SB 6113 — Concerning taxes administered by the department of revenue.

(13)p. The term does not include the sale of or charge made for labor, services, or tangible personal property pursuant to agreements providing maintenance services for bus, rail, or rail fixed guideway equipment when a regional transit authority is the recipient of the labor, services, or tangible personal property, and a transit agency, as defined in RCW 81.104.015, performs the labor or services.

13 SB 6113 (13) The term does not include the sale of or charge made for labor, services, or tangible personal property pursuant to agreements providing maintenance services for bus, rail, or rail fixed guideway equipment when a regional transit authority is the recipient of the labor, services, or tangible personal property, and a transit agency, as defined in RCW 81.104.015, performs the labor or services.

Likewise, amounts paid by the event organizer to the golf facility p.are retail sales under this subsection (15)(a)(i), if such amounts vary based on the number of event participants;

14 ESSB 6113 are retail sales under this subsection (15)(a)(i), if such amounts vary based on the number of event participants;

(iv)p. Access to amusement park, theme park, and water park facilities, including but not limited to charges for admission and locker or cabana rentals.

14 SB 6113 (iv) Access to amusement park, theme park, and water park facilities, including but not limited to charges for admission and locker or cabana rentals.

p.(xii) Guided hunting and hunting at game farms and shooting preserves, except that hunting contests and license fees imposed by a government entity are not a retail sale under this subsection;

15(xiii) ESSBSwimming, 6113but (xii)only Guidedin huntingrespect andto hunting(A) atrecreational gameor farmsfitness swimming that is open to the public, such as open swim, lap swimming, and shootingspecial preserves,events exceptlike thatkids huntingnight contestsout and licensepool feesparties imposedduring byopen aswim governmenttime, entityand are(B) notpool aparties retailfor saleprivate underevents, thissuch subsection;p.

(xiii)15 Swimming,SB but6113 only in respect to (A) recreational or fitness swimming that is open to the public, such as open swim, lap swimming, and special events like kids night out and pool parties during open swim time, and (B) pool parties for private events, such as birthdays, family gatherings, and employee outings.

(xix) Nonmotorized snow sports and activities, such as downhill and cross-country skiing, snowboarding, ski jumping, sledding, snow tubing, snowshoeing, and similar snow sports and activities, whether engaged in outdoors or in an indoor facility with or without snow, but only in respect to discrete charges to the public for the use of p.land or facilities to engage in nonmotorized snow sports and activities, such as fees, however labeled, for the use of ski lifts and tows and daily or season passes for access to trails or other areas where nonmotorized snow sports and activities are conducted.

16 ESSB 6113 land or facilities to engage in nonmotorized snow sports and activities, such as fees, however labeled, for the use of ski lifts and tows and daily or season passes for access to trails or other areas where nonmotorized snow sports and activities are conducted.

(B) permits issued by a governmental entity to park a vehicle on or access public lands;p.

16 SB 6113 lands;

(16)(a) The term "sale at retail" or "retail sale" includes the purchase or acquisition of tangible personal property and specified services by a person who receives either a qualifying grant exempt p.from tax under RCW 82.04.767 or 82.16.320 or a grant deductible under RCW 82.04.4339, except for transactions excluded from the definition of "sale at retail" or "retail sale" by any other provision of this section.

17Nothing ESSBin 6113this fromsubsection tax(16) undermay RCWbe 82.04.767construed orto 82.16.320limit orthe aapplication grantof deductibleany underother RCWprovision 82.04.4339,of exceptthis forsection transactionsto excludedpurchases fromby thea definitionrecipient of "saleeither ata retail"qualifying orgrant "retailexempt sale"from bytax anyunder otherRCW provisionp. of this section.

Nothing17 inSB this6113 subsection (16) may be construed to limit the application of any other provision of this section to purchases by a recipient of either a qualifying grant exempt from tax under RCW 82.04.767 or a grant deductible under RCW 82.04.4339, or by any other person.

(17) The termterms "sale at retail" orand "retail sale" doesdo not include the following services if the sale occurs between members of an affiliated group as defined in RCW 82.04.299(1)(f):

(18)Sec. The term "sale at retail" or "retail sale" does not include services provided by a public agency to another public agency pursuant to an interlocal agreement under chapter 39.34 RCW.

p.

18 ESSB 6113 Sec.

(d)p. Prewritten computer software;

18 SB 6113 (d) Prewritten computer software;

For purposes of this subsection (3)(b)(i), "financial instruments" include cash, accounts receivable p.and payable, loans and notes receivable and payable, debt securities, equity securities, as well as derivative contracts such as forward contracts, swap contracts, and options;

19 ESSB 6113 and payable, loans and notes receivable and payable, debt securities, equity securities, as well as derivative contracts such as forward contracts, swap contracts, and options;

(v)p. Telecommunications services and ancillary services as those terms are defined in RCW 82.04.065;

19 SB 6113 (v) Telecommunications services and ancillary services as those terms are defined in RCW 82.04.065;

p.(xiv)(A) The use of a digital automated service that is incidental to the underlying service.

20 ESSB 6113 (xiv)(A) The use of a digital automated service that is incidental to the underlying service.

(I) The buyer of the underlying service uses the digital automated service provided by the service provider solely for the purposep. of transmitting or exchanging communications between the service provider and the buyer;

20 SB 6113 purpose of transmitting or exchanging communications between the service provider and the buyer;

(6)(a) "Digital goods," except as provided in (b) of this subsection (6), means sounds, images, data, facts, or information, or any combination thereof, transferred electronically, including, but not limited to, specified digital products and other products p.transferred electronically not included within the definition of specified digital products.

21 ESSB 6113 transferred electronically not included within the definition of specified digital products.

(iii)p. The internet and internet access as those terms are defined in RCW 82.04.297;

21 SB 6113 (iii) The internet and internet access as those terms are defined in RCW 82.04.297;

p.(11) "Subscription television services" means the sale of video programming by a television broadcaster as defined in RCW 82.08.0208, except as otherwise provided in this subsection.

