Below are rule and interpretive statement actions. For information regarding how these rules and interpretive statements may affect you, email us or call 1-800-647-7706.
Also, see more information regarding the Department's rule making process, including rule making currently in progress and how to participate.
Pursuant to
RCW 34.05.330, you have the right to petition the Department to adopt, amend, or repeal any administrative rule. Obtain a
copy of the petition online, or call call 1-800-647-7706. The petition process is governed by the Office of Financial Management (
Chapter 82-05 WAC).
NOTE:
> Click on a month below to see what actions took place during that month.
> Click on an action (link) to see details of that action.
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Rules:
WAC - Washington Administrative Code
Interpretive Statements:
ETA - Excise Tax Advisory
PTA - Property Tax Advisory
IAG - Interim Audit Guideline |
- Multiple REET Rules (WAC 458-61A-105, 202, 205, 206, 207, 210, 213, 215, 301, 303, 304)
- International Investment Management Services (ETA 3183.2014)
- Grain Elevators (ETA 3188.2014)
January 2015
WAC 458-20-179 Public utility tax explains the public utility tax (PUT) imposed by chapter 82.16 RCW. The PUT is a tax for engaging in certain public service and transportation businesses within the state. The Department is amending Rule 179 to include language that explains the PUT exemption for income from sales by a gas distribution business of natural gas, compressed natural gas, and liquefied natural gas used for transportation purposes. This exemption is from legislation ESSB
6440 (chapter 216, Laws of 2014) and is not effective until July 1, 2015.
ETA 3194.2015 Impact of Getty Images Decision explains that the Washington State Court of Appeals, Division 1, decision in Getty Images (Seattle), Inc. v. City of Seattle, 163 Wn. App. 590, 260 P.3d 926 (2011)does not represent a major departure from established law in the context of affiliate transactions. Getty Images addresses the taxability of amounts received by a parent company from affiliates to pay costs for providing administrative and management services to those affiliates.
WAC 458-20-19401 