Sen. Andy Hill introduced a new revenue bill yesterday(SB 6138). Three elements of the bill are in common with the most recent House revenue proposal (PSHB 2269, which we discussed here):

• Extend economic nexus to wholesaling
• Increase the B&O tax rate for royalty income from 0.484% to 1.5%
• Require local governments to provide information on subcontractors to the Dept. of Revenue

The parallel provisions in the House bill were projected to provide a revenue gain of $84.9 million in the 2015–17 biennium.

The new element in Sen. Hill’s bill involves the sales tax exemptions currently provided for machinery and equipment used either in manufacturing (RCW 82.08.0256) or in research and development in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, and environmental technology (RCW 82.63). The bill would add entities that are “engaged in the development of prewritten computer software that is not transferred to purchasers by means of tangible storage media ” to the definition of manufacturing. The bill  would also disqualify certain large software companies from using these exemptions.