SB 5325 — Exempting certain standard financial information purchased by investment management companies from sales and use tax in order to improve industry competitiveness.

S-1049.2SUBSTITUTES-0525.1SENATE SENATE BILL 5325State of Washington66th Legislature2019 Regular SessionBySenateSessionBySenators FinancialLiias, Institutions,Braun, EconomicMullet, DevelopmentPalumbo, &Brown, TradeRivers, (originallyand sponsoredWarnickRead byfirst Senatorstime Liias,01/17/19.Referred Braun,to Mullet,Committee Palumbo,on Brown,Financial Rivers,Institutions, andEconomic Warnick)READDevelopment FIRST& TIMETrade.AN 02/01/19.AN ACT Relating to exempting certain standard financial information purchased by investment management companies from sales and use tax in order to improve industry competitiveness;

c 13 s 702 are each amended to read as follows:(1) The tax imposed by RCW 82.08.020 does not apply to sales of standard financial information to qualifying international investment management companies or personsfor affiliated with a qualifying international investment management company.companies.

Sellers may not be assessed for uncollected sales tax on a sale to a buyer claiming an exemption under this section after having exceeded the fifteen million dollar limitation under this subsection, except as provided in RCW 82.08.050 (4) and (5).(4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.(a)(A)otherwise.(a)(i) Has"Qualifying aninternational ownershipinvestment interestmanagement ofcompany" moremeans thana twentyperson:(A) percent,Who whetheris directprimarily orengaged indirect, in the otherbusiness person;of providing investment management services;

or(B) Is related to the other person because:(I) The other person has an ownership interest of at least twenty percent, whether direct or indirect, in the related person;

or(II) A third person, or group of third persons who are affiliated persons with respect to each other, holds an ownership interest of more than twenty percent, whether direct or indirect, in the related persons.(ii) For the purposes of this subsection (4)(a):(A) "Indirect ownership interest" means an ownership interest in a person by virtue of an ownership interest in an entity that has an ownership interest in the person or in an entity that has an indirect ownership interest in the person.(B) "Ownership interest" means the possession of equity in the capital, the stock, or the profits of the other person.(b)(i) "Qualifying international investment management company" means a person:(A) Who is primarily engaged in the business of providing investment management services;

or(II) Collective investment funds with at least ten percent of their investments located outside the United States.(ii) The definitions in RCW 82.04.293 apply to this subsection (4)(((a)))(b).(((b)))(c)(i)(4)(a).(b)(i) "Standard financial information" means financial data, facts, or information, or financial information services, not generated, compiled, or developed only for a single customer.

Standard financial information includes, but is not limited to, financial market data, bond ratings, credit ratings, and deposit, loan, or mortgage reports.(ii) For purposes of this subsection (4)(((b)))(c),(4)(b), "financial market data" means market pricing information, such as for securities, commodities, and derivatives;

c 13 s 703 are each amended to read as follows:(1) The tax imposed by RCW 82.12.020 does not apply to the use of standard financial information by qualifying international investment management companiescompanies. or persons affiliated with a qualifying international investment management company.