B&O TAX EXEMPTIONS: NONPROFIT ORGANIZATIONS

82.04.324 BLOOD BANKS

Description: Nonprofit blood, bone or tissue banks are exempt from B&O tax on income that is not subject to federal income tax.

Purpose: To support the activities of nonprofit blood banks and achieve parity with other nonprofit organizations that provide similar services.

Category/Year Enacted: Nonprofit - health or social welfare; 1995.

Primary Beneficiaries: Three nonprofit blood banks.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 380 393 407 427
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized?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

82.04.327 ADULT FAMILY HOMES

Description: Adult family homes which are licensed by the state (or are exempt from state licensing requirements) are exempt from B&O tax. Such facilities provide a protected family-like environment for adult clients with developmental, physical or other disabilities.

Purpose: To assist the operators of such facilities.

Category/Year Enacted: Nonprofit - health or social welfare; 1987.

Primary Beneficiaries: Approximately 2,076 adult family homes and DSHS which provides funding for their operation.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 162 167 172 176
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes; although DSHS would need more funding to provide the same level of service.

82.04.338 SERVICES FOR HOP COMMISSION/BOARD

Description: Income derived from business activities for a hop commodity commission or hop commodity board is exempt from B&O tax, if the organization performing the service is a nonprofit entity.

Purpose: To support the activities of such organizations and indirectly the commission or board.

Category/Year Enacted: Agriculture; 1998.

Primary Beneficiaries: Nonprofit organizations that perform services for a hop commodity commission or board.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 5 5 6 6
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized?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

82.04.339 CHURCH DAY CARE

Description: Exemption from B&O tax is allowed to day care centers operated in churches, as long as the care is provided for less than 24 consecutive hours.

Purpose: To assist the operators of such facilities.

Category/Year Enacted: Nonprofit - health or social welfare; 1992.

Primary Beneficiaries: Approximately 315 day care centers and their clients.

Conflict With Other Programs: Day care services (for children over the age of eight) by other nonprofit organizations, as well as for-profit firms, are taxable.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 965 1,018 1,074 1,133
Local taxes - - - - - - - -

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

82.04.3395 CHILD CARE RESOURCE & REFERRAL

Description: Nonprofit child care resource and referral services are exempt from B&O tax on income received for their services (primarily contacts with private businesses). Such services link families with licensed child care providers, recruit, train and support child care providers and work with businesses and communities regarding child care issues.

Purpose: To assist the operators of such services and clarify the tax treatment of all organizations involved with child care resource and referral activities.

Category/Year Enacted: Nonprofit - health or social welfare; 1995.

Primary Beneficiaries: There are 17 resource/referral offices in the state, most of which are housed under an umbrella organization, such as a community action program. Only three offices have service contracts that exceed the threshold amount for B&O tax liability.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 2 3 3 4
Local taxes - - - - - - - -

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

82.04.355 COMMUTER RIDE-SHARING; ELDERLY

Description: Provides an exemption from business and occupation tax on non-fee funds received by nonprofit social service organizations, van pools and car pools providing transportation services for persons with special transportation needs, as well as commuters. (Income for providing transportation would be subject to public utility tax, not B&O tax.)

Purpose: To reduce motor vehicle fuel consumption and promote ride-sharing by commuter van pools and nonprofit organizations that provide group transportation of persons with special transportation needs.

Category/Year Enacted: Other; 1979.

Primary Beneficiaries: Private businesses that provide commuter van pools for employees and nonprofit organizations that receive non-fee income related to providing transportation services for elderly or handicapped individuals. In 1998, about 860 vehicles were registered in this category.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 189 198 209 219
Local taxes - - - - - - - -

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

82.04.363 NONPROFIT CAMPS AND CONFERENCE CENTERS

Description: Nonprofit organizations are exempt from B&O tax on the sale or furnishing of certain items at a camp or conference center conducted on property that is exempt from property tax. Exempt items include food and meals, camping and lodging facilities, charges for the use of meeting rooms, parking, books, tapes and other products available to participants of the camp or conference but not to the general public.

Purpose: To support the activities of nonprofit organizations.

Category/Year Enacted: Nonprofit - charitable or religious; 1997.

