A bill intended to clarify the definition of concrete pumping services for tax-assessment purposes will be reintroduced in the next session of the Washington state Legislature, says Sen. Jeff Holy, of Cheney.
The measure, Senate Bill 6317, and a companion House bill died in committee last session, although Holy says there was no apparent opposition to the proposal to define concrete pumping as a service rather than sale of a product.
Holy says the bills were a response to a rule change made last year by the state Department of Revenue.
“Without soliciting any involvement from stakeholders or contacting the Legislature, DOR decided to interpret that (rule) differently and start taxing concrete pumpers as an end product rather than an in-line service during the course of construction,” Holy says.
The change means concrete will be taxed multiple times, which can add significantly to project costs, he contends.
“These are things that affect the end-product price for the consumer,” he asserts. “It’s to everybody’s disadvantage.”
As an example, Holy and bill co-sponsors contend that, had the policy been in place when the $181 million Amazon Fulfillment Center was built on the West Plains, an additional $50,000 in taxes would have been applied for the concrete pumping services.
In November, Holy, Sen. Mike Padden, of Spokane Valley, and Sen. Shelly Short, of Addy, Washington, who co-sponsored the original bill, wrote a letter to DOR director Vikki Smith protesting the change. Later that week, Smith announced a delay in implementation of the rule.
“We want to be transparent on our reading of the law and delaying the interim guidance’s effective date accomplishes this objective while affording the Legislature time to make changes and for stakeholders to provide additional feedback,” Smith said in the letter.
The DOR delayed implementation until earlier this month, while the Legislature considered SB 6317 and HB2894.
While neither bill made it through the legislative process, Holy says he’s encouraged by the fact that the Senate bill was fast-tracked to the Ways and Means Committee and received a hearing there, while the House bill was voted through unanimously by the House Committee on Finance before it died in the House Rules Committee.
“I remain optimistic and upbeat on this and hope that they wanted to fast-track it because it appeared to be an administrative matter,” Holy says. “I call it more of an administrative matter because this doesn’t appear to have any adversarial base whatsoever.”
Holy says he plans to reintroduce the bill at the next legislative session, which begins Jan. 11, 2021.
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