Senate Bill 5799 - Workforce Education Investment Surcharge and Provider Clinics

Summary

Senate Bill 5799, State of Washington 67th Legislature, 2022 Regular Session, by Senators Robinson and Lovick, read first time January 11, 2022 and referred to the Committee on Business, Financial Services & Trade. The act relates to modifying the application of the workforce education investment surcharge to provider clinics and affiliated organizations, and amends RCW 82.04.299. The text of Section 1 includes a surcharge on select advanced computing businesses at the rate of 1.22 percent of gross income subject to the tax under RCW 82.04.290(2), and later exemptions under subsection (2) that include a provider clinic offering primary care, multispecialty and surgical services. Section 3 provides an effective date of July 1, 2022.

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Full text

     S-3307.2

                               SENATE BILL 5799


     State of Washington       67th Legislature           2022 Regular Session

     By Senators Robinson and Lovick

     Read first time 01/11/22.         Referred   to   Committee   on   Business,
     Financial Services & Trade.




 1       AN ACT Relating to modifying the application of the workforce
 2   education investment surcharge to provider clinics and affiliated
 3   organizations; amending RCW 82.04.299; creating a new section; and
 4   providing an effective date.


 5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 6       Sec. 1. RCW 82.04.299 and 2020 c 2 s 4 are each amended to read
 7   as follows:
 8       (1)(a) Beginning with business activities occurring on or after
 9   April 1, 2020, in addition to the taxes imposed under RCW
10   82.04.290(2), a workforce education investment surcharge is imposed
11   on select advanced computing businesses. The surcharge is equal to
12   the gross income of the business subject to the tax under RCW
13   82.04.290(2), multiplied by the rate of 1.22 percent.
14       (b) Except as provided in (e) of this subsection (1), in no case
15   will the combined surcharge imposed under this subsection (1) paid by
16   all members of an affiliated group be more than nine million dollars
17   annually.
18       (c) For persons subject to the surcharge imposed under this
19   subsection (1) that report under one or more tax classifications, the
20   surcharge applies only to business activities taxed under RCW
21   82.04.290(2).
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 1       (d) The surcharge imposed under this subsection (1) must be
 2   reported and paid on a quarterly basis in a manner as required by the
 3   department. Returns and amounts payable under this subsection (1) are
 4   due by the last day of the month immediately following the end of the
 5   reporting period covered by the return. All other taxes must be
 6   reported and paid as required under RCW 82.32.045.
 7       (e)(i) To aid in the effective administration of the surcharge in
 8   this subsection (1), the department may require persons believed to
 9   be engaging in advanced computing or affiliated with a person
10   believed to be engaging in advanced computing to disclose whether
11   they are a member of an affiliated group and, if so, to identify all
12   other members of the affiliated group subject to the surcharge.
13       (ii) If the department establishes, by clear, cogent, and
14   convincing evidence, that one or more members of an affiliated group,
15   with intent to evade the surcharge under this subsection (1), failed
16   to fully comply with this subsection (1)(e), the department must
17   assess against that person, or those persons collectively, a penalty
18   equal to fifty percent of the amount of the total surcharge payable
19   by all members of that affiliated group for the calendar year during
20   which the person or persons failed to fully comply with this
21   subsection (1)(e). The penalty under this subsection (1)(e) is in
22   lieu of and not in addition to the evasion penalty under RCW
23   82.32.090(7).
24       (f) For the purposes of this subsection (1) the following
25   definitions apply:
26       (i) "Advanced computing" means designing or developing computer
27   software or computer hardware, whether directly or contracting with
28   another person, including modifications to computer software or
29   computer hardware, cloud computing services, or operating an online
30   marketplace, an online search engine, or online social networking
31   platform;
32       (ii) "Affiliate" and "affiliated" means a person that directly or
33   indirectly, through one or more intermediaries, controls, is
34   controlled by, or is under common control with another person;
35       (iii) "Affiliated group" means a group of two or more persons
36   that are affiliated with each other;
37       (iv) "Cloud computing services" means on-demand delivery of
38   computing   resources,    such   as   networks,    servers,   storage,
39   applications, and services, over the internet;


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 1       (v) "Control" means the possession, directly or indirectly, of
 2   more than fifty percent of the power to direct or cause the direction
 3   of the management and policies of a person, whether through the
 4   ownership of voting shares, by contract, or otherwise; and
 5       (vi) "Select advanced computing business" means a person who is a
 6   member of an affiliated group with at least one member of the
 7   affiliated group engaging in the business of advanced computing, and
 8   the affiliated group has worldwide gross revenue of more than twenty-
 9   five billion dollars during the immediately preceding calendar year.
10   A person who is primarily engaged within this state in the provision
11   of commercial mobile service, as that term is defined in 47 U.S.C.
12   Sec. 332(d)(1), shall not be considered a select advanced computing
13   business. A person who is primarily engaged in this state in the
14   operation and provision of access to transmission facilities and
15   infrastructure that the person owns or leases for the transmission of
16   voice, data, text, sound, and video using wired telecommunications
17   networks shall not be considered a select advanced computing
18   business. A person that is primarily engaged in business as a
19   "financial institution" as defined in RCW 82.04.29004, as that
20   section existed on January 1, 2020, shall not be considered a select
21   advanced computing business. For purposes of this subsection
22   (1)(f)(vi), "primarily" is determined based on gross income of the
23   business.
24       (2)(a) The workforce education investment surcharge under this
25   section does not apply to ((any)):
26       (i) Any hospital as defined in RCW 70.41.020, including any
27   hospital that comes within the scope of chapter 71.12 RCW if the
28   hospital is also licensed under chapter 70.41 RCW; or
29       (ii) A provider clinic offering primary care, multispecialty and
30   surgical services, including behavioral health services, and any
31   affiliate of the provider clinic if the affiliate is an organization
32   that offers health care services or provides administrative support
33   for a provider clinic, or is an independent practice association or
34   accountable care organization.
35       (b) The exemptions under this subsection (2) do not apply to
36   amounts received by any member of an affiliated group other than the
37   businesses described in (a) of this subsection.
38       (c) For purposes of the exemption in (a)(ii) of this subsection:



                                     p. 3                          SB 5799
 1       (i) "Health care services" means services offered by health care
 2   providers relating to the prevention, cure, or treatment of illness,
 3   injury, or disease.
 4       (ii) "Primary care" means wellness and prevention services and
 5   the diagnosis and treatment of health conditions.
 6       (3) Revenues from the surcharge under this section must be
 7   deposited directly into the workforce education investment account
 8   established in RCW 43.79.195.
 9       (4) The department has the authority to determine through an
10   audit or other investigation whether a person is subject to the
11   surcharge imposed in this section.

12       NEW SECTION.   Sec. 2.    RCW 82.32.805 and 82.32.808 do apply to
13   this act.


14      NEW SECTION.    Sec. 3.   This act takes effect July 1, 2022.

                                    --- END ---




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