22 ESSB 6113 (11) "Subscription television services" meansdoes thenot saleinclude of video programming bythat is sold on a televisionpay-per-program broadcasterbasis asor definedthat inallows RCWthe 82.08.0208,buyer exceptto asaccess otherwisea providedlibrary inof thisprograms subsection.at any time for a specific charge for that p.

"Subscription22 televisionSB services"6113 does not include video programming that is sold on a pay-per-program basis or that allows the buyer to access a library of programs at any time for a specific charge for that service, but only if the seller is not subject to a franchise fee in this state under the authority of Title 47 U.S.C.

542542(a) (a) on the gross revenue derived from the sale.

(e)(i) To aid in the effective administration of the surcharge in this subsection (1), the department may require persons believed to be engaging in advanced computing or affiliated with a person believed to be engaging in advanced computing to disclose whether p.they are a member of an affiliated group and, if so, to identify all other members of the affiliated group subject to the surcharge.

23(ii) ESSBIf 6113the theydepartment areestablishes, aby memberclear, cogent, and convincing evidence, that one or more members of an affiliated groupgroup, and,with ifintent so, to identifyevade allthe othersurcharge membersunder ofthis thesubsection affiliated(1), groupfailed subject to fully comply with this subsection (1)(e), the surcharge.department must p.

(ii)23 IfSB the6113 department establishes, by clear, cogent, and convincing evidence, that one or more members of an affiliated group, with intent to evade the surcharge under this subsection (1), failed to fully comply with this subsection (1)(e), the department must assess against that person, or those persons collectively, a penalty equal to 50 percent of the amount of the total surcharge payable by all members of that affiliated group for the calendar year during which the person or persons failed to fully comply with this subsection (1)(e).

p.332(d)(1), shall not be considered a select advanced computing business.

24A ESSBperson 6113who 332(d)(1),is primarily engaged in this state in the operation and provision of access to transmission facilities and infrastructure that the person owns or leases for the transmission of voice, data, text, sound, and video using wired telecommunications networks shall not be considered a select advanced computing business.p.

A24 personSB who6113 is primarily engaged in this state in the operation and provision of access to transmission facilities and infrastructure that the person owns or leases for the transmission of voice, data, text, sound, and video using wired telecommunications networks shall not be considered a select advanced computing business.

(4) Beginning in fiscal year 2028, and each year thereafter, when the number of qualified Washington state applicants exceeds the available enrollments by 100 at computer science engineering degree programs in four-year state universities, then a commensurate number of computer science and engineering degree enrollments at those state p.universities must be automatically added and funded for the surcharge imposed under this section to accommodate the additional demand.

25 ESSB 6113 universities must be automatically added and funded for the surcharge imposed under this section to accommodate the additional demand.

Sec.p.

25 SB 6113 Sec.

p.(ii) A national bank organized and existing as a national bank association pursuant to the provisions of the national bank act, 12 U.S.C.

26 ESSB 6113 (ii) A national bank organized and existing as a national bank association pursuant to the provisions of the national bank act, 12 U.S.C.

(v)p. Any corporation organized under the provisions of 12 U.S.C.

26 SB 6113 (v) Any corporation organized under the provisions of 12 U.S.C.

(x) Any other person or business entity, other than an insurance general agent taxable under RCW 82.04.280(1)(e), an insurance p.business exempt from the business and occupation tax under RCW 82.04.320, a real estate broker taxable under RCW 82.04.255, a securities dealer or international investment management company taxable under RCW 82.04.290(2), that receives more than 50 percent of its gross receipts from activities that a person described in (d)(ii) through (vii) and (ix) of this subsection is authorized to transact.

27p. ESSB 6113 business exempt from the business and occupation tax under RCW 82.04.320, a real estate broker taxable under RCW 82.04.255, a securities dealer or international investment management company taxable under RCW 82.04.290(2), that receives more than 50 percent of its gross receipts from activities that a person described in (d)(ii) through (vii) and (ix) of this subsection is authorized to transact.

27 SB 6113 (e)(i) "Specified financial institution" means a financial institution that is a member of a consolidated financial institution group that reported on its consolidated financial statement for the previous calendar year annual net income of at least $1,000,000,000, not including net income attributable to noncontrolling interests, as the terms "net income" and "noncontrolling interest" are used in the consolidated financial statement.

Except for taxpayers that report at least 50 percent of their taxable amount under RCW 82.04.255, 82.04.290(2)(a), ((and)) 82.04.285, and 82.04.405, the maximum credit p.for a taxpayer for a reporting period is $55 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.

28For ESSBa 6113taxpayer forthat areports taxpayerat forleast a50 reportingpercent periodof isits $55taxable multipliedamount byunder theRCW number82.04.255, of82.04.290(2)(a), months((and)) in82.04.285, and 82.04.405, the reportingmaximum period,credit asfor determineda underreporting RCWperiod 82.32.045.is $160 p.

For28 aSB taxpayer6113 that reports at least 50 percent of its taxable amount under RCW 82.04.255, 82.04.290(2)(a), ((and)) 82.04.285, and 82.04.405, the maximum credit for a reporting period is $160 multiplied by the number of months in the reporting period, as determined under RCW 82.32.045.

