17 cargo to a convenient place of delivery to the consignee or a
18 convenient place for further movement to export mode; documentation
19 services in connection with the receipt, delivery, checking, care,
20 custody and control of cargo required in the transfer of cargo;
21 imported automobile handling prior to delivery to consignee; terminal
22 stevedoring and incidental vessel services, including but not limited
23 to plugging and unplugging refrigerator service to containers,
24 trailers, and other refrigerated cargo receptacles, and securing ship
25 hatch covers.
26 (8)(a) Upon every person engaging within this state in the
27 business of disposing of low-level waste, as defined in RCW
28 ((43.145.010)) 70A.380.010; as to such persons the amount of the tax
29 with respect to such business is equal to the gross income of the
30 business, excluding any fees imposed under chapter ((43.200)) 70A.384
31 RCW, multiplied by the rate of 3.3 percent.
32 (b) If the gross income of the taxpayer is attributable to
33 activities both within and without this state, the gross income
34 attributable to this state must be determined in accordance with the
35 methods of apportionment required under RCW 82.04.460.
36 (9) Upon every person engaging within this state as an insurance
37 producer or title insurance agent licensed under chapter 48.17 RCW or
38 a surplus line broker licensed under chapter 48.15 RCW; as to such
39 persons, the amount of the tax with respect to such licensed
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1 activities is equal to the gross income of such business multiplied
2 by the rate of 0.484 percent.
3 (10) Upon every person engaging within this state in business as
4 a hospital, as defined in chapter 70.41 RCW, that is operated as a
5 nonprofit corporation or by the state or any of its political
6 subdivisions, as to such persons, the amount of tax with respect to
7 such activities is equal to the gross income of the business
8 multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5
9 percent thereafter.
10 (11)(a) Beginning October 1, 2005, upon every person engaging
11 within this state in the business of manufacturing commercial
12 airplanes, or components of such airplanes, or making sales, at
13 retail or wholesale, of commercial airplanes or components of such
14 airplanes, manufactured by the seller, as to such persons the amount
15 of tax with respect to such business is, in the case of
16 manufacturers, equal to the value of the product manufactured and the
17 gross proceeds of sales of the product manufactured, or in the case
18 of processors for hire, equal to the gross income of the business,
19 multiplied by the rate of:
20 (i) 0.4235 percent from October 1, 2005, through June 30, 2007;
21 (ii) 0.2904 percent beginning July 1, 2007, through March 31,
22 2020; ((and))
23 (iii) Beginning April 1, 2020, 0.484 percent, subject to any
24 reduction required under (e) of this subsection (11). The tax rate in
25 this subsection (11)(a)(iii) applies to ((all)) retailing and
26 wholesaling business activities described in this subsection (11)(a);
27 and
28 (iv) Beginning July 1, 2021, 0.00 percent for manufacturing
29 activities described in this subsection (11)(a).
30 (b) Beginning July 1, 2008, upon every person who is not eligible
31 to report under the provisions of (a) of this subsection (11) and is
32 engaging within this state in the business of manufacturing tooling
33 specifically designed for use in manufacturing commercial airplanes
34 or components of such airplanes, or making sales, at retail or
35 wholesale, of such tooling manufactured by the seller, as to such
36 persons the amount of tax with respect to such business is, in the
37 case of manufacturers, equal to the value of the product manufactured
38 and the gross proceeds of sales of the product manufactured, or in
39 the case of processors for hire, be equal to the gross income of the
40 business, multiplied by the rate of:
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1 (i) 0.2904 percent through March 31, 2020; and
2 (ii) Beginning April 1, 2020, the following rates, which are
3 subject to any reduction required under (e) of this subsection (11):
4 (A) The generally applicable rate under ((RCW 82.04.250(1))) this
5 chapter on the business of making retail or wholesale sales of
6 tooling specifically designed for use in manufacturing commercial
7 airplanes or components of such airplanes; and
8 (B) ((0.484)) 0.00 percent on all other business activities
9 described in this subsection (11)(b) beginning July 1, 2021.
