Washington Business Fall 2017 | Legislative Review & Vote Record | Page 46

2017 legislative review
of $2.70 per $1,000 of assessed value. The
$2.70 rate will stay in place for four years,
after which, the state property tax will
revert to the current one percent revenue
lid. Seniors who qualify for the senior
citizen’s exemption program are exempt
from the increase in the state property tax.
SSB 5977
various revenue changes
Eric Lohnes of AWB, Michael Bernard of Microsoft, Michelle DeLappe of Garvey Schubert Barber,
Norm Bruns of Garvey Schubert Barber, and William Severson of Severson Law testify before the
Senate Law and Justice Committee.
SSB 5883 EHB 2163
Passed/AWB Supported Passed/AWB Opposed
the state’s two-year
operating budget
Lawmakers reached agreement on the final
operating budget late in the third special
legislative session after months of impasse.
The 2017-19 proposed compromise budget
provides $43.7 billion Near General Fund
and $87.3 billion in all funds. For NGF-P,
(Near General Fund Plus Opportunity
Pathways), this represents a net $5.2 billion
increase from 2015-17 spending levels.
SSB 5883 leaves an unrestricted ending
balance of close to $1 billion at the end of
the 2017-19 biennium and meets the four-
year balanced budget requirement. The
operating expenses of state government and
its agencies and programs are funded on a
biennial basis by an Omnibus Operating
Budget adopted by the Legislature in odd-
numbered years. State operating expenses
are paid from the state general fund and
from various dedicated funds and accounts.
The final compromise budget came a long
way from the Senate’s original budget (SB
5048) which relied more heavily on the
levy swap, and the House’s original budget
which relied on an assortment of new and
increased taxes.
44 association of washington business
remote sales, exemption
repeal, and mitigation
This bill was part of the final budget
agreement and contains several provisions
intended to increase revenues. Engrossed
House Bill 2163 has four revenue-raising
measures:
• Internet marketplace facilitators and
remote sellers are required to collect and
remit sales taxes on their remote sales
from out of state or comply with use
tax notice and reporting requirements
to their buyers and the Department of
Revenue.
• Sales tax is applied to sales of bottled
water.
• A use tax will apply to fuels manufactured
for own use.
• A business and occupation tax economic
nexus standard is applied to out-of-state
retailers without physical presence in
Washington.
HB 2242
basic education funding
Passed/AWB Supported
House Bill 2242 was part of the final budget
compromise and is the primary source of
funding for the education plan by increasing
the state property tax 81 cents to a flat rate
Passed/AWB Supported
Substitute Senate Bill 5977 was part of
the final budget compromise and creates,
modifies, or extends 13 tax preferences
including a number of policies AWB
actively pursued during the course of the
session including lowering the business
and occupation tax rate on manufacturers
from 0.484 percent to 0.2904 percent, (later
vetoed by the governor with the support of
23 legislators who signed a letter requesting
it), reclassifying the tax classification of
martial arts, and extending the motion
picture competitiveness program for 10
years. This bill contains:
• Modifying the Washington Main Street
Program
• Lowering the manufacturing B&O tax rate
(Vetoed)
• B&O tax exemption for agricultural
fertilizer and seed
• S o l a r s i l i c o n m a n u f a c t u r i n g a n d
wholesaling extension
• Semiconductor materials manufacturing
• Exemptions for the conversion of coal-
fired electric plants (Vetoed)
• Tax relief for silicon smelters
• Invest in Washington Program
• Extending the sales and use tax deferral
for historical auto museums
• Concerning removal of land from current
use due to natural disaster
• Modifying Washington’s motion picture
and film industries tax credit
• Concerning the excise taxation of mar-
tial arts
• Leasehold excise credits and exemptions
for colleges and universities.