(C) p.charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

29 ESSB 6113 charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

(ii) When tangible personal property is rented or leased under circumstances that the consideration paid does not represent a reasonablep. rental for the use of the articles so rented or leased, the "selling price" must be determined as nearly as possible according to the value of such use at the places of use of similar products of like quality and character under such rules as the department may prescribe;

29 SB 6113 reasonable rental for the use of the articles so rented or leased, the "selling price" must be determined as nearly as possible according to the value of such use at the places of use of similar products of like quality and character under such rules as the department may prescribe;

p.(B) The purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount, however a "preferred customer" card that is available to any patron does not constitute membership in such a group;

30or ESSB(C) 6113 (B) The purchaserprice identifiesreduction himself or herselfdiscount tois theidentified seller as a memberthird ofparty a group or organization entitled to a price reduction or discount,discount howeveron athe "preferredinvoice customer"received cardby thatthe isp. available to any patron does not constitute membership in such a group;

or30 (C)SB The6113 price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser;

(4) "Delivery charges" means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser of personal property or services including, but not limited to, transportation, shipping, postage, handling, crating, and packing;

31 ESSBSB 6113 (4)(5) "Delivery"Direct charges"mail" means chargesprinted bymaterial thedelivered selleror ofdistributed personalby propertyUnited States mail or servicesother fordelivery preparationservice andto deliverya mass audience or to addressees on a locationmailing designatedlist provided by the purchaser ofor personalat propertythe ordirection servicesof including,the butpurchaser notwhen limitedthe to,cost transportation,of shipping,the postage,items handling,are crating,not andbilled packing;directly to the recipients.

(5) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items are not billed directly to the recipients.

or p.(c) To construe the term "property" or "personal property" as including digital goods and products sold through the use of digital codes would yield unlikely, absurd, or strained consequences;

32 ESSB 6113 (c) To construe the term "property" or "personal property" as including digital goods and products sold through the use of digital codes would yield unlikely, absurd, or strained consequences;

(12) The terms "agriculture," "farming," "horticulture," "horticultural," and "horticultural product" may not be construed to includep. or relate to cannabis, useable cannabis, or cannabis-infused products unless the applicable term is explicitly defined to include cannabis, useable cannabis, or cannabis-infused products.

32 SB 6113 include or relate to cannabis, useable cannabis, or cannabis-infused products unless the applicable term is explicitly defined to include cannabis, useable cannabis, or cannabis-infused products.

and p.(iii) Engages directly or indirectly, through one or more affiliated persons, in any of the following activities with respect to the seller's products:

33 ESSB 6113 (iii) Engages directly or indirectly, through one or more affiliated persons, in any of the following activities with respect to the seller's products:

(E)p. Branding sales as those of the marketplace facilitator;

33 SB 6113 (E) Branding sales as those of the marketplace facilitator;

(17) "Remote seller" means any seller, including a marketplace facilitator, who does not have a physical presence in this state and p.makes retail sales to purchasers or facilitates retail sales on behalf of marketplace sellers.

34 ESSB 6113 makes retail sales to purchasers or facilitates retail sales on behalf of marketplace sellers.

(1)p. There is levied and collected a tax equal to six and five- tenths percent of the selling price on each retail sale in this state of:

34 SB 6113 (1) There is levied and collected a tax equal to six and five- tenths percent of the selling price on each retail sale in this state of:

The vehicle owner must submit documentation in a form and manner prescribed by the department to the business facilitating peer-to-peer car sharing transactions indicating whether the shared vehicle owner paid state sales tax or use tax on the shared vehicle at the time the vehicle was obtained.

Businesses facilitating peer-to-peer car sharing transactions must retain copies of this documentation for the period required in RCW 82.32.070.

(ii) A peer-to-peer car sharing program must not allow a vehicle to be placed on a digital network or software application of the peer-to-peer car sharing program for the purpose of making the p.

35 ESSBSB 6113 vehicle(ii) availableFor forpurposes sharingof throughthis the((subsection peer-to-peer(2)(b))) carsection, sharing"peer- programto-peer unless the peer-to-peer car sharingsharing" programhas first requests an electronic certification from the sharedsame vehiclemeaning owner as toin whether the shared vehicle owner obtained the shared vehicle as a vehicle for resale using a reseller permit or an approved exemption certificate under RCW 82.04.470.46.74A.010.

The peer-to-peer car sharing program must maintain a record of such certification for a period of no less than five years.

(iii) A peer-to-peer car sharing program may rely in good faith on the shared vehicle owner's certification as to whether the shared vehicle owner obtained the shared vehicle as a vehicle for resale using a reseller permit or an approved exemption certificate under RCW 82.04.470.

Such good faith reliance on the shared vehicle owner's certification does not subject the peer-to-peer car sharing program to any tax liability, or penalties or interest, that may be imposed on the shared vehicle owner.

(iv) For purposes of this ((subsection (2)(b))) section, "peer- to-peer car sharing" has the same meaning as in RCW 46.74A.010.

p.(d) For purposes of this subsection, "recreational vessel" means a vessel as defined in RCW 88.02.310 that is subject to watercraft excise tax under chapter 82.49 RCW.

36 ESSB 6113 (d) For purposes of this subsection, "recreational vessel" means a vessel as defined in RCW 88.02.310 that is subject to watercraft excise tax under chapter 82.49 RCW.

(7)p. Beginning July 1, 2027, the portion of taxes collected by the state under subsection (1) of this section equal to 0.1 percent of the selling price on each retail sale in this state must be deposited in the multimodal transportation account created in RCW 47.66.070.

36 SB 6113 (7) Beginning July 1, 2027, the portion of taxes collected by the state under subsection (1) of this section equal to 0.1 percent of the selling price on each retail sale in this state must be deposited in the multimodal transportation account created in RCW 47.66.070.

The exemption provided in this subsection (2) does not apply p.unless the purchaser has the legal right to broadcast, rebroadcast, transmit, retransmit, license, relicense, distribute, redistribute, or exhibit the product, in whole or in part, to the general public.

37 ESSB 6113 unless the purchaser has the legal right to broadcast, rebroadcast, transmit, retransmit, license, relicense, distribute, redistribute, or exhibit the product, in whole or in part, to the general public.

