SB 5610 — Establishing an equine industry tax credit, allowing the horse racing commission to impose a fee, and using equine industry sales tax revenues for federal regulatory compliance.

S-1426.2S-0854.1 SUBSTITUTE SENATE BILL 5610 State of Washington 69th Legislature 2025 Regular Session By Senate Business, Financial Services & Trade (originally sponsored by Senators Kauffman, Nobles, and Orwall)Orwall READRead FIRSTfirst TIMEtime 02/14/25.01/31/25.

ANReferred ACT Relating to allowingCommittee theon horseBusiness, racingFinancial commissionServices to& imposeTrade. a fee and using class 1 racing association sales tax revenues for federal regulatory compliance;

andAN addingACT newRelating sectionsto establishing an equine industry tax credit, allowing the horse racing commission to chapterimpose 67.16a RCW.fee, and using equine industry sales tax revenues for federal regulatory compliance;

adding new sections to chapter 67.16 RCW;

adding a new section to chapter 82.04 RCW;

creating a new section;

providing an effective date;

and declaring an emergency.

Revenues from the fees under this section must be deposited in the Washington equine industry federal regulatory account created in section 34 of this act.

A new section is added to chapter 67.1682.04 RCW to read as follows:

(1)(1)(a) ByIn Julycomputing 1,the 2027,tax andimposed byunder Julythis 1stchapter, ofa eachcredit yearis thereafter,allowed thefor stateall treasurer,amounts basedpaid upon information provided by thea departmentperson oflicensed revenue, must transfer from the general fund to theconduct Washingtonrace equine industry federal regulatory account created in section 3 of this act p.

1 SSBSB 5610 anmeets amountin notthis tostate exceedin $1,500,000an peramount fiscalequal yearto directly derived from the impositionamount ofpaid stateby parimutuelthe andperson sales and use taxes in the previousprior calendarstate fiscal year for:to:

(a)(i) PurchasesThe madefederal byhorseracing orintegrity purchasessafety soldauthority; and tax collected by a class 1 racing association;

(b)or Taxes(ii) submittedThe toWashington thehorse commissionracing undercommission. RCW 67.16.105;

and(b) (c)Amounts Feespaid submittedare inclusive of any applicable true-up calculations or credits made, granted, or applied to an assessment imposed on the commissionperson underby WACthe 260-49-070.federal horseracing integrity safety authority, for covered race meets in the state, pursuant to the horseracing integrity and safety act of 2020, 15 U.S.C.

(2)Sec. Following each biennium, the amount not to exceed in subsection (1) of this section may be reviewed and increased based on inflationary calculations as determined by the department of revenue and federal fee amounts as determined by the commission.

3051 et seq., as amended.

(2) A person must have made the payment before claiming a credit authorized under this section.

The credit may be used against any tax due under this chapter.

The amount of the credit claimed for a reporting period may not exceed the tax otherwise due under this chapter for that reporting period.

No refunds may be granted for any unused credits.

(3) To claim a credit under this section, a person must electronically file with the department all returns, forms, and any other information required by the department, in an electronic format as provided or approved by the department.

Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in electronic format.

(4) No application is necessary for the tax credit.

The person must keep records necessary for the department to verify eligibility under this section.

(5) The Washington horse racing commission must provide to the department, upon request, such information as may be needed to verify eligibility for credit under this section, including information regarding payments received by the commission.

(6) Chapter 82.32 RCW applies to the administration of this section.

(7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(a) "Race meet" has the same meaning as in RCW 67.16.010.

(b) "Returns" has the same meaning as "return" in RCW 82.32.050.

p.

2 SB 5610 (1) By July 1, 2026, and by July 1st of each year thereafter, the state treasurer, based upon information provided by the department of revenue, must transfer from the general fund to the Washington equine industry federal regulatory account created in section 4 of this act an amount not to exceed $1,500,000 per fiscal year directly derived from the imposition of state sales and use taxes charged or levied on the following equine products, services, or uses:

(a) Equines;

(b) Equine feed;

(c) Prescription drugs, over-the-counter drugs, or dietary supplements dispensed or to be dispensed to equines;

(d) Equine tack which includes, but is not limited to, equipment used to ride or care for an equine such as saddles, driving harnesses, girths, cinches, bridles, martingales, halters, lead ropes, whips, long reins, wraps, and other items used in handling and caring for equines;

(e) Horse bedding and grooming supplies;

(f) Other taxable sales directly related to equine ownership, riding, or boarding;

and (g) Sale of horses including equines claimed at class 1 and class C regulated race meets.

(2) Following each biennium, the amount not to exceed in subsection (1) of this section may be reviewed and increased based on inflationary calculations as determined by the department of revenue and federal fee amounts as determined by the Washington horse racing commission.