Washington State Tax Structure Study
Provision in Department of Revenue Appropriation
Section 138, ESSB 6153
The appropriations in this section are subject to the following conditions and limitations:
$269,000 of the general fund--state appropriation for fiscal year 2002 and $49,000 of the general fund--state appropriation for fiscal year 2003 are provided solely to establish and provide staff support to a committee on taxation to study the elasticity, equity, and adequacy of the state's tax system.
(1) The committee shall consist of eleven members. The
department shall appoint six academic scholars from the fields of economics, taxation,
business administration, public administration, public policy, and other relevant
disciplines as determined by the department, after consulting with the majority and
minority leaders in the senate, the co-speakers in the house of representatives, the chair
of the ways and means committee in the senate, and the co-chairs of the finance committee
in the house of representatives. The governor and the chairs of the majority and minority
caucuses in each house of the legislature shall each appoint one member to the committee.
These appointments may be legislative members. The members of the committee shall either
elect a voting chair from among their membership or a nonvoting chair who is not a member
of the committee. Members of the committee shall serve without compensation but shall be
reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.
(2) The purpose of the study is to determine how well the
current tax system functions and how it might be
changed to better serve the citizens of the state in the twenty-first century. In
reviewing options for changes to the tax system, the committee shall develop multiple
alternatives to the existing tax system. To the extent possible, the alternatives shall be
designed to increase the harmony between the tax system of this state and the surrounding
states, encourage commerce and business creation, and encourage home ownership. In
developing alternatives, the committee shall examine and consider the effects of tax
incentives, including exemptions, deferrals, and credits. The alternatives shall range
from incremental improvements in the current tax structure to complete replacement of the
tax structure. In conducting the study, the committee shall examine the tax structures of
other states and review previous studies regarding tax reform in this state. In developing
alternatives, the committee shall be guided by administrative simplicity, economic
neutrality, fairness, stability, and transparency. Most of the alternatives presented by
the committee to the legislature shall be revenue neutral and contain no income tax.
(3) The department shall
create an advisory group to include, but not be limited to, representatives of business,
state agencies, local governments, labor, taxpayers, and other advocacy groups. The group
shall provide advice and assistance to the committee.
(4) The committee shall present a final report of its findings and alternatives to the ways and means committee in the senate and the finance committee in the house of representatives by November 30, 2002