Department of Revenue Fiscal Note — 5541 SB: Newspapers/B&O tax
Summary
Department of Revenue fiscal note for the bill titled Newspapers/B&O tax. Under current law, persons printing or publishing newspapers have a preferential business and occupation (B&O) tax rate of 0.35%, which expires July 1, 2024, after which a rate of 0.484% applies. The proposal eliminates the preferential rate and makes revenues from printing and /or publishing newspapers exempt from B&O tax, with an annual tax performance report not required and no expiration. The effective date is July 1, 2022. The note states that the legislation will affect 100 taxpayers and that the Department will incur total costs of $8,800 in Fiscal Year 2022.
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“Department of Revenue Fiscal Note — 5541 SB: Newspapers/B&O tax.”
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Department of Revenue Fiscal Note
Bill Number: 5541 SB Title: Newspapers/B&O tax Agency: 140-Department of
Revenue
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
Account FY 2022 FY 2023 2021-23 2023-25 2025-27
GF-STATE-State (1,000,000) (1,000,000) (2,500,000) (2,700,000)
01 - Taxes 05 - Bus and Occup Tax
Total $ (1,000,000) (1,000,000) (2,500,000) (2,700,000)
Estimated Expenditures from:
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 0.3 0.1
Account
GF-STATE-State 001-1 8,800 40,200 49,000
Total $ 8,800 40,200 49,000
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact . Factors impacting the precision of these estimates ,
and alternate ranges (if appropriate ), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50 ,000 per fiscal year in the current biennium or in subsequent biennia , complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia , complete this page only (Part I).
X Capital budget impact, complete Part IV.
X Requires new rule making, complete Part V.
Legislative Contact: Clinton McCarthy Phone: 360-786-7319 Date: 01/10/2022
Agency Preparation: Melissa Howes Phone: 360-534-1518 Date: 01/16/2022
Agency Approval: Don Gutmann Phone: 360-534-1510 Date: 01/16/2022
OFM Review: Cheri Keller Phone: (360) 584-2207 Date: 01/16/2022
Request # 5541-1-1
Form FN (Rev 1/00) 171,982.00 1 Bill # 5541 SB
FNS062 Department of Revenue Fiscal Note
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe, by section number, the significant provisions of the bill , and any related workload or policy assumptions , that have revenue or
expenditure impact on the responding agency .
CURRENT LAW:
Persons engaging in the business of printing newspapers, publishing newspapers, or both, are provided a preferential business
and occupation (B&O) tax rate of 0.35%. This preferential rate expires July 1, 2024, after which a tax rate of 0.484% applies.
"Newspaper" means:
- A publication issued regularly at stated intervals at least twice a month and printed on newsprint in tabloid or broadsheet format
folded loosely together without stapling, glue, or any other binding of any kind, including any supplement of a printed newspaper;
and
- An electronic version of a printed newspaper that :
- Shares content with the printed newspaper; and
- Is prominently identified by the same name as the printed newspaper or otherwise conspicuously indicates that it is a
complement to the printed newspaper.
PROPOSAL:
The preferential tax rate of 0.35% is eliminated and revenues from printing and /or publishing newspapers becomes exempt from
B&O tax.
An annual tax performance report is not required and there is no expiration for this new exemption.
EFFECTIVE DATE:
July 1, 2022
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency , identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources . Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived . Explain how workload assumptions translate into estimates . Distinguish between one time and ongoing functions .
ASSUMPTIONS:
- The tax revenues received from newspaper printers and publishers mirrors the average annual growth for newspaper
production as reflected in the November 2021 IHS Markit forecast.
- This legislation takes effect July 1, 2022, and impacts 11 months of collections in Fiscal Year 2023.
DATA SOURCES:
- Department of Revenue excise tax return data
- IHS Markit industrial production index for newspaper publishers November 2021 forecast
REVENUE ESTIMATES:
This bill decreases state revenues by an estimated $1 million in the 11 months of impacted collections in Fiscal Year 2023,
and by $1.1 million in Fiscal Year 2024, the first full year of impacted collections.
TOTAL REVENUE IMPACT:
State Government (cash basis, $000):
FY 2022 - ($ 0)
FY 2023 - ($ 1,000 )
Request # 5541-1-1
Form FN (Rev 1/00) 171,982.00 2 Bill # 5541 SB
FNS062 Department of Revenue Fiscal Note
FY 2024 - ($ 1,100 )
FY 2025 - ($ 1,400 )
FY 2026 - ($ 1,400 )
FY 2027 - ($ 1,300 )
There is no Local Government impact.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation ), identifying by section
number the provisions of the legislation that result in the expenditures (or savings ). Briefly describe the factual basis of the assumptions and the method
by which the expenditure impact is derived . Explain how workload assumptions translate into cost estimates . Distinguish between one time and ongoing
ASSUMPTIONS:
This legislation will affect 100 taxpayers.
FIRST YEAR COSTS:
The Department will incur total costs of $8,800 in Fiscal Year 2022. These costs include :
Object Costs - $8,800
- Contract computer system programming to expire a line code and add a new deduction code.
SECOND YEAR COSTS:
The Department will incur total costs of $40,200 in Fiscal Year 2023. These costs include :
Labor Costs - Time and effort equates to 0.27 FTE.
- Create a special notice and identify publications and information that needs to be created or updated on the
Department’s website.
- Respond to tax ruling requests, email inquiries, and phone calls.
- Amend excise tax advisory.
- Amend two administrative rules.
Object Costs - $8,800.
- Contract computer system programming to make changes to the annual tax performance report.
ONGOING COSTS:
There are no ongoing costs.
Part III: Expenditure Detail
III. A - Expenditures by Object Or Purpose
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 0.3 0.1
A-Salaries and Wages 19,400 19,400
B-Employee Benefits 7,000 7,000
C-Professional Service Contracts 8,800 8,800 17,600
E-Goods and Other Services 3,200 3,200
J-Capital Outlays 1,800 1,800
Total $ $8,800 $40,200 $49,000
Request # 5541-1-1
Form FN (Rev 1/00) 171,982.00 3 Bill # 5541 SB
FNS062 Department of Revenue Fiscal Note
III. B - Detail: List FTEs by classification and corresponding annual compensation . Totals need to agree with total FTEs in Part I
and Part IIIA
Job Classification Salary FY 2022 FY 2023 2021-23 2023-25 2025-27
EMS BAND 4 122,633 0.0 0.0
EMS BAND 5 143,263 0.0 0.0
MGMT ANALYST4 70,956 0.0 0.0
TAX INFO SPEC 4 64,332 0.1 0.1
TAX POLICY SP 2 72,756 0.0 0.0
TAX POLICY SP 3 82,344 0.1 0.1
TAX POLICY SP 4 88,644 0.0 0.0
WMS BAND 3 104,295 0.0 0.0
Total FTEs 0.3 0.2
III. C - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and dexcribe potential financing methods
NONE
None.
Part V: New Rule Making Required
Identify provisions of the measure that require the agency to adopt new administrative rules or repeal/revise existing rules .
Should this legislation become law, the Department will use the standard process to amend WAC 458-20-143, titled: "Printers
and publishers of newspapers, magazines, and periodicals" and the expedited process to amend WAC 458-20-144 titled:
"Printing Industry." Persons affected by this rulemaking would include printers and publishers of newspapers.
Request # 5541-1-1
Form FN (Rev 1/00) 171,982.00 4 Bill # 5541 SB
FNS062 Department of Revenue Fiscal Note
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