Bill Summary – FastDemocracy

ENGROSSED SUBSTITUTE SENATE BILL 5334
     State of Washington         68th Legislature     2023 Regular Session
     By Senate Local Government, Land Use & Tribal Affairs (originally
     sponsored by Senators Lovelett, Kuderer, Frame, Hasegawa, Nguyen,
     Nobles, and C. Wilson)
     READ FIRST TIME 02/10/23.
     AN ACT Relating to providing a local government option for the
 funding of essential affordable housing programs; amending RCW
 67.28.181 and 82.14.410; and adding a new section to chapter 67.28
 RCW.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
     NEW SECTION.   Sec. 1.   A new section is added to chapter 67.28
 RCW to read as follows:
     (1)(a) The legislative body of a county, city, or town is
 authorized to impose a special excise tax on the sale of or charge
 made for the furnishing of lodging of short-term rentals subject to
 tax under chapter 82.08 RCW, as provided in this section.
     (b) The tax under this section applies exclusively to the sale of
 or charge made for the furnishing of lodging of short-term rentals
 facilitated through a short-term rental platform.
     (c) The rate of tax under this section is imposed on the sale of,
 or charge made for, the furnishing of lodging of a short-term rental
 subject to tax under chapter 82.08 RCW. The rate of tax may not
 exceed 10 percent on the sale of or charge made for the furnishing of
 lodging of short-term rentals. The rate of tax under this section
 must not be imposed in increments of less than one percent.
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     (d) Any county ordinance or resolution adopted under this section
 shall contain a provision allowing a credit against the county tax
 for the full amount of any city or town tax imposed under this
 section upon the same taxable event. The legislative authority of any
 county or any city may impose the tax authorized in this section in
 the unincorporated areas of the county for the county tax and in the
 corporate limits of the city for the city tax.
     (e) A county, city, or town may develop criteria based on an
 operator's age and/or income to exempt no more than one short-term
 rental property per operator from the tax authorized under this
 section. A county, city, or town must specify exemption criteria and
 outline a certification process for the exemptions in the resolution
 when it adopts legislation imposing the tax under this section.
     (2)(a) The legislative body of a county, city, or town must adopt
 a resolution of intent to adopt legislation authorizing the tax under
 this section prior to imposing the tax under this section.
     (b) Adoption of the resolution of intent and legislation requires
 simple majority approval of the enacting legislative authority.
     (3)(a) Except as provided in (b) of this subsection, moneys
 collected from the special excise tax under this section must be used
 exclusively for the operating and capital costs of affordable housing
 programs including, but not limited to, homeless housing assistance,
 temporary shelters, and other related services. A county, city, or
 town may use revenues collected under this section for contracts,
 loans, or grants to nonprofit organizations or public housing
 authorities for services related to affordable housing programs.
     (b) A county, city, or town may retain up to five percent of the
 moneys collected under this section in each calendar year for the
 direct and indirect costs incurred in the administration of services
 and programs as provided in (a) of this subsection.
     (4) For the purposes of this section:
     (a) "Operator" has the same meaning as in RCW 64.37.010.
     (b) "Short-term rental" and "short-term rental platform" have the
 same meanings as in RCW 64.37.010.
     Sec. 2.   RCW 67.28.181 and 2015 3rd sp.s. c 24 s 703 are each
 amended to read as follows:
     (1) The legislative body of any municipality may impose an excise
 tax on the sale of or charge made for the furnishing of lodging that
 is subject to tax under chapter 82.08 RCW. The rate of tax shall not
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 exceed the lesser of two percent or a rate that, when combined with
 all other taxes imposed upon sales of lodging within the municipality
 under this chapter and chapters 36.100, ((67.40,)) 82.08, and 82.14
 RCW, equals twelve percent. A tax under this chapter shall not be
 imposed in increments smaller than tenths of a percent.
     (2) Notwithstanding subsection (1) of this section:
     (a) If a municipality was authorized to impose taxes under this
 chapter or RCW 67.40.100 or both with a total rate exceeding four
 percent before July 27, 1997, such total authorization shall continue
 through January 31, 1999, and thereafter the municipality may impose
 a tax under this section at a rate not exceeding the rate actually
 imposed by the municipality on January 31, 1999.
     (b) If a city or town, other than a municipality imposing a tax
 under (a) of this subsection, is located in a county that imposed
 taxes under this chapter with a total rate of four percent or more on
 January 1, 1997, the city or town may not impose a tax under this
 section.
     (c) If a city has a population of ((four hundred thousand))
 400,000 or more and is located in a county with a population of ((one
 million)) 1,000,000 or more, the rate of tax imposed under this
 chapter by the city shall not exceed the lesser of four percent or a
 rate that, when combined with all other taxes imposed upon sales of
 lodging in the municipality under this chapter and chapters 36.100,
 ((67.40,)) 82.08, and 82.14 RCW, equals ((fifteen)) 15 and two-tenths
 percent.
     (d) If a municipality was authorized to impose taxes under this
 chapter or RCW 67.40.100, or both, at a rate equal to six percent
 before January 1, 1998, the municipality may impose a tax under this
 section at a rate not exceeding the rate actually imposed by the
 municipality on January 1, 1998.
     (3) Any county ordinance or resolution adopted under this section
 shall contain a provision allowing a credit against the county tax
 for the full amount of any city or town tax imposed under this
 section upon the same taxable event.
     (4) In determining the effective combined rate of tax for
 purposes of the limit in subsections (1) and (2)(c) of this section,
 the tax rates under RCW 82.14.530 ((is)) and section 1 of this act
 are not included.
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     Sec. 3.    RCW 82.14.410 and 2015 3rd sp.s. c 24 s 704 are each
 amended to read as follows:
     (1) A local sales and use tax change adopted after December 1,
 2000, must provide an exemption for those sales of lodging for which,
 but for the exemption, the total sales tax rate imposed on sales of
 lodging would exceed the greater of:
     (a) Twelve percent; or
     (b) The total sales tax rate that would have applied to the sale
 of lodging if the sale were made on December 1, 2000.
     (2) For the purposes of this section:
     (a) "Local sales and use tax change" is defined as provided in
 RCW 82.14.055.
     (b) "Sale of lodging" means the sale of or charge made for the
 furnishing of lodging and all other services by a hotel, rooming
 house, tourist court, motel, trailer camp, and the granting of any
 similar license to use real property.
     (c) "Total sales tax rate" means the combined rates of all state
 and local taxes imposed under this chapter and chapters 36.100,
 67.28, ((67.40,)) and 82.08 RCW, and any other tax authorized after
 March 29, 2001, if the tax is in the nature of a sales tax collected
 from the buyer, but excluding taxes imposed under RCW 81.104.170
 before December 1, 2000, ((and)) taxes imposed under RCW 82.14.530,
 and taxes imposed under section 1 of this act.
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