10 (c) For the purposes of this subsection (11), "commercial
11 airplane" and "component" have the same meanings as provided in RCW
12 82.32.550.
13 (d)(i) In addition to all other requirements under this title, a
14 person reporting ((under the tax rate)) a preferential tax rate for
15 retailing or wholesaling activities provided in this subsection (11)
16 must file a complete annual tax performance report with the
17 department under RCW 82.32.534. However, this requirement does not
18 apply to persons reporting under the tax rate in (a)(iii) of this
19 subsection (11), so long as that rate remains 0.484 percent, or under
20 any of the tax rates in (b)(ii)(A) and (B) of this subsection (11),
21 so long as those tax rates remain the rate imposed pursuant to RCW
22 82.04.250(1) and 0.484 percent, respectively.
23 (ii) Nothing in (d)(i) of this subsection (11) may be construed
24 as affecting the obligation of a person reporting under a tax rate
25 provided in this subsection (11) to file a complete annual tax
26 performance report with the department under RCW 82.32.534: (A)
27 Pursuant to another provision of this title as a result of claiming a
28 tax credit or exemption; or (B) pursuant to (d)(i) of this subsection
29 (11) as a result of claiming the tax rates in (a)(ii) or (b)(i) of
30 this subsection (11) for periods ending before April 1, 2020.
31 (e)(i) After March 31, 2021, the tax rates under (a)(iii) and
32 (b)(ii)(A) of this subsection (11) must be reduced to 0.357 percent
33 for retailing and wholesaling activities provided the conditions in
34 RCW 82.04.2602 are met. The effective date of the rates authorized
35 under this subsection (11)(e) must occur on the first day of the next
36 calendar quarter that is at least ((sixty)) 60 days after the
37 department receives the last of the two written notices pursuant to
38 RCW 82.04.2602 (3) and (4).
39 (ii) Both a significant commercial airplane manufacturer
40 separately and the rest of the aerospace industry as a whole,
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1 receiving the rate of 0.357 percent under this subsection (11)(e) are
2 subject to the aerospace apprenticeship utilization rates required
3 under RCW 49.04.220 by April 1, 2026, or five years after the
4 effective date of the 0.357 percent rate authorized under this
5 subsection (11)(e), whichever is later, as determined by the
6 department of labor and industries.
7 (iii) The provisions of RCW 82.32.805 and 82.32.808 do not apply
8 to this subsection (11)(e).
9 (f)(i) Except as provided in (f)(ii) of this subsection (11),
10 this subsection (11) does not apply on and after July 1, 2040.
11 (ii) With respect to ((the manufacturing of commercial airplanes
12 or)) making sales, at retail or wholesale, of commercial airplanes,
13 this subsection (11) does not apply on and after July 1st of the year
14 in which the department makes a determination that any final assembly
15 or wing assembly of any version or variant of a commercial airplane
16 that is the basis of a siting of a significant commercial airplane
17 manufacturing program in the state under RCW 82.32.850 has been sited
18 outside the state of Washington. This subsection (11)(f)(ii) only
19 applies to the ((manufacturing or)) sale of commercial airplanes that
20 are the basis of a siting of a significant commercial airplane
21 manufacturing program in the state under RCW 82.32.850. This
22 subsection (11)(f)(ii) continues to apply during the time that a
23 person is subject to the tax rate in (a)(iii) of this subsection
24 (11).
25 (g) For the purposes of this subsection, "a significant
26 commercial airplane manufacturer" means a manufacturer of commercial
27 airplanes with at least ((fifty thousand)) 50,000 full-time employees
28 in Washington as of January 1, 2021.