(b)p. For purposes of this subsection (3), the following definitions apply:

37 SB 6113 (b) For purposes of this subsection (3), the following definitions apply:

(b) A buyer is entitled to use an exemption certificate claiming multiple points of use only if the buyer is a business or other organization and the digital goods or digital automated services purchased, or the digital goods or digital automated services to be obtained by the digital code purchased, or the prewritten computer p.software or services defined as a retail sale in RCW 82.04.050(6) (((c))) (b) purchased will be concurrently available for use within and outside this state.

38 ESSB 6113 software or services defined as a retail sale in RCW 82.04.050(6) (((c))) (b) purchased will be concurrently available for use within and outside this state.

(d) For purposes of this subsection (4), "concurrently available for use within and outside this state" means that employees or other agents of the buyer may use the digital goods, digital automated services, prewritten computer software, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) simultaneously from one or more locations within this state and one or more locations outside thisp. state.

38 SB 6113 this state.

p.(6)(a) The tax imposed by RCW 82.08.020 does not apply to the sale of advertising services when the buyer of the advertising service provides the seller with an exemption certificate claiming multiple points of use.

39 ESSB 6113 (6)(a) The tax imposed by RCW 82.08.020 does not apply to the sale of advertising services when the buyer of the advertising services provides the seller with an exemption certificate claiming multiple points of use.

(i)p. "Advertising services" means "advertising services" that are defined as a "retail sale" or "sale at retail" in RCW 82.04.050(3)(k);

39 SB 6113 (i) "Advertising services" means "advertising services" that are defined as a "retail sale" or "sale at retail" in RCW 82.04.050(3)(k);

or p.(ii) Use at least one method of propulsion that is capable of being reenergized by an external source of electricity and are capable of traveling at least 30 miles using only battery power;

40 ESSB 6113 (ii) Use at least one method of propulsion that is capable of being reenergized by an external source of electricity and are capable of traveling at least 30 miles using only battery power;

(b)(i)p. The exemption in this section is applicable for up to the amounts specified in (b)(ii) or (iii) of this subsection of:

40 SB 6113 (b)(i) The exemption in this section is applicable for up to the amounts specified in (b)(ii) or (iii) of this subsection of:

p.(2) The seller must keep records necessary for the department to verify eligibility under this section.

41 ESSB 6113 (2) The seller must keep records necessary for the department to verify eligibility under this section.

A seller is not responsible for repayment of the tax exemption under this section and RCW 82.12.9999 for a vehicle if the department of licensing's published list of qualifyingp. vehicle models on the purchase date or the date the lease agreement was signed includes the vehicle model and the department of licensing subsequently removes the vehicle model from the published list, and, if applicable, the vehicle meets the qualifying criterion under subsection (1)(a)(iii)(B) of this section and RCW 82.12.9999(1)(a)(iii)(B).

41 SB 6113 qualifying vehicle models on the purchase date or the date the lease agreement was signed includes the vehicle model and the department of licensing subsequently removes the vehicle model from the published list, and, if applicable, the vehicle meets the qualifying criterion under subsection (1)(a)(iii)(B) of this section and RCW 82.12.9999(1)(a)(iii)(B).

p.(5) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

42 ESSB 6113 (5) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(b)p. All leased vehicles that qualified for the exemption under this section before the qualification period end date must continue to receive the exemption as described under subsection (1)(b) of this section on any lease payments due through the remainder of the lease before August 1, 2028.

42 SB 6113 (b) All leased vehicles that qualified for the exemption under this section before the qualification period end date must continue to receive the exemption as described under subsection (1)(b) of this section on any lease payments due through the remainder of the lease before August 1, 2028.

p.Sec.

43 ESSB 6113 Sec.

(4)(a)(i)p. Except as provided in (a)(ii) of this subsection (4), "retailer" means every seller as defined in RCW 82.08.010 and every person engaged in the business of selling tangible personal property at retail and every person required to collect from purchasers the tax imposed under this chapter.

43 SB 6113 (4)(a)(i) Except as provided in (a)(ii) of this subsection (4), "retailer" means every seller as defined in RCW 82.08.010 and every person engaged in the business of selling tangible personal property at retail and every person required to collect from purchasers the tax imposed under this chapter.

p.(5) "Taxpayer" and "purchaser" include all persons included within the meaning of the word "buyer" and the word "consumer" as defined in chapters 82.04 and 82.08 RCW.

44 ESSB 6113 (5) "Taxpayer" and "purchaser" include all persons included within the meaning of the word "buyer" and the word "consumer" as defined in chapters 82.04 and 82.08 RCW.

(c)p. With respect to an extended warranty, the first act within this state after the extended warranty has been acquired by which the taxpayer takes or assumes dominion or control over the article of tangible personal property to which the extended warranty applies, and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state;

44 SB 6113 (c) With respect to an extended warranty, the first act within this state after the extended warranty has been acquired by which the taxpayer takes or assumes dominion or control over the article of tangible personal property to which the extended warranty applies, and includes installation, storage, withdrawal from storage, distribution, or any other act preparatory to subsequent actual use or consumption of the article within this state;

p.(g) With respect to a service defined as a retail sale in RCW 82.04.050(2)(g), the first act within this state after the service has been performed by which the taxpayer, as a consumer, views, accesses, downloads, possesses, stores, opens, manipulates, or otherwise uses or enjoys the digital good upon which the service was performed;

45 ESSB 6113 (g) With respect to a service defined as a retail sale in RCW 82.04.050(2)(g), the first act within this state after the service has been performed by which the taxpayer, as a consumer, views, accesses, downloads, possesses, stores, opens, manipulates, or otherwise uses or enjoys the digital good upon which the service was performed;

In case the article used is acquired by lease or by gift or is extracted, produced, or manufactured by the person using the same or is sold under conditions wherein the purchase price does not represent the true value thereof, the value of the article used is determined as nearly as possible accordingp. to the retail selling price at place of use of similar products of like quality and character under such rules as the department may prescribe.

45 SB 6113 according to the retail selling price at place of use of similar products of like quality and character under such rules as the department may prescribe.

