2023 Revised Code of Washington › Title 82 - Excise Taxes › Chapter 82.04 - Business and Occupation Tax. › 82.04.293 - International investment management services—Definitions.

RCW 82.04.293
International investment management services—Definitions.
For purposes of RCW 82.04.290:
(1) A person is engaged in the business of providing qualifying international investment management services, if:
(a) Such person is engaged primarily in the business of providing investment management services;
(b) At least ten percent of the gross income of such person is derived from providing investment management services to any of the following:
(i) Collective investment funds commercially domiciled, as defined in RCW 82.56.010, outside the United States; or
(ii) Collective investment funds with at least ten percent of their investments located outside the United States;
(c) More than twenty-five percent of such person's employees are located in this state; and
(d) Such person is a member of an affiliated group that collectively has:
(i) Ten or more offices located in at least eight foreign countries;
(ii) At least five hundred full-time employees worldwide;
(iii) Worldwide gross revenue of more than four hundred million dollars during the entire current or immediately preceding calendar year; and
(iv) Average assets under management of more than two hundred billion dollars during the entire current or immediately preceding calendar year.
(2) An affiliate of a person engaged in the business of providing qualifying international investment management services is deemed to also be engaged in the business of providing qualifying international investment management services if the affiliate:
(a) Is primarily engaged in providing portfolio management, fund administration, fund distribution, or transfer agent services, or any combination of these activities, to, either directly or indirectly through such affiliate's affiliated group, any of the following:
(i) Collective investment funds commercially domiciled, as defined in RCW 82.56.010, outside the United States; or
(ii) Collective investment funds with at least ten percent of their investments located outside the United States; and
(b) Satisfies the requirement under subsection (1)(c) of this section.
(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a)(i) "Affiliate" and "affiliated" mean a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with another person.
(ii) For purposes of this subsection (3)(a), "control" means the possession, directly or indirectly, of more than fifty percent of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise.
(b) "Affiliated group" means any group of two or more persons that are all affiliated with each other.
(c) "Collective investment fund" includes:
(i) A mutual fund or other regulated investment company, as defined in section 851(a) of the internal revenue code of 1986, as amended;
(ii) An "investment company," as that term is used in section 3(a) of the investment company act of 1940, as well as any entity that would be an investment company for this purpose but for the exemptions contained in section 3(c) (1) or (11);
(iii) An "employee benefit plan," which includes any plan, trust, commingled employee benefit trust, or custodial arrangement that is subject to the employee retirement income security act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq., or that is described in sections 125, 401, 403, 408, 457, and 501(c)(9) and (17) through (23) of the internal revenue code of 1986, as amended, or a similar plan maintained by a state or local government, or a plan, trust, or custodial arrangement established to self-insure benefits required by federal, state, or local law;
(iv) A fund maintained by a tax-exempt organization, as defined in section 501(c)(3) of the internal revenue code of 1986, as amended, for operating, quasi-endowment, or endowment purposes;
(v) Funds that are established for the benefit of such tax-exempt organizations, such as charitable remainder trusts, charitable lead trusts, charitable annuity trusts, or other similar trusts; or
(vi) Collective investment funds similar to those described in (c)(i) through (v) of this subsection (3) created under the laws of a foreign jurisdiction.
(d) "Investment management services" means managing the collective assets of a collective investment fund by engaging, either directly or indirectly through such person's affiliated group, in all of the following activities: (i) Portfolio management; (ii) fund administration; (iii) fund distribution; and (iv) transfer agent services.
(4) Investments are located outside the United States if the underlying assets in which the investment constitutes a beneficial interest reside or are created, issued or held outside the United States.
(5) If a person engaged in the business of providing international investment management services no longer meets the Washington state employment eligibility requirements under subsection (1)(c) of this section, then an amount equal to the entire economic benefit accruing to the person in the current and immediately prior nine consecutive calendar years, or the consecutive years since July 1, 2019, whichever is less, as a result of the preferential tax rate under RCW 82.04.290(1) is immediately due and payable.
(6) The department must assess interest, but not penalties, on the amounts due under this section. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW and accrue until the taxes for which a tax preference has been used are repaid.
[ 2019 c 426 § 3; 1997 c 7 § 3; 1995 c 229 § 1.]
NOTES:
Findings—Intent—Automatic expiration date and tax preference performance statement exemption—Effective date—2019 c 426 §§ 2 and 3: See notes following RCW 82.04.290.
Savings—Effective date—1997 c 7: See notes following RCW 82.04.255.
Effective date—1995 c 229: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995." [ 1995 c 229 § 4.]