29 (12)(a) Until July 1, 2045, upon every person engaging within
30 this state in the business of extracting timber or extracting for
31 hire timber; as to such persons the amount of tax with respect to the
32 business is, in the case of extractors, equal to the value of
33 products, including by-products, extracted, or in the case of
34 extractors for hire, equal to the gross income of the business,
35 multiplied by the rate of 0.4235 percent from July 1, 2006, through
36 June 30, 2007, and ((0.2904)) 0.00 percent from July 1, 2007, through
37 June 30, 2045.
38 (b) Until July 1, 2045, upon every person engaging within this
39 state in the business of manufacturing or processing for hire: (i)
40 Timber into timber products or wood products; (ii) timber products
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1 into other timber products or wood products; or (iii) products
2 defined in RCW 19.27.570(1); as to such persons the amount of the tax
3 with respect to the business is, in the case of manufacturers, equal
4 to the value of products, including by-products, manufactured, or in
5 the case of processors for hire, equal to the gross income of the
6 business, multiplied by the rate of 0.4235 percent from July 1, 2006,
7 through June 30, 2007, and ((0.2904)) 0.00 percent from July 1, 2007,
8 through June 30, 2045.
9 (c) Until July 1, 2045, upon every person engaging within this
10 state in the business of selling at wholesale: (i) Timber extracted
11 by that person; (ii) timber products manufactured by that person from
12 timber or other timber products; (iii) wood products manufactured by
13 that person from timber or timber products; or (iv) products defined
14 in RCW 19.27.570(1) manufactured by that person; as to such persons
15 the amount of the tax with respect to the business is equal to the
16 gross proceeds of sales of the timber, timber products, wood
17 products, or products defined in RCW 19.27.570(1) multiplied by the
18 rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and
19 ((0.2904)) 0.00 percent from July 1, 2007, through June 30, 2045.
20 (d) Until July 1, 2045, upon every person engaging within this
21 state in the business of selling standing timber; as to such persons
22 the amount of the tax with respect to the business is equal to the
23 gross income of the business multiplied by the rate of 0.2904
24 percent. For purposes of this subsection (12)(d), "selling standing
25 timber" means the sale of timber apart from the land, where the buyer
26 is required to sever the timber within ((thirty)) 30 months from the
27 date of the original contract, regardless of the method of payment
28 for the timber and whether title to the timber transfers before,
29 upon, or after severance.
30 (e) For purposes of this subsection, the following definitions
31 apply:
32 (i) "Biocomposite surface products" means surface material
33 products containing, by weight or volume, more than ((fifty)) 50
34 percent recycled paper and that also use nonpetroleum-based phenolic
35 resin as a bonding agent.
36 (ii) "Paper and paper products" means products made of interwoven
37 cellulosic fibers held together largely by hydrogen bonding. "Paper
38 and paper products" includes newsprint; office, printing, fine, and
39 pressure-sensitive papers; paper napkins, towels, and toilet tissue;
40 kraft bag, construction, and other kraft industrial papers;
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1 paperboard, liquid packaging containers, containerboard, corrugated,
2 and solid-fiber containers including linerboard and corrugated
3 medium; and related types of cellulosic products containing
4 primarily, by weight or volume, cellulosic materials. "Paper and
5 paper products" does not include books, newspapers, magazines,
6 periodicals, and other printed publications, advertising materials,
7 calendars, and similar types of printed materials.
8 (iii) "Recycled paper" means paper and paper products having
9 fifty percent or more of their fiber content that comes from
10 postconsumer waste. For purposes of this subsection (12)(e)(iii),
11 "postconsumer waste" means a finished material that would normally be
12 disposed of as solid waste, having completed its life cycle as a
13 consumer item.
14 (iv) "Timber" means forest trees, standing or down, on privately
15 or publicly owned land. "Timber" does not include Christmas trees
16 that are cultivated by agricultural methods or short-rotation
17 hardwoods as defined in RCW 84.33.035.
18 (v) "Timber products" means:
19 (A) Logs, wood chips, sawdust, wood waste, and similar products
20 obtained wholly from the processing of timber, short-rotation
21 hardwoods as defined in RCW 84.33.035, or both;
22 (B) Pulp, including market pulp and pulp derived from recovered
23 paper or paper products; and
24 (C) Recycled paper, but only when used in the manufacture of
25 biocomposite surface products.
26 (vi) "Wood products" means paper and paper products; dimensional
27 lumber; engineered wood products such as particleboard, oriented
28 strand board, medium density fiberboard, and plywood; wood doors;
29 wood windows; and biocomposite surface products.