In case any such articles of tangible personal property are used in respect to the construction, repairing, decorating, or improving of, and which become or are to become an ingredient or component of, new or existing buildings or other structures under, upon, or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any such articles therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation, then the value of the use of such articles so used is determined according to the retail p.selling price of such articles, or in the absence of such a selling price, as nearly as possible according to the retail selling price at place of use of similar products of like quality and character or, in the absence of either of these selling price measures, such value may be determined upon a cost basis, in any event under such rules as the department of revenue may prescribe.

46 ESSB 6113 selling price of such articles, or in the absence of such a selling price, as nearly as possible according to the retail selling price at place of use of similar products of like quality and character or, in the absence of either of these selling price measures, such value may be determined upon a cost basis, in any event under such rules as the department of revenue may prescribe.

(e) In the case of an article manufactured or produced for purposes of serving as a prototype for the development of a new or improvedp. product, the value of the article used is determined by:

46 SB 6113 improved product, the value of the article used is determined by:

If the digital good ((or p.digital code)) is acquired other than by purchase, the value of the digital good ((or digital code)) must be determined as nearly as possible according to the retail selling price at place of use of similar digital goods ((or digital codes)) of like quality and character under rules the department may prescribe.

47 ESSB 6113 digital code)) is acquired other than by purchase, the value of the digital good ((or digital code)) must be determined as nearly as possible according to the retail selling price at place of use of similar digital goods ((or digital codes)) of like quality and character under rules the department may prescribe.

Sec.p.

47 SB 6113 Sec.

(c) ((Services)) (i) Until September 30, 2025, services defined as a retail sale in RCW 82.04.050 (2) (a) or (g) or (6)(((c))) (b), p.excluding services defined as a retail sale in RCW 82.04.050(6) (((c))) (b) that are provided free of charge;

48(ii) ESSBBeginning 6113October excluding1, 2025, services defined as a retail sale in RCW 82.04.050(6)82.04.050 (((c)))(2) (b)(a) or (g), (3) (g), (h), (i), (j), or (k), or (6)(b), excluding services defined as a retail sale in RCW 82.04.050(6)(b) that are provided free of charge;

(ii) Beginning October 1, 2025, services defined as a retail sale in RCW 82.04.050 (2) (a) or (g), (3) (g), (h), (i), (j), or (k), or (6)(b), excluding services defined as a retail sale in RCW 82.04.050(6)(b) that are provided free of charge and services excluded from the definition of "sale at retail" or "retail sale" under RCW 82.04.050(17);

(iii)p. With respect to digital goods, digital automated services, and digital codes acquired other than by purchase, the tax imposed in this subsection (1)(e) applies regardless of whether or not the consumer has a right of permanent use or is obligated to make continued payment as a condition of use.

48 SB 6113 (iii) With respect to digital goods, digital automated services, and digital codes acquired other than by purchase, the tax imposed in this subsection (1)(e) applies regardless of whether or not the consumer has a right of permanent use or is obligated to make continued payment as a condition of use.

(b) Beginning October 1, 2025, the provisions of this chapter do not apply in respect to the use of any article of tangible personal p.property, extended warranty, digital good, digital code, digital automated service, or service taxable under RCW 82.04.050 (2) (a) or (g), (3) (g), (h), (i), (j), or (k), or (6)(b), if the sale to, or the use by, the present user or the present user's bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by the present user's bailor or donor.

49 ESSB 6113 property, extended warranty, digital good, digital code, digital automated service, or service taxable under RCW 82.04.050 (2) (a) or (g), (3) (g), (h), (i), (j), or (k), or (6)(b), if the sale to, or the use by, the present user or the present user's bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by the present user's bailor or donor.

(ii) In respect to the use of any article of tangible personal property acquired by bailment and the tax has once been paid based on reasonable rental as determined by RCW 82.12.060 measured by the value of the article at time of first use multiplied by the tax rate imposedp. by chapter 82.08 RCW or this chapter as of the time of first use;

49 SB 6113 imposed by chapter 82.08 RCW or this chapter as of the time of first use;

((or))or (iv) To the use of digital goods or digital automated services, which were obtained through the use of a digital code, if the sale of the digital code to, or the use of the digital code by, the present user or the present user's bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by the present user's bailor or donor;donor.

(4)(a) Except as provided in (b) of this subsection (4), the tax is levied and must be collected in an amount equal to the value of the article used, value of the digital good or (v)digital Thecode useused, value of anythe serviceextended taxablewarranty underused, RCWor 82.04.050value ifof the service isused rendered by the taxpayer'staxpayer, ownmultiplied employeesby the applicable rates in effect for the courseretail ofsales theirtax employment.under RCW 82.08.020.

p.

50 ESSB 6113 (4)(a) Except as provided in (b) of this subsection (4), the tax is levied and must be collected in an amount equal to the value of the article used, value of the digital good or digital code used, value of the extended warranty used, or value of the service used by the taxpayer, multiplied by the applicable rates in effect for the retail sales tax under RCW 82.08.020.

(c)p. For purposes of this subsection, "recreational vessel" means a vessel as defined in RCW 88.02.310 that is subject to watercraft excise tax under chapter 82.49 RCW.

50 SB 6113 (c) For purposes of this subsection, "recreational vessel" means a vessel as defined in RCW 88.02.310 that is subject to watercraft excise tax under chapter 82.49 RCW.

(2) The provisions of this chapter do not apply to the use by a business or other organization of digital goods, digital codes, digital automated services, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) for the purpose of making the digital good or digital automated service, including a digital good or p.digital automated service acquired through the use of a digital code, or service defined as a retail sale in RCW 82.04.050(6)(((c))) (b) available free of charge for the use or enjoyment of the general public.

51 ESSB 6113 digital automated service acquired through the use of a digital code, or service defined as a retail sale in RCW 82.04.050(6)(((c))) (b) available free of charge for the use or enjoyment of the general public.

