Today, the Senate passed Substitute Senate Bill 6143. SSB 6143 is one of a two-bill revenue package that the Senate Ways & Means Committee took action on late this week.  The other revenue bill SSB 6874 – increases taxes on tobacco products – awaits further action on the Senate floor.

SSB 6143 modifies excise tax laws to preserve funding for public schools, colleges, and universities, as well as other public systems essential for the safety, health, and security of all Washingtonians.

SSB 6143 includes a proposed temporary three-tenths of 1 percent sales tax increase and the implementation of the Working Families Tax Credit. The sales tax increase would be for three years and would include funding for the Working Families Tax Credit to dramatically reduce the impact on low income families. The Washington Department of Revenue has estimated the tax increase would cost the typical household $29.33 a year. The tax credit, provided to those eligible for the federal Earned Income Tax Credit, would provide a minimum rebate of $25.

In addition, the bill closes more than a dozen tax loopholes ( No longer among them is a sales tax exemption for used car trade-ins). Finally, the bill includes the implementation of a sales tax on bottled water and the implementation of a three-year business and occupation tax surcharge on services of one-quarter of 1 percent. The latter would be teamed with an increase in the small business tax credit from $35 per month to $70 per month.

The Senate considered 27 amendments to the bill, of which seven were adopted.

1. Removed the appropriation and the state expenditure limit sections of the underlying bill.
2. Permanently doubles the small business credit for businesses paying under the service rate.
3. Changes the expiration of the sales tax on bottled water from 2015 to 2013.
4. Allows an exemption from the sales tax on bottled water for persons without potable water.
5. Makes a technical change to the banking provisions of the economic nexus provisions.
6. Removes sections related to local use tax on brokered natural gas to conform this bill with the passage of ESHB 3179 (which made the same amendments to local use tax on brokered natural gas).
7. Prohibits legislative expense allowances if the temporary sales tax increase is extended beyond June 30, 2013.

SSB 6143 now goes to the House for further consideration.