30 (f) Except for small harvesters as defined in RCW 84.33.035, a
31 person reporting under the tax rate provided in this subsection (12)
32 must file a complete annual tax performance report with the
33 department under RCW 82.32.534.
34 (g) Nothing in this subsection (12) may be construed to affect
35 the taxation of any activity defined as a retail sale in RCW
36 82.04.050(2) (b) or (c), defined as a wholesale sale in RCW
37 82.04.060(2), or taxed under RCW 82.04.280(1)(g).
38 (13) Upon every person engaging within this state in inspecting,
39 testing, labeling, and storing canned salmon owned by another person,
40 as to such persons, the amount of tax with respect to such activities
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1 is equal to the gross income derived from such activities multiplied
2 by the rate of 0.484 percent.
3 (14)(a) Upon every person engaging within this state in the
4 business of printing a newspaper, publishing a newspaper, or both,
5 the amount of tax on such business is equal to the gross income of
6 the business multiplied by the rate of 0.35 percent until July 1,
7 2024, and 0.484 percent thereafter.
8 (b) A person reporting under the tax rate provided in this
9 subsection (14) must file a complete annual tax performance report
10 with the department under RCW 82.32.534.
11 Sec. 5. RCW 82.04.2909 and 2017 c 135 s 12 are each amended to
12 read as follows:
13 (1) Upon every person who is an aluminum smelter engaging within
14 this state in the business of manufacturing aluminum; 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
17 manufactured, or in the case of processors for hire, equal to the
18 gross income of the business, multiplied by the rate of ((.2904))
19 0.00 percent.
20 (2) Upon every person who is an aluminum smelter engaging within
21 this state in the business of making sales at wholesale of aluminum
22 manufactured by that person, as to such persons the amount of tax
23 with respect to such business is equal to the gross proceeds of sales
24 of the aluminum multiplied by the rate of .2904 percent.
25 (3) A person reporting under the tax rate provided in subsection
26 (2) of this section must file a complete annual tax performance
27 report with the department under RCW 82.32.534.
28 (4) This section expires January 1, 2027.
29 Sec. 6. RCW 82.04.294 and 2017 3rd sp.s. c 37 s 403 are each
30 amended to read as follows:
31 (1) Upon every person engaging within this state in the business
32 of manufacturing solar energy systems using photovoltaic modules or
33 stirling converters, or of manufacturing solar grade silicon, silicon
34 solar wafers, silicon solar cells, thin film solar devices, or
35 compound semiconductor solar wafers to be used exclusively in
36 components of such systems; as to such persons the amount of tax with
37 respect to such business is, in the case of manufacturers, equal to
38 the value of the product manufactured, or in the case of processors
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1 for hire, equal to the gross income of the business, multiplied by
2 the rate of ((0.275)) 0.00 percent.
3 (2) Upon every person engaging within this state in the business
4 of making sales at wholesale of solar energy systems using
5 photovoltaic modules or stirling converters, or of solar grade
6 silicon, silicon solar wafers, silicon solar cells, thin film solar
7 devices, or compound semiconductor solar wafers to be used
8 exclusively in components of such systems, manufactured by that
9 person; as to such persons the amount of tax with respect to such
10 business is equal to the gross proceeds of sales of the solar energy
11 systems using photovoltaic modules or stirling converters, or of the
12 solar grade silicon to be used exclusively in components of such
13 systems, multiplied by the rate of 0.275 percent.
14 (3) Silicon solar wafers, silicon solar cells, thin film solar
15 devices, solar grade silicon, or compound semiconductor solar wafers
16 are "semiconductor materials" for the purposes of RCW 82.08.9651 and
17 82.12.9651.
18 (4) The definitions in this subsection apply throughout this
19 section.
20 (a) "Compound semiconductor solar wafers" means a semiconductor
21 solar wafer composed of elements from two or more different groups of
22 the periodic table.
23 (b) "Module" means the smallest nondivisible self-contained
24 physical structure housing interconnected photovoltaic cells and
25 providing a single direct current electrical output.
26 (c) "Photovoltaic cell" means a device that converts light
27 directly into electricity without moving parts.