(5)p. The provisions of this chapter do not apply in respect to the use of digital products or digital codes obtained by the end user free of charge.

51 SB 6113 (5) The provisions of this chapter do not apply in respect to the use of digital products or digital codes obtained by the end user free of charge.

(7)(a) A business or other organization subject to the tax imposed in RCW 82.12.020 on the use of digital goods, digital codes, digital automated services, prewritten computer software, or services p.defined as a retail sale in RCW 82.04.050 (3)(k) and (6)(((c))) (b) that are concurrently available for use within and outside this state is entitled to apportion the amount of tax due this state based on users in this state compared to users everywhere.

52 ESSB 6113 defined as a retail sale in RCW 82.04.050 (3)(k) and (6)(((c))) (b) that are concurrently available for use within and outside this state is entitled to apportion the amount of tax due this state based on users in this state compared to users everywhere.

(i)p. "Concurrently available for use within and outside this state" means that the taxpayer, employees, or other agents of the taxpayer may use the digital goods, digital automated services, prewritten computer software, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) simultaneously at one or more locations within this state and one or more locations outside this state.

52 SB 6113 (i) "Concurrently available for use within and outside this state" means that the taxpayer, employees, or other agents of the taxpayer may use the digital goods, digital automated services, prewritten computer software, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) simultaneously at one or more locations within this state and one or more locations outside this state.

and (ii) (("User")) (A) Except as provided otherwise in (d)(ii)(B) of this subsection (7), for the purposes of this subsection (7), "user" means an employee or agent of the taxpayer who is authorized by the taxpayer to use the digital goods, digital automated services, p.prewritten computer software, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) in the performance of his or her duties as an employee or other agent of the taxpayer.

53 ESSB 6113 prewritten computer software, or services defined as a retail sale in RCW 82.04.050(6)(((c))) (b) in the performance of his or her duties as an employee or other agent of the taxpayer.

(c) For purposes of this subsection (8), "radio or television broadcaster" includes satellite radio providers, satellite television providers, cable television providers, providers of subscription internetp. television, and persons who provide radio or television broadcasting to listeners or viewers for no charge.

53 SB 6113 internet television, and persons who provide radio or television broadcasting to listeners or viewers for no charge.

p.(1) The director may grant a direct pay permit to a taxpayer who demonstrates, to the satisfaction of the director, that the taxpayer meets the requirements of this section.

54 ESSB 6113 (1) The director may grant a direct pay permit to a taxpayer who demonstrates, to the satisfaction of the director, that the taxpayer meets the requirements of this section.

A taxpayerp. who transacts business in two or more locations may submit one application to cover the multiple locations.

54 SB 6113 taxpayer who transacts business in two or more locations may submit one application to cover the multiple locations.

The direct pay permit must clearly state that the holder is solely responsible for p.the accrual and payment of the tax imposed under chapters 82.08 and 82.12 RCW and that the seller is relieved of liability to collect tax imposed under chapters 82.08 and 82.12 RCW on all sales to the direct pay permit holder.

55 ESSB 6113 the accrual and payment of the tax imposed under chapters 82.08 and 82.12 RCW and that the seller is relieved of liability to collect tax imposed under chapters 82.08 and 82.12 RCW on all sales to the direct pay permit holder.

(5) A direct pay permit is subject to revocation by the director at any time the department determines that the taxpayer has violated any provision of this section or that revocation would be in the best interestsp. of collecting the taxes due under this title.

55 SB 6113 interests of collecting the taxes due under this title.

(7) Except as provided in this subsection, the direct pay permit may be used for any purchase of tangible personal property and any p.retail sale under RCW 82.04.050.

56 ESSB 6113 retail sale under RCW 82.04.050.

(a) When tangible personal property, an extended warranty, a digital good, ((digital code,)) digital automated service, or other service defined as a retail sale under RCW 82.04.050 is received by thep. purchaser at a business location of the seller, the sale is sourced to that business location.

56 SB 6113 the purchaser at a business location of the seller, the sale is sourced to that business location.

(c) When (a) and (b) of this subsection do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are p.maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith.

57 ESSB 6113 maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith.

The primary property location shall be as indicated by an address for the propertyp. provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith.

57 SB 6113 property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith.

p.(3) The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment shall be sourced as provided in this subsection.

58 ESSB 6113 (3) The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment shall be sourced as provided in this subsection.

(B)p. A streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written statement approved, authorized, or accepted by the department);

58 SB 6113 (B) A streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written statement approved, authorized, or accepted by the department);

The purchaser must source the sale to the jurisdictions to which the advertising and promotional direct p.mail is to be delivered to the recipients and must report and pay any applicable tax due.

59 ESSB 6113 mail is to be delivered to the recipients and must report and pay any applicable tax due.

(iii) If the purchaser provides the permit, certificate, or statement referred to in (b)(ii)(A) or (B) of this subsection (5), thep. seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the permit, certificate, or statement applies.

59 SB 6113 the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the permit, certificate, or statement applies.

(b) If the purchaser of direct mail provides the seller with a direct pay permit or a streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written p.statement approved, authorized, or accepted by the department), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit the applicable tax on any transaction involving direct mail to which the permit, certificate, or statement applies.

60 ESSB 6113 statement approved, authorized, or accepted by the department), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit the applicable tax on any transaction involving direct mail to which the permit, certificate, or statement applies.

(c)p. A retail sale, excluding the lease and rental, of a motor vehicle, trailer, semitrailer, or aircraft, that do not qualify as transportation equipment;

60 SB 6113 (c) A retail sale, excluding the lease and rental, of a motor vehicle, trailer, semitrailer, or aircraft, that do not qualify as transportation equipment;

(b) A retail sale of the providing of ancillary services, as that term is defined in RCW 82.04.065, is sourced to the customer's place of primary use of the telecommunications services in respect to which p.the ancillary services are associated with or incidental to.

