Senate Bill 5541 - Exempting Newspapers From Business and Occupation Tax (2022 Regular Session)

Summary

Senate Bill 5541, State of Washington, 67th Legislature, 2022 Regular Session, by Senators Mullet, Gildon, Keiser, Liias, and Lovick, relating to exempting newspapers from business and occupation tax. It was prefiled 12/13/21, read first time 01/10/22 and referred to the Committee on Business, Financial Services & Trade. Section 1 adds a new section to chapter 82.04 RCW stating that the chapter does not apply to any person engaging within this state in the business of printing a newspaper, publishing a newspaper, or both. Section 2 amends RCW 82.04.260, and its text includes a subsection (14) on printing or publishing a newspaper with rates of 0.35 percent and 0.484 percent. Section 4 provides that the act takes effect July 1, 2022.

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Full text

     S-3190.3

                               SENATE BILL 5541


     State of Washington       67th Legislature       2022 Regular Session

     By Senators Mullet, Gildon, Keiser, Liias, and Lovick

     Prefiled 12/13/21. Read first time 01/10/22.    Referred to Committee
     on Business, Financial Services & Trade.




1        AN ACT Relating to exempting newspapers from business and
2    occupation tax; amending RCW 82.04.260; adding a new section to
3    chapter 82.04 RCW; creating a new section; and providing an effective
4    date.


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


 6       NEW SECTION.   Sec. 1. A new section is added to chapter 82.04
 7   RCW to read as follows:
 8       This chapter does not apply to any person engaging within this
 9   state in the business of printing a newspaper, publishing a
10   newspaper, or both.

