STATE OF WASHINGTON

HOUSE OF REPRESENTATIVES
65th Legislature – 2017 2nd Special Session

1 AN ACT Relating to establishing a universal charitable credit; adding a new section to
2 RCW chapter 43; and adding a new section to RCW chapter 82.

3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

4 NEW SECTION. Sec 1. Chapter 43 of the General Laws is hereby amended by creating
5 section 43.363, and adding the following new subsections: -

6 43.363.000 Washington Universal Charitable Credit

7 43.363.005 Findings – Intent.

8 (1) The legislature finds:

9 (a) Taxpayers engaged in determining where their tax dollars are spent increase
10 the effectiveness and efficiency of services provided to the public.

11 (b) Providing a universal charitable credit will empower taxpayers to direct a
12 portion of their tax liability to “qualified charitable organizations.”

13 (2) It is the intent of the legislature to establish a program to:

14 (a) create a universal charitable credit to permit taxpayers to direct a portion of
15 their state and local government tax liability to “qualified charitable
16 organizations” resulting in significant financial and civic benefits for our state.

17 (b) acquire and make available to the public a list of charitable organizations
18 incorporated in the State of Washington and designated exempt from federal
19 taxation under section 501(c)(3) of the Internal Revenue Code;

20 43.363.010 Definitions.

21 The definitions in this section apply throughout this chapter unless the context clearly requires
22 otherwise.

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STATE OF WASHINGTON

HOUSE OF REPRESENTATIVES
65th Legislature – 2017 2nd Special Session

1 (1) "Qualified charitable organizations" means charitable organizations that are:

2 (a) exempt from federal income taxation under section 501(c)(3) of the internal
3 revenue code, incorporated in the State of Washington, in good standing with
4 the Washington Department of Revenue, and

5 (b) not under suspension per section 501(p) of the internal revenue code, or
6 revocation per the Internal Revenue Bulletin at the time of the contribution.

7 (2) "Department" means the department of revenue.

8 (3) "Director" means the director of the department.

9 (4) "Local government" means a city, code city, or town.

10 43.363.020 Program created—Duties.

11 The Washington universal charitable credit program is created within the department. In order
12 to implement the Washington universal charitable credit program, the department shall adopt
13 criteria such that:

14 (1) Notwithstanding limitations of RCW 82.04.4451, a credit shall be allowed by the
15 taxpayer against the tax liability imposed by RCS 82.04 and 82.16, for voluntary cash
16 contributions by the taxpayer or on the taxpayer's behalf during the taxable year to
17 qualified charitable organizations not to exceed:

18 (a) Five hundred dollars in any taxable year for a taxpayer who files as: single
19 individual, head of household or married filing separately, or

20 (b) One thousand dollars in any taxable year for a married couple filing a joint
21 return, or

22 (c) Five thousand dollars in any taxable year for a business.

23 (2) The credit allowed by this section is in lieu of a deduction pursuant to section 170 of

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STATE OF WASHINGTON

HOUSE OF REPRESENTATIVES
65th Legislature – 2017 2nd Special Session

1 the internal revenue code and taken for state tax purposes.

2 (3) Taxpayers taking a credit authorized by this section shall provide the names of the
3 qualified charitable organizations along with the amount and date of the cash
4 contributions to the department of revenue on forms provided by the department.

5 (4) Taxpayers choosing to make voluntary cash contributions through an umbrella
6 charitable organization that collects donations on behalf of member charities shall
7 designate that the donations be directed only to member charitable organizations that
8 would qualify under this section on a stand-alone basis.

9 (5) The allowable credit shall be applied against the qualified tax liability for the year in
10 which it is claimed, but shall not exceed the total liability of the taxpayer for that year,
11 be carried back or refunded.

12 (6) Local governments are not prohibited from establishing a universal charitable credit
13 related to local taxes.

14 (7) The director shall provide the governor, legislature, and local governments with an
15 annual accounting of the distribution of funds under this program, and make the report
16 publicly available.
17 43.363.030 Designation of qualifying charitable organization—Criteria.
18 The department of revenue shall compile and make available to the public a list of qualified
19 charitable organizations that are exempt from federal income taxation under 26 U.S.C. Sec.
20 501(c)(3) of the internal revenue code, and incorporated in the State of Washington at the time
21 of the contribution.
22 43.363.040 Applicability.
23 This act applies retroactively to taxable years beginning from and after December 31, 2016.

24 NEW SECTION. Sec 2. Chapter 82 of the General Laws is hereby amended by creating section

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STATE OF WASHINGTON

HOUSE OF REPRESENTATIVES
65th Legislature – 2017 2nd Special Session

1 82.76, and adding the following new subsections: -

2 82.76 Washington Universal Charitable Credit Program

3 82.76.010 Definitions.
4 Unless the context clearly requires otherwise, the definitions in this section apply
5 throughout this chapter.
6 (1) "Applicant" means a person applying for a tax credit under this chapter.
7 (2) "Contribution" means cash contributions made by, or on behalf of the applicant.
8 (3) "Department" means the department of revenue.
9 (4) "Director" means the director of the department.
10 (5) "universal charitable credit" means the Washington universal charitable credit
11 established under RCW 43.363.
12 (6) "Person" has the meaning given in RCW 82.04.030.
13 (7) "Qualified charitable organization" means a nonprofit organization that is exempt from
14 federal income taxation under 26 U.S.C. Sec. 501(c)(3) of the internal revenue code that
15 is recognized by the department of revenue authorized under RCW 43.363.
16 82.76.020 Application for credit.
17 (1) Application for credits under this chapter must be made to the department in a form
18 and manner prescribed by the department, and shall provide the names of each qualifying
19 charitable organization and the amount of the contributions to the department of revenue on
20 forms provided by the department.
21 (2) The applicant must make the contribution described in the approved application by the
22 end of the calendar year for which a credit is claimed under RCW 82.76.030.
23 82.76.030 Credit authorized—Limitations.
24 (1) Subject to the limitations in this chapter, a credit is allowed against the tax imposed
25 by chapters 82.04 and 82.16 RCW for approved contributions made to qualified

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STATE OF WASHINGTON

HOUSE OF REPRESENTATIVES
65th Legislature – 2017 2nd Special Session

1 charitable organizations as defined under RCW 43.363.

2 (2) The credit allowed under this section is limited to an amount not to exceed the
3 actual tax liability or the following, whichever is less:

4 (a) Five hundred dollars in any taxable year for a taxpayer who files as: single
5 individual, head of household or married filing separately, or
6 (b) One thousand dollars in any taxable year for a married couple filing a joint
7 return.
8 (3) The director shall keep a running total of, and make available to the governor,
9 legislature and public, all credits approved under this chapter for each calendar year.
10 (4) The credit may be claimed against any tax due under chapters 82.04 and 82.16 RCW
11 only in the calendar year immediately following the calendar year for which the credit
12 was approved by the department and the contribution was made to qualified charitable
13 organization.
14 (5) Credits may not be carried over to subsequent years.
15 (6) No refunds may be granted for credits under this chapter.
16 82.76.040 Filing requirements. To claim a credit under this chapter, the applicant must file
17 with the department all returns, forms, and other information the department requires in a
18 format as provided or approved by the department. Any return, form, or information required
19 to be filed under this section is not filed until received by the department. As used in this
20 section, "returns" has the same meaning as "return" in RCW 82.32.050.
21 82.76.050 Application of chapter 82.32 RCW.
22 Chapter 82.32 RCW applies to the administration of this chapter.
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