Bill
SB 5088
Allows counties to impose up to a 3% excise tax on utilities’ gross income within the county, with credits for city taxes and itemized bills to customers.
SB 5088 — Summary
Overview
- Purpose: Authorize counties to impose a local public utility tax (excise tax on the privilege of engaging in the utility business) and codify a new county-level framework for such taxes.
- Status: First reading; referred to Local Government. Prefiled December 19, 2024. Read first time January 13, 2025.
- Effective framework: Creates a new chapter in Title 82 RCW (to be codified as Chapter 82.16A RCW).
What the bill would do
- County authority: Allows any county’s legislative authority to impose an excise tax on the privilege of providing utility services to consumers within the county.
- Tax base: Tax equals the utility’s gross income derived from serving consumers in the county, multiplied by the county’s chosen rate (up to 3%).
- Tax passage timing: An initial imposition may begin on the first day of a calendar quarter and no earlier than 75 days after the county adopts the imposing ordinance or resolution.
- Billing and transparency: Utilities subject to the tax must add the tax to rates or charges and separately state the tax amount on customer bills.
- Exemptions for business customers: Counties may exempt sales by utilities to certain business customers (e.g., manufacturing facilities, aircraft repair facilities, industrial parks/facilities, farm businesses, computer data centers). A general exemption for residential customers is not allowed unless business customers are also exempt.
- Credit for other jurisdictions: Counties must provide a credit against the county tax for any amount of a similar utility tax imposed by a city or town on the same taxable event, limited to the amount due.
Definitions and scope (Chapter 82.16A RCW)
- Utilities covered: Electrical power, gas, sewer, water, solid waste, telephone, cable service, and any other defined “utility” under the new chapter.
- Relevant terms: The bill uses existing RCW definitions for “gross income,” “utility,” and specific utility types (e.g., electrical power utility, gas utility, water utility, etc.).
- New chapter: Sections 1–3 establish the new authority, base, exemptions, and credit provisions, codified as Chapter 82.16A RCW.
Who is affected
- County governments: authority to impose up to a 3% excise tax on utility gross income within their borders.
- Utility providers: subject to the tax, must collect and itemize the tax on customer bills.
- Businesses and residential customers: potential exemptions (for qualifying business customers); residential customers may be affected if no exemptions apply.
- Cities/towns: credits to avoid double taxation with interconnected municipal taxes.
Key procedural/timeline notes
- Introduction: December 19, 2024; first reading January 13, 2025.
- Implementation: Tax may start only on the first day of a calendar quarter and not sooner than 75 days after adopting the imposing ordinance/resolution.
Impact considerations
- Revenue for counties: New ARPA-like local revenue stream, subject to a 3% cap.
- Tax interoperability: Credit mechanism aims to prevent double taxation with municipal taxes.
- Administrative burden: Utilities must clearly display the tax on bills; counties must administer exemptions and credits per the statute.
Compiled from official sources — confirm details with the bill’s official record.
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