11       Sec. 2.   RCW 82.04.260 and 2021 c 145 s 7 are each amended to
12   read as follows:
13       (1) Upon every person engaging within this state in the business
14   of manufacturing:
15       (a) Wheat into flour, barley into pearl barley, soybeans into
16   soybean oil, canola into canola oil, canola meal, or canola by-
17   products, or sunflower seeds into sunflower oil; as to such persons
18   the amount of tax with respect to such business is equal to the value
19   of the flour, pearl barley, oil, canola meal, or canola by-product
20   manufactured, multiplied by the rate of 0.138 percent;
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 1       (b) Beginning July 1, 2025, seafood products that remain in a
 2   raw, raw frozen, or raw salted state at the completion of the
 3   manufacturing by that person; or selling manufactured seafood
 4   products that remain in a raw, raw frozen, or raw salted state at the
 5   completion of the manufacturing, to purchasers who transport in the
 6   ordinary course of business the goods out of this state; as to such
 7   persons the amount of tax with respect to such business is equal to
 8   the value of the products manufactured or the gross proceeds derived
 9   from such sales, multiplied by the rate of 0.138 percent. Sellers
10   must keep and preserve records for the period required by RCW
11   82.32.070 establishing that the goods were transported by the
12   purchaser in the ordinary course of business out of this state;
13       (c)(i) Except as provided otherwise in (c)(iii) of this
14   subsection, from July 1, 2025, until January 1, 2036, dairy products;
15   or selling dairy products that the person has manufactured to
16   purchasers who either transport in the ordinary course of business
17   the goods out of state or purchasers who use such dairy products as
18   an ingredient or component in the manufacturing of a dairy product;
19   as to such persons the tax imposed is equal to the value of the
20   products manufactured or the gross proceeds derived from such sales
21   multiplied by the rate of 0.138 percent. Sellers must keep and
22   preserve   records   for  the  period   required   by  RCW  82.32.070
23   establishing that the goods were transported by the purchaser in the
24   ordinary course of business out of this state or sold to a
25   manufacturer for use as an ingredient or component in the
26   manufacturing of a dairy product.
27       (ii) For the purposes of this subsection (1)(c), "dairy products"
28   means:
29       (A) Products, not including any marijuana-infused product, that
30   as of September 20, 2001, are identified in 21 C.F.R., chapter 1,
31   parts 131, 133, and 135, including by-products from the manufacturing
32   of the dairy products, such as whey and casein; and
33       (B) Products comprised of not less than seventy percent dairy
34   products that qualify under (c)(ii)(A) of this subsection, measured
35   by weight or volume.
36       (iii) The preferential tax rate provided to taxpayers under this
37   subsection (1)(c) does not apply to sales of dairy products on or
38   after July 1, 2023, where a dairy product is used by the purchaser as
39   an ingredient or component in the manufacturing in Washington of a
40   dairy product;
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 1       (d)(i) Beginning July 1, 2025, fruits or vegetables by canning,
 2   preserving, freezing, processing, or dehydrating fresh fruits or
 3   vegetables, or selling at wholesale fruits or vegetables manufactured
 4   by the seller by canning, preserving, freezing, processing, or
 5   dehydrating fresh fruits or vegetables and sold to purchasers who
 6   transport in the ordinary course of business the goods out of this
 7   state; as to such persons the amount of tax with respect to such
 8   business is equal to the value of the products manufactured or the
 9   gross proceeds derived from such sales multiplied by the rate of
10   0.138 percent. Sellers must keep and preserve records for the period
11   required by RCW 82.32.070 establishing that the goods were
12   transported by the purchaser in the ordinary course of business out
13   of this state.
14       (ii) For purposes of this subsection (1)(d), "fruits" and
15   "vegetables" do not include marijuana, useable marijuana, or
16   marijuana-infused products; and
17       (e) Wood biomass fuel; as to such persons the amount of tax with
18   respect to the business is equal to the value of wood biomass fuel
19   manufactured, multiplied by the rate of 0.138 percent. For the
20   purposes of this section, "wood biomass fuel" means a liquid or
21   gaseous fuel that is produced from lignocellulosic feedstocks,
22   including wood, forest, or field residue and dedicated energy crops,
23   and that does not include wood treated with chemical preservations
24   such as creosote, pentachlorophenol, or copper-chrome-arsenic.
25       (2) Upon every person engaging within this state in the business
26   of splitting or processing dried peas; as to such persons the amount
27   of tax with respect to such business is equal to the value of the
28   peas split or processed, multiplied by the rate of 0.138 percent.
29       (3) Upon every nonprofit corporation and nonprofit association
30   engaging within this state in research and development, as to such
31   corporations and associations, the amount of tax with respect to such
32   activities is equal to the gross income derived from such activities
33   multiplied by the rate of 0.484 percent.
34       (4) Upon every person engaging within this state in the business
35   of slaughtering, breaking and/or processing perishable meat products
36   and/or selling the same at wholesale only and not at retail; as to