Primary Beneficiaries: Nonprofit camps and conference centers.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 58 61 64 68
Local taxes - - - - - - - -

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

82.04.3651 NONPROFIT ORGANIZATION FUND-RAISING

Description: Nonprofit organizations that conduct fund-raising activities are exempt from B&O tax on such receipts. Fund-raising is defined as the direct solicitation of funds to further the goals of the organization. This does not include regular operation of a bookstore, thrift shop or restaurant.

Purpose: To support the activities of these nonprofit organizations.

Category/Year Enacted: Nonprofit - other; 1998.

Primary Beneficiaries: Nonprofit organizations which raise funds to support their activities.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 24 25 26 27
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes; however, many organizations would likely be below the $35 monthly B&O tax credit.

82.04.367 STUDENT LOAN ORGANIZATIONS

Description: The gross income of nonprofit organizations that issue debt for student loans or that are guarantee agencies under the federal guaranteed student loan program is exempt from B&O tax.

Purpose: To recognize the public function these organizations serve and promote the availability of student loans.

Category/Year Enacted: Nonprofit - other; 1987, expanded in 1998 to include organizations that provide guarantees for student loans made through programs other than the federal Guaranteed Student Loan Program.

Primary Beneficiaries: Nonprofit student loan organizations and the college students whose loans are provided by these agencies.

Conflict With Other Programs: None evident.

Tax Savings ($000): Due to confidentiality requirements, the impact of this exemption cannot be publicly stated because it is believed to affect fewer than three taxpayers.

82.04.368 CREDIT/DEBT COUNSELING SERVICES

Description: Exempts from B&O tax the revenue of nonprofit firms that provide credit or debt counseling services for consumers.

Purpose: The purpose is apparently to reduce the cost of providing such services and to encourage consumers to seek help when in financial distress.

Category/Year Enacted: Nonprofit - other; 1993.

Primary Beneficiaries: There are several dozen firms that provide this service but few are nonprofit.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 25 26 28 30
Local taxes - - - - - - - -

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

82.04.370 FRATERNAL BENEFIT INSURANCE

Description: Income derived from insurance premiums by fraternal benefit societies and fraternal fire insurance associations is exempt from B&O tax. Fraternal societies pay death and disability benefits and sometimes insure property for their members. Such premiums are also exempt from the insurance premiums tax.

Purpose: The purpose is to support the programs and activities of these organizations.

Category/Year Enacted: Other; 1935.

Primary Beneficiaries: Members of fraternal benefit societies.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 1,602 1,642 1,683 1,725
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Unlikely, unless the insurance premiums tax exemption were also repealed; this activity would likely be considered taxable under the insurance premiums tax.

82.04.380 RED CROSS

Description: Income of corporations created by Congress whose principal purpose is volunteer aid to the armed forces and national and international relief is exempt from B&O tax.

Purpose: To support the social services which this organization provides.

Category/Year Enacted: Nonprofit - health or social welfare; 1935.

Primary Beneficiaries: The American Red Cross.

Conflict With Other Programs: None evident.

Tax Savings ($000): Due to confidentiality requirements, the impact of this exemption cannot be publicly stated because it affects fewer than three taxpayers.

82.04.385 SHELTERED WORKSHOPS

Description: Nonprofit organizations that operate sheltered workshops and nonprofit group training homes for the developmentally disabled are exempt from B&O tax on income received from the state (DSHS).

Purpose: To support the social services these organizations provide.

Category/Year Enacted: Nonprofit - other; 1970.

Primary Beneficiaries: Approximately 100 sheltered workshops.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 826 851 876 903
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes; however, increased state funding would be necessary to maintain the same level of service.

82.04.399 ACADEMIC TRANSCRIPTS

Description: Academic institutions are exempt from B&O tax on income received from providing academic transcripts on behalf of their present and former students.

Purpose: To support public and nonprofit educational institutions and to resolve prior confusion over taxability of these transactions.

Category/Year Enacted: Nonprofit, other; 1996.

Primary Beneficiaries: Public and private educational institutions.

Conflict With Other Programs: None evident.

Tax Savings ($000): FY 2000 FY 2001 FY 2002 FY 2003
   
State taxes 3 3 3 3
Local taxes - - - - - - - -

If the exemption were repealed, would the estimated revenue be realized? Yes, although enforcement could be problematic, since little revenue was previously collected prior to enactment of the exemption.