This bill seeks to reform tax preferences in Washington State, particularly those related to machinery and equipment used in manufacturing, research and development, and testing operations. It highlights the need for periodic reviews of the 786 existing tax exemptions, many of which have not been updated for years and primarily benefit private interests. Key amendments include the introduction of a new section that calls for tax policy reform and the removal of certain tax preferences to enhance revenue for the state's general fund. Notably, the bill addresses exemptions for gas distribution businesses claiming tax exemptions for machinery and equipment used in producing compressed natural gas or liquefied natural gas for transportation fuel, with a contingent expiration date set for July 1, 2027.

Additionally, the bill amends tax laws concerning the use of natural gas, compressed natural gas, and liquefied natural gas for transportation fuel by introducing a temporary exemption from the use tax until July 1, 2027. It also clarifies that sales of these gases by gas distribution businesses are exempt from sales tax under specific conditions. The bill outlines expiration dates for certain provisions, stating that part VII will expire on July 1, 2027, unless certain repayment conditions are met, which could lead to an earlier expiration on January 1, 2024. The Department of Revenue is tasked with notifying affected parties of these expiration dates, and the joint legislative audit and review committee is relieved from performing evaluations if the earlier expiration occurs. Overall, the bill aims to promote the use of natural gas as a cleaner transportation fuel through these tax incentives.

Statutes affected:
Original bill: 82.08.02565, 82.12.02565, 82.12.022, 82.14.230, 82.16.310