37   such persons the tax imposed is equal to the gross proceeds derived
38   from such sales multiplied by the rate of 0.138 percent.
39       (5)(a) Upon every person engaging within this state in the
40   business of acting as a travel agent or tour operator and whose
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 1   annual taxable amount for the prior calendar year from such business
 2   was two hundred fifty thousand dollars or less; as to such persons
 3   the amount of the tax with respect to such activities is equal to the
 4   gross income derived from such activities multiplied by the rate of
 5   0.275 percent.
 6       (b) Upon every person engaging within this state in the business
 7   of acting as a travel agent or tour operator and whose annual taxable
 8   amount for the prior calendar year from such business was more than
 9   two hundred fifty thousand dollars; as to such persons the amount of
10   the tax with respect to such activities is equal to the gross income
11   derived from such activities multiplied by the rate of 0.275 percent
12   through June 30, 2019, and 0.9 percent beginning July 1, 2019.
13       (6) Upon every person engaging within this state in business as
14   an international steamship agent, international customs house broker,
15   international freight forwarder, vessel and/or cargo charter broker
16   in foreign commerce, and/or international air cargo agent; as to such
17   persons the amount of the tax with respect to only international
18   activities is equal to the gross income derived from such activities
19   multiplied by the rate of 0.275 percent.
20       (7) Upon every person engaging within this state in the business
21   of stevedoring and associated activities pertinent to the movement of
22   goods and commodities in waterborne interstate or foreign commerce;
23   as to such persons the amount of tax with respect to such business is
24   equal to the gross proceeds derived from such activities multiplied
25   by the rate of 0.275 percent. Persons subject to taxation under this
26   subsection are exempt from payment of taxes imposed by chapter 82.16
27   RCW for that portion of their business subject to taxation under this
28   subsection. Stevedoring and associated activities pertinent to the
29   conduct of goods and commodities in waterborne interstate or foreign
30   commerce are defined as all activities of a labor, service or
31   transportation nature whereby cargo may be loaded or unloaded to or
32   from vessels or barges, passing over, onto or under a wharf, pier, or
33   similar structure; cargo may be moved to a warehouse or similar
34   holding or storage yard or area to await further movement in import
35   or export or may move to a consolidation freight station and be
36   stuffed, unstuffed, containerized, separated or otherwise segregated
37   or aggregated for delivery or loaded on any mode of transportation
38   for delivery to its consignee. Specific activities included in this
39   definition are: Wharfage, handling, loading, unloading, moving of
40   cargo to a convenient place of delivery to the consignee or a
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 1   convenient place for further movement to export mode; documentation
 2   services in connection with the receipt, delivery, checking, care,
 3   custody and control of cargo required in the transfer of cargo;
 4   imported automobile handling prior to delivery to consignee; terminal
 5   stevedoring and incidental vessel services, including but not limited
 6   to plugging and unplugging refrigerator service to containers,
 7   trailers, and other refrigerated cargo receptacles, and securing ship
 8   hatch covers.
 9       (8)(a) Upon every person engaging within this state in the
10   business of disposing of low-level waste, as defined in RCW
11   70A.380.010; as to such persons the amount of the tax with respect to
12   such business is equal to the gross income of the business, excluding
13   any fees imposed under chapter 70A.384 RCW, multiplied by the rate of
14   3.3 percent.
15       (b) If the gross income of the taxpayer is attributable to
16   activities both within and without this state, the gross income
17   attributable to this state must be determined in accordance with the
18   methods of apportionment required under RCW 82.04.460.
19       (9) Upon every person engaging within this state as an insurance
20   producer or title insurance agent licensed under chapter 48.17 RCW or
21   a surplus line broker licensed under chapter 48.15 RCW; as to such
22   persons, the amount of the tax with respect to such licensed
23   activities is equal to the gross income of such business multiplied
24   by the rate of 0.484 percent.
25       (10) Upon every person engaging within this state in business as
26   a hospital, as defined in chapter 70.41 RCW, that is operated as a
27   nonprofit corporation or by the state or any of its political
28   subdivisions, as to such persons, the amount of tax with respect to
29   such activities is equal to the gross income of the business
30   multiplied by the rate of 0.75 percent through June 30, 1995, and 1.5
31   percent thereafter.
32       (11)(a) Beginning October 1, 2005, upon every person engaging
33   within this state in the business of manufacturing commercial
34   airplanes, or components of such airplanes, or making sales, at
35   retail or wholesale, of commercial airplanes or components of such
36   airplanes, manufactured by the seller, as to such persons the amount
37   of tax with respect to such business is, in the case of
38   manufacturers, equal to the value of the product manufactured and the
39   gross proceeds of sales of the product manufactured, or in the case


