PUBLIC UTILITY TAX EXEMPTIONS

82.16.040 MONTHLY INCOME LESS THAN $2,000

Description: This statute exempts businesses subject to public utility tax whose gross revenue is less than $2,000 per month. (No exemption is allowed if income equals or exceeds $2,000.)

Purpose: To aid new and/or small public utility businesses.

Category/Year Enacted: Economic development; 1935; the threshold amount was increased from $500 to $2,000 effective July 1, 1996.

Primary Beneficiaries: Taxi services, local trucking services, delivery services, small water districts.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 443 462 482 503
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes.

82.16.042 SMALL WATER SYSTEMS

Description: This statute exempts from public utility tax amounts received for the provision of water services by: (1) water-sewer districts established under Title 57 RCW which have fewer than 1,500 connections; (2) irrigation districts established under Title 87 RCW which have fewer than 1,500 connections; and (3) qualified satellite systems pursuant to RCW 70.116.134 which have fewer than 200 connections. To qualify, the rates charged by these systems must exceed 125 percent of the statewide average rate for water, as determined by the Department of Health. The district must spend at least 90 percent of the value of the exemption on repair, maintenance and upgrading of the water system.

Purpose: The purpose is to assist small water providers whose systems are not economically efficient to operate.

Category/Year Enacted: Government; 1997.

Primary Beneficiaries: Small water, sewer and irrigation systems.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 474 488 503 518
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes.

82.16.046 2ND NARROWS BRIDGE

Description: Income derived from operation of state route 16 corridor transportation systems and facilities constructed and operated under RCW 47.46 is exempt from public utility tax. This statute addresses the second Narrows bridge and exempts from tax tolls received by the operator of the bridge.

Purpose: To lower the overall cost of operation of the bridge.

Category/Year Enacted: Not intended in the tax base; 1998.

Primary Beneficiaries: The operator of the bridge and ultimately drivers who utilize this facility.

Conflict With Other Programs: None evident.

Tax Savings ($000): None; it is presumed that income from operation of the bridge (e.g., tolls) would otherwise be subject to B&O tax, not public utility tax. In any case, the bridge will not be operational until after the end of fiscal year 2003, the period covered by this study.

82.16.047 RIDE-SHARING AND TRANSPORTATION OF PERSONS WITH SPECIAL NEEDS

Description: Provides an exemption from public utility tax for funds received in conjunction with commuter ride-sharing (e.g., van pools) and receipts by nonprofit social service organizations that provide transportation services for persons with special transportation needs.

Purpose: The purpose is to promote ride-sharing and encourage conservation of motor vehicle fuel, as well as support the transportation programs of nonprofit organizations.

Category/Year Enacted: Nonprofit - health or social welfare; 1979.

Primary Beneficiaries: Approximately 50 public and nonprofit transportation service providers which operate over 3,100 registered ride-sharing vehicles.

Conflict With Other Programs: None evident.

Tax Savings ($000)*: FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 1,996 2,175 2,327 2,444
Local taxes - - - - - - - -

*Impact is based on charges by van pools. Services by nonprofit groups are generally provided free of charge; however, the estimate includes voluntary contributions by riders.

If the exemption were repealed, would the estimated revenue be realized? Yes.