28 (d) "Silicon solar cells" means a photovoltaic cell manufactured
29 from a silicon solar wafer.
30 (e) "Silicon solar wafers" means a silicon wafer manufactured for
31 solar conversion purposes.
32 (f) "Solar energy system" means any device or combination of
33 devices or elements that rely upon direct sunlight as an energy
34 source for use in the generation of electricity.
35 (g) "Solar grade silicon" means high-purity silicon used
36 exclusively in components of solar energy systems using photovoltaic
37 modules to capture direct sunlight. "Solar grade silicon" does not
38 include silicon used in semiconductors.
39 (h) "Stirling converter" means a device that produces electricity
40 by converting heat from a solar source utilizing a stirling engine.
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1 (i) "Thin film solar devices" means a nonparticipating substrate
2 on which various semiconducting materials are deposited to produce a
3 photovoltaic cell that is used to generate electricity.
4 (5) A person reporting under the tax rate provided in subsection
5 (2) of this section must file a complete annual tax performance
6 report with the department under RCW 82.32.534.
7 (6) This section expires July 1, 2027.
8 Sec. 7. RCW 82.04.280 and 2019 c 449 s 1 are each amended to
9 read as follows:
10 (1) Upon every person engaging within this state in the business
11 of: (a) Printing materials other than newspapers, and of publishing
12 periodicals or magazines; (b) building, repairing or improving any
13 street, place, road, highway, easement, right-of-way, mass public
14 transportation terminal or parking facility, bridge, tunnel, or
15 trestle which is owned by a municipal corporation or political
16 subdivision of the state or by the United States and which is used or
17 to be used, primarily for foot or vehicular traffic including mass
18 transportation vehicles of any kind and including any readjustment,
19 reconstruction or relocation of the facilities of any public, private
20 or cooperatively owned utility or railroad in the course of such
21 building, repairing or improving, the cost of which readjustment,
22 reconstruction, or relocation, is the responsibility of the public
23 authority whose street, place, road, highway, easement, right-of-way,
24 mass public transportation terminal or parking facility, bridge,
25 tunnel, or trestle is being built, repaired or improved; (c)
26 extracting for hire ((or processing for hire)), except persons
27 taxable as extractors for hire ((or processors for hire)) under
28 another section of this chapter; (d) operating a cold storage
29 warehouse or storage warehouse, but not including the rental of cold
30 storage lockers; (e) representing and performing services for fire or
31 casualty insurance companies as an independent resident managing
32 general agent licensed under the provisions of chapter 48.17 RCW; (f)
33 radio and television broadcasting, but excluding revenues from
34 network, national, and regional advertising computed either: (i) As a
35 standard deduction that the department must publish by rule by
36 September 30, 2020, and by September 30th of every fifth year
37 thereafter, based on the national average thereof as reported by the
38 United States census bureau's economic census; or (ii) in lieu
39 thereof by itemization by the individual broadcasting station, and
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1 excluding that portion of revenue represented by the out-of-state
2 audience computed as a ratio to the broadcasting station's total
3 audience as measured by the .5 millivolt/meter signal strength
4 contour for AM radio, the one millivolt/meter or ((sixty)) 60 dBu
5 signal strength contour for FM radio, the ((twenty-eight)) 28 dBu
6 signal strength contour for television channels two through six, the
7 ((thirty-six)) 36 dBu signal strength contour for television channels
8 seven through ((thirteen)) 13, and the ((forty-one)) 41 dBu signal
9 strength contour for television channels ((fourteen)) 14 through
10 ((sixty-nine)) 69 with delivery by wire, satellite, or any other
11 means, if any; (g) engaging in activities which bring a person within
12 the definition of consumer contained in RCW 82.04.190(6); as to such
13 persons, the amount of tax on such business is equal to the gross
14 income of the business multiplied by the rate of 0.484 percent.
15 (2) For the purposes of this section, the following definitions
16 apply unless the context clearly requires otherwise.
17 (a) "Cold storage warehouse" means a storage warehouse used to
18 store fresh and/or frozen perishable fruits or vegetables, meat,
19 seafood, dairy products, or fowl, or any combination thereof, at a
20 desired temperature to maintain the quality of the product for
21 orderly marketing.