                                     p. 5                          SB 5541
 1   of processors for hire, equal to the gross income of the business,
 2   multiplied by the rate of:
 3       (i) 0.4235 percent from October 1, 2005, through June 30, 2007;
 4       (ii) 0.2904 percent beginning July 1, 2007, through March 31,
 5   2020; and
 6       (iii) Beginning April 1, 2020, 0.484 percent, subject to any
 7   reduction required under (e) of this subsection (11). The tax rate in
 8   this subsection (11)(a)(iii) applies to all business activities
 9   described in this subsection (11)(a).
10       (b) Beginning July 1, 2008, upon every person who is not eligible
11   to report under the provisions of (a) of this subsection (11) and is
12   engaging within this state in the business of manufacturing tooling
13   specifically designed for use in manufacturing commercial airplanes
14   or components of such airplanes, or making sales, at retail or
15   wholesale, of such tooling manufactured by the seller, as to such
16   persons the amount of tax with respect to such business is, in the
17   case of manufacturers, equal to the value of the product manufactured
18   and the gross proceeds of sales of the product manufactured, or in
19   the case of processors for hire, be equal to the gross income of the
20   business, multiplied by the rate of:
21       (i) 0.2904 percent through March 31, 2020; and
22       (ii) Beginning April 1, 2020, the following rates, which are
23   subject to any reduction required under (e) of this subsection (11):
24       (A) The rate under RCW 82.04.250(1) on the business of making
25   retail   sales  of   tooling   specifically   designed  for   use   in
26   manufacturing commercial airplanes or components of such airplanes;
27   and
28       (B) 0.484 percent on all other business activities described in
29   this subsection (11)(b).
30       (c) For the purposes of this subsection (11), "commercial
31   airplane" and "component" have the same meanings as provided in RCW
32   82.32.550.
33       (d)(i) In addition to all other requirements under this title, a
34   person reporting under the tax rate provided in this subsection (11)
35   must file a complete annual tax performance report with the
36   department under RCW 82.32.534. However, this requirement does not
37   apply to persons reporting under the tax rate in (a)(iii) of this
38   subsection (11), so long as that rate remains 0.484 percent, or under
39   any of the tax rates in (b)(ii)(A) and (B) of this subsection (11),