61 ESSB 6113 the ancillary services are associated with or incidental to.

(d)(i)p. "Other direct mail" means any direct mail that is not advertising and promotional direct mail, regardless of whether advertising and promotional direct mail is included in the same mailing.

61 SB 6113 (d)(i) "Other direct mail" means any direct mail that is not advertising and promotional direct mail, regardless of whether advertising and promotional direct mail is included in the same mailing.

p.(e) "Florist sales" means the retail sale of tangible personal property by a florist.

62 ESSB 6113 (e) "Florist sales" means the retail sale of tangible personal property by a florist.

(iii) Aircraft that are operated by air carriers authorized and certificated by the United States department of transportation or anotherp. federal or foreign authority to engage in the carriage of persons or property in interstate or foreign commerce;

62 SB 6113 another federal or foreign authority to engage in the carriage of persons or property in interstate or foreign commerce;

p.(1)(a) In addition to taxes required under chapters 82.08, 82.12, and 82.48 RCW, there is levied and collected from every person in this state a tax for the privilege of using within this state as a consumer any noncommercial aircraft if the value of the aircraft exceeds $500,000.

63 ESSB 6113 (1)(a) In addition to taxes required under chapters 82.08, 82.12, and 82.48 RCW, there is levied and collected from every person in this state a tax for the privilege of using within this state as a consumer any noncommercial aircraft if the value of the aircraft exceeds $500,000.

(1)p. For the purposes of determining the tax due under this chapter, a deduction is allowed for the value of the decedent's qualified family-owned business interests, not to exceed the applicable deduction amount, if:

63 SB 6113 (1) For the purposes of determining the tax due under this chapter, a deduction is allowed for the value of the decedent's qualified family-owned business interests, not to exceed the applicable deduction amount, if:

(ii) There was material participation, within the meaning of section 2032A(e)(6)2032A (e)(6) of the internal revenue code, by the decedent or p.a member of the decedent's family in the operation of the trade or business to which such interests relate;

64 ESSB 6113 a member of the decedent's family in the operation of the trade or business to which such interests relate;

(ii) The qualified heir disposes of any portion of a qualified family-owned business interest, other than by a disposition to a member of the qualified heir's family or a person with an ownership interest in the qualified family-owned business or through a qualifiedp. conservation contribution under section 170(h) of the internal revenue code;

(iii)64 TheSB 6113 qualified heirconservation losescontribution Unitedunder States citizenship within the meaning of section 877170(h) of the internal revenue code or with respect to whom section 877 (e)(1) applies, and such heir does not comply with the requirements of section 877(g) of the internal revenue code;

(iii) The qualified heir loses United States citizenship within the meaning of section 877 of the internal revenue code or with respect to whom section 877(e)(1) applies, and such heir does not comply with the requirements of section 877(g) of the internal revenue code;

(c) Interest applies to the tax due under this subsection for the period beginning on the date that the estate tax liability was due p.under this chapter and ending on the date the additional estate tax due under this subsection is paid.

65 ESSB 6113 under this chapter and ending on the date the additional estate tax due under this subsection is paid.

(g)p. Security acceptable to the department may be substituted for the lien imposed by (f) of this subsection.

65 SB 6113 (g) Security acceptable to the department may be substituted for the lien imposed by (f) of this subsection.

p.(b) The department may also require any qualified heir to submit to the department on an ongoing basis such information as the department determines necessary or useful in determining whether the qualified heir is subject to the additional tax imposed in subsection (3) of this section.

66 ESSB 6113 (b) The department may also require any qualified heir to submit to the department on an ongoing basis such information as the department determines necessary or useful in determining whether the qualified heir is subject to the additional tax imposed in subsection (3) of this section.

The annual adjustment is determined by multiplyingp. $3,000,000 by the sum of one and the percentage by which the most recent October consumer price index exceeds the consumer price index for October 2024, and rounding the result to the nearest $1,000.

66 SB 6113 multiplying $3,000,000 by the sum of one and the percentage by which the most recent October consumer price index exceeds the consumer price index for October 2024, and rounding the result to the nearest $1,000.

p.(e) "Qualified heir" has the same meaning as provided in section 2057(i) of the internal revenue code of 1986.

67 ESSB 6113 (e) "Qualified heir" has the same meaning as provided in section 2057(i) of the internal revenue code of 1986.

or (c) any land meeting the definition of farm and agricultural conservation land under subsectionp. (8) of this section.

67 SB 6113 subsection (8) of this section.

p.(b)(i) Any parcel of land that is five acres or more but less than 20 acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to, as of January 1, 1993:

68 ESSB 6113 (b)(i) Any parcel of land that is five acres or more but less than 20 acres devoted primarily to agricultural uses, which has produced a gross income from agricultural uses equivalent to, as of January 1, 1993:

(i) $1,000 or more per year for three of the five calendar years preceding the date of application for classification under this chapter for all parcels of land that are classified under this subsectionp. or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993;

68 SB 6113 subsection or all parcels of land for which an application for classification under this subsection is made with the granting authority prior to January 1, 1993;

p.(i) Has produced a gross income from agricultural uses equivalent to $200 or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter;

69 ESSB 6113 (i) Has produced a gross income from agricultural uses equivalent to $200 or more per acre per year for three of the five calendar years preceding the date of application for classification under this chapter;

(f)p. The land on which housing for employees and the principal place of residence of the farm operator or owner of land classified pursuant to (a) of this subsection is sited if:

69 SB 6113 (f) The land on which housing for employees and the principal place of residence of the farm operator or owner of land classified pursuant to (a) of this subsection is sited if:

(h) Any land primarily used for commercial horticultural purposes, including growing seedlings, trees, shrubs, vines, fruits, p.vegetables, flowers, herbs, and other plants in containers, whether under a structure or not, subject to the following:

70 ESSB 6113 vegetables, flowers, herbs, and other plants in containers, whether under a structure or not, subject to the following:

The term includes landp. used for incidental uses ((that are compatible with the growing and harvesting of timber but no more than 10 percent of the land may be used for such incidental uses)).