22 (b) "Storage warehouse" means a building or structure, or any
23 part thereof, in which goods, wares, or merchandise are received for
24 storage for compensation, except field warehouses, fruit warehouses,
25 fruit packing plants, warehouses licensed under chapter 22.09 RCW,
26 public garages storing automobiles, railroad freight sheds, docks and
27 wharves, and "self-storage" or "mini storage" facilities whereby
28 customers have direct access to individual storage areas by separate
29 entrance. "Storage warehouse" does not include a building or
30 structure, or that part of such building or structure, in which an
31 activity taxable under RCW 82.04.272 is conducted.
32 (c) "Periodical or magazine" means a printed publication, other
33 than a newspaper, issued regularly at stated intervals at least once
34 every three months, including any supplement or special edition of
35 the publication.
36 Sec. 8. RCW 82.32.790 and 2019 c 449 s 2 are each amended to
37 read as follows:
38 (1)(a) Section ((2)) 1, chapter 449, Laws of 2019, sections 510,
39 512, 514, 516, ((518,)) 520, 522, and 524, chapter 37, Laws of 2017
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1 3rd sp. sess., sections ((9,)) 13, 17, 22, 24, 30, 32, and 45,
2 chapter 135, Laws of 2017, sections ((104,)) 110, 117, 123, 125, 129,
3 131, and 150, chapter 114, Laws of 2010, and sections 1, 2, ((3,))
4 and 5 through 10, chapter 149, Laws of 2003 are contingent upon the
5 siting and commercial operation of a significant semiconductor
6 microchip fabrication facility in the state of Washington by January
7 1, 2024.
8 (b) For the purposes of this section:
9 (i) "Commercial operation" means the same as "commencement of
10 commercial production" as used in RCW 82.08.965.
11 (ii) "Semiconductor microchip fabrication" means "manufacturing
12 semiconductor microchips" as defined in RCW 82.04.426.
13 (iii) "Significant" means the combined investment of new
14 buildings and new machinery and equipment in the buildings, at the
15 commencement of commercial production, will be at least ((one billion
16 dollars)) $1,000,000,000.
17 (2) The sections referenced in subsection (1) of this section
18 take effect the first day of the month in which a contract for the
19 construction of a significant semiconductor fabrication facility is
20 signed, if the contract is signed and received by January 1, 2024, as
21 determined by the director of the department of revenue.
22 (3)(a) The department of revenue must provide notice of the
23 effective date of the sections referenced in subsection (1) of this
24 section to affected taxpayers, the legislature, and others as deemed
25 appropriate by the department.
26 (b) If, after making a determination that a contract has been
27 signed and the sections referenced in subsection (1) of this section
28 are effective, the department discovers that commencement of
29 commercial production did not take place within three years of the
30 date the contract was signed, the department must make a
31 determination that chapter 149, Laws of 2003 is no longer effective,
32 and all taxes that would have been otherwise due are deemed deferred
33 taxes and are immediately assessed and payable from any person
34 reporting tax under RCW 82.04.240(2) or claiming an exemption or
35 credit under RCW 82.04.426, 82.04.448, 82.08.965, 82.12.965,
36 82.08.970, 82.12.970, or 84.36.645. The department is not authorized
37 to make a second determination regarding the effective date of the
38 sections referenced in subsection (1) of this section.
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1 (4)(a) This section expires January 1, 2024, if the contingency
2 in subsection (2) of this section does not occur by January 1, 2024,
3 as determined by the department.
4 (b) The department must provide written notice of the expiration
5 date of this section and the sections referenced in subsection (1) of
6 this section to affected taxpayers, the legislature, and others as
7 deemed appropriate by the department.
8 NEW SECTION. Sec. 9. 2017 3rd sp.s. c 37 s 518, 2017 c 135 s 9,
9 2010 c 114 s 104, & 2003 c 149 s 3 are each repealed.
10 NEW SECTION. Sec. 10. This act takes effect October 1, 2021.
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