                                     p. 6                          SB 5541
 1   so long as those tax rates remain the rate imposed pursuant to RCW
 2   82.04.250(1) and 0.484 percent, respectively.
 3       (ii) Nothing in (d)(i) of this subsection (11) may be construed
 4   as affecting the obligation of a person reporting under a tax rate
 5   provided in this subsection (11) to file a complete annual tax
 6   performance report with the department under RCW 82.32.534: (A)
 7   Pursuant to another provision of this title as a result of claiming a
 8   tax credit or exemption; or (B) pursuant to (d)(i) of this subsection
 9   (11) as a result of claiming the tax rates in (a)(ii) or (b)(i) of
10   this subsection (11) for periods ending before April 1, 2020.
11       (e)(i) After March 31, 2021, the tax rates under (a)(iii) and
12   (b)(ii) of this subsection (11) must be reduced to 0.357 percent
13   provided the conditions in RCW 82.04.2602 are met. The effective date
14   of the rates authorized under this subsection (11)(e) must occur on
15   the first day of the next calendar quarter that is at least sixty
16   days after the department receives the last of the two written
17   notices pursuant to RCW 82.04.2602 (3) and (4).
18       (ii)   Both  a   significant   commercial  airplane   manufacturer
19   separately and the rest of the aerospace industry as a whole,
20   receiving the rate of 0.357 percent under this subsection (11)(e) are
21   subject to the aerospace apprenticeship utilization rates required
22   under RCW 49.04.220 by April 1, 2026, or five years after the
23   effective date of the 0.357 percent rate authorized under this
24   subsection (11)(e), whichever is later, as determined by the
25   department of labor and industries.
26       (iii) The provisions of RCW 82.32.805 and 82.32.808 do not apply
27   to this subsection (11)(e).
28       (f)(i) Except as provided in (f)(ii) of this subsection (11),
29   this subsection (11) does not apply on and after July 1, 2040.
30       (ii) With respect to the manufacturing of commercial airplanes or
31   making sales, at retail or wholesale, of commercial airplanes, this
32   subsection (11) does not apply on and after July 1st of the year in
33   which the department makes a determination that any final assembly or
34   wing assembly of any version or variant of a commercial airplane that
35   is the basis of a siting of a significant commercial airplane
36   manufacturing program in the state under RCW 82.32.850 has been sited
37   outside the state of Washington. This subsection (11)(f)(ii) only
38   applies to the manufacturing or sale of commercial airplanes that are
39   the basis of a siting of a significant commercial airplane
40   manufacturing program in the state under RCW 82.32.850. This
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 1   subsection (11)(f)(ii) continues to apply during the time that a
 2   person is subject to the tax rate in (a)(iii) of this subsection
 3   (11).
 4       (g) For the purposes of this subsection, "a significant
 5   commercial airplane manufacturer" means a manufacturer of commercial
 6   airplanes with at least fifty thousand full-time employees in
 7   Washington as of January 1, 2021.
 8       (12)(a) Until July 1, 2045, upon every person engaging within
 9   this state in the business of extracting timber or extracting for
10   hire timber; as to such persons the amount of tax with respect to the
11   business is, in the case of extractors, equal to the value of
12   products, including by-products, extracted, or in the case of
13   extractors for hire, equal to the gross income of the business,
14   multiplied by the rate of 0.4235 percent from July 1, 2006, through
15   June 30, 2007, and 0.2904 percent from July 1, 2007, through June 30,
16   2045.
17       (b) Until July 1, 2045, upon every person engaging within this
18   state in the business of manufacturing or processing for hire: (i)
19   Timber into timber products or wood products; (ii) timber products
20   into other timber products or wood products; or (iii) products
21   defined in RCW 19.27.570(1); as to such persons the amount of the tax
22   with respect to the business is, in the case of manufacturers, equal
23   to the value of products, including by-products, manufactured, or in
24   the case of processors for hire, equal to the gross income of the
25   business, multiplied by the rate of 0.4235 percent from July 1, 2006,
26   through June 30, 2007, and 0.2904 percent from July 1, 2007, through
27   June 30, 2045.
28       (c) Until July 1, 2045, upon every person engaging within this
29   state in the business of selling at wholesale: (i) Timber extracted
30   by that person; (ii) timber products manufactured by that person from
31   timber or other timber products; (iii) wood products manufactured by
32   that person from timber or timber products; or (iv) products defined
33   in RCW 19.27.570(1) manufactured by that person; as to such persons
34   the amount of the tax with respect to the business is equal to the
35   gross proceeds of sales of the timber, timber products, wood
36   products, or products defined in RCW 19.27.570(1) multiplied by the
37   rate of 0.4235 percent from July 1, 2006, through June 30, 2007, and
38   0.2904 percent from July 1, 2007, through June 30, 2045.
39       (d) Until July 1, 2045, upon every person engaging within this
40   state in the business of selling standing timber; as to such persons
                                     p. 8                          SB 5541
 1   the amount of the tax with respect to the business is equal to the
 2   gross income of the business multiplied by the rate of 0.2904
 3   percent. For purposes of this subsection (12)(d), "selling standing
 4   timber" means the sale of timber apart from the land, where the buyer
 5   is required to sever the timber within thirty months from the date of
 6   the original contract, regardless of the method of payment for the
 7   timber and whether title to the timber transfers before, upon, or
 8   after severance.
 9       (e) For purposes of this subsection, the following definitions
10   apply:
11       (i) "Biocomposite surface products" means surface material
12   products containing, by weight or volume, more than fifty percent
13   recycled paper and that also use nonpetroleum-based phenolic resin as
14   a bonding agent.
15       (ii) "Paper and paper products" means products made of interwoven
16   cellulosic fibers held together largely by hydrogen bonding. "Paper
17   and paper products" includes newsprint; office, printing, fine, and
18   pressure-sensitive papers; paper napkins, towels, and toilet tissue;
19   kraft   bag,   construction,    and   other   kraft  industrial   papers;
20   paperboard, liquid packaging containers, containerboard, corrugated,
21   and solid-fiber containers including linerboard and corrugated
22   medium;   and   related   types    of   cellulosic  products   containing
23   primarily, by weight or volume, cellulosic materials. "Paper and
24   paper products" does not include books, newspapers, magazines,
25   periodicals, and other printed publications, advertising materials,
26   calendars, and similar types of printed materials.
27       (iii) "Recycled paper" means paper and paper products having
28   fifty percent or more of their fiber content that comes from
29   postconsumer waste. For purposes of this subsection (12)(e)(iii),
30   "postconsumer waste" means a finished material that would normally be
31   disposed of as solid waste, having completed its life cycle as a
32   consumer item.
33       (iv) "Timber" means forest trees, standing or down, on privately
34   or publicly owned land. "Timber" does not include Christmas trees
35   that are cultivated by agricultural methods or short-rotation
36   hardwoods as defined in RCW 84.33.035.
37       (v) "Timber products" means:
38       (A) Logs, wood chips, sawdust, wood waste, and similar products
39   obtained wholly from the processing of timber, short-rotation
40   hardwoods as defined in RCW 84.33.035, or both;
                                       p. 9                           SB 5541
 1       (B) Pulp, including market pulp and pulp derived from recovered
 2   paper or paper products; and
 3       (C) Recycled paper, but only when used in the manufacture of
 4   biocomposite surface products.
 5       (vi) "Wood products" means paper and paper products; dimensional
 6   lumber; engineered wood products such as particleboard, oriented
 7   strand board, medium density fiberboard, and plywood; wood doors;
 8   wood windows; and biocomposite surface products.
 9       (f) Except for small harvesters as defined in RCW 84.33.035, a
10   person reporting under the tax rate provided in this subsection (12)
11   must file a complete annual tax performance report with the
12   department under RCW 82.32.534.
13       (g) Nothing in this subsection (12) may be construed to affect
14   the taxation of any activity defined as a retail sale in RCW
15   82.04.050(2) (b) or (c), defined as a wholesale sale in RCW
16   82.04.060(2), or taxed under RCW 82.04.280(1)(g).
17       (13) Upon every person engaging within this state in inspecting,
18   testing, labeling, and storing canned salmon owned by another person,
19   as to such persons, the amount of tax with respect to such activities
20   is equal to the gross income derived from such activities multiplied
21   by the rate of 0.484 percent.
22       (((14)(a) Upon every person engaging within this state in the
23   business of printing a newspaper, publishing a newspaper, or both,
24   the amount of tax on such business is equal to the gross income of
25   the business multiplied by the rate of 0.35 percent until July 1,
26   2024, and 0.484 percent thereafter.
27       (b) A person reporting under the tax rate provided in this
28   subsection (14) must file a complete annual tax performance report
29   with the department under RCW 82.32.534.))


30       NEW SECTION.    Sec. 3.    The provisions   of   RCW   82.32.805   and
31   82.32.808 do not apply to this act.


32      NEW SECTION.   Sec. 4.   This act takes effect July 1, 2022.

                                   --- END ---




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