70 SB 6113 land used for incidental uses ((that are compatible with the growing and harvesting of timber but no more than 10 percent of the land may be used for such incidental uses)).

Land divided by a public road, p.but otherwise an integral part of a farming operation, is considered contiguous.

71 ESSB 6113 but otherwise an integral part of a farming operation, is considered contiguous.

and (D)p. The spouse or domestic partner of any individual described in (b)(ii)(C) of this subsection (6).

71 SB 6113 (D) The spouse or domestic partner of any individual described in (b)(ii)(C) of this subsection (6).

p.(9) "Appurtenance" means something used with, and related to or dependent upon another thing that is, something that belongs to something else, an adjunct.

72 ESSB 6113 (9) "Appurtenance" means something used with, and related to or dependent upon another thing that is, something that belongs to something else, an adjunct.

(i)p. Is compatible with commercial growing and harvesting of timber;

72 SB 6113 (i) Is compatible with commercial growing and harvesting of timber;

p.(1) For amounts received during the chapter 422, Laws of 2025 transition period, a person with a qualifying existing contract may elect to treat such amounts as gross income of the business subject to the tax under either RCW 82.04.250 or 82.04.290(2).

73(2) ESSBIf 6113a (1)person Forwith amountsa receivedqualifying duringexisting thecontract chaptermakes 422,no Lawselection under subsection (1) of 2025this section during the transition period, aamounts personreceived withfrom aperforming qualifyingthe existingservices of that contract mayduring electthe totransition treatperiod, such amounts asare gross income of the business subject to the tax under either RCW 82.04.25082.04.250. or 82.04.290(2).

(2)(3) If a person witheither aelects qualifyingto existingtreat contracteither makesamounts noreceived electionas undergross subsectionincome (1) of thisthe sectionbusiness duringsubject to the transitiontax period,under amountsRCW received82.04.250 fromor performingamounts theare servicesgross income of thatthe contractbusiness duringsubject to the transitiontax periodunder areRCW gross82.04.250(2), incomeor ofboth, the businessamounts are subject to the tax imposed under RCWchapter 82.04.250.82.08 RCW.

(3) If a person either elects to treat amounts received under a qualifying existing contract as gross income of the business subject to the tax under RCW 82.04.250, gross income of the business subject to the tax under RCW 82.04.250(2), or both, the amounts are subject to the tax imposed under chapter 82.08 RCW.

(iii)p. The underlying services of that contract would be services defined as a retail sale under RCW 82.04.050(3) (g) through (l) beginning October 1, 2025;

73 SB 6113 (iii) The underlying services of that contract would be services defined as a retail sale under RCW 82.04.050(3) (g) through (l) beginning October 1, 2025;

ARCW new82.04.29001 section(Creation isand addeddistribution toof chaptercustom 82.32software RCW— toCustomization readof asprewritten follows:computer software— Taxable services) and 2003 c 168 s 602 & 1998 c 332 s 4 are each repealed.

(1)NEW ExceptSECTION. as otherwise provided in subsections (2) through (5) of this section, the department shall waive penalties otherwise due under this chapter if all of the following conditions are met:

p.

74 ESSB 6113 (a)(i) The penalties are imposed with respect to state and local sales taxes;

and (ii) tax liability is a result of a failure to collect sales taxes on the additional select services subject to sales tax as provided in section 101, chapter 422, Laws of 2025 for tax reporting periods through December 31, 2026;

(b) The taxpayer files with the department any amended or outstanding returns covering tax liabilities with respect to which a penalty waiver under this section is requested;

(c) The taxpayer remits full payment to the department of the balance due on all tax liabilities for which a penalty waiver under this section is requested;

(d) The taxpayer has timely filed returns and remitted payment on all taxes due for a period of 24 months immediately preceding the period covered by the return for which the waiver is being requested;

and (e) The taxpayer must never have had an evasion penalty assessed against the taxpayer by the department under RCW 82.32.090 or a penalty assessed against the taxpayer by the department under RCW 82.32.291 for misusing a reseller permit or resale certificate.

(2)(a) The taxpayer must submit a completed application for a penalty waiver under this section in a form and manner prescribed by the department.

(b) Applications for a penalty waiver under this section must be submitted to the department on or before September 30, 2027.

(3) The department must assess interest on unpaid tax liability for which a penalty waiver under this section is requested.

The interest must be assessed at the rate provided for delinquent taxes under this chapter.

(4) All tax liability reported and paid as required in subsection (1) of this section is subject to verification by the department as provided in RCW 82.32.050.

This section does not preclude the assessment of taxes, penalties, and interest with respect to any amounts determined by the department to have been underpaid for any tax period for which the taxpayer previously received penalty relief under this section.

(5) This section does not apply to sales tax liabilities for tax reporting periods beginning on or after January 1, 2027.

(6) This section expires January 1, 2029.

p.

75 ESSB 6113 NEW SECTION.

RCWSections 82.04.290012, (Creation3, and4, distribution8, of10, custom12 software—Customizationthrough of18, prewritten computer software—Taxable services) and 200322 cof 168this sact 602apply &both 1998prospectively cand 332retroactively sto 4October are1, each2025. repealed.

Sections 2,5 3, 4, 8, 10, 12 through 18, and 226 of this act apply both prospectively and retroactively to OctoberJanuary 1, 2025.2026.

SectionsIf 5any andprovision 6excluding activities from the definition of thisadvertising actservices applyunder bothRCW prospectively82.04.050(3)(k)(ii) andis retroactivelyheld toinvalid, Januarythe 1,entirety 2026.of RCW 82.04.050(3)(k)(ii) is invalid.

It is the intent of the legislature to broadly define the sale of advertising services as a retail sale.

7674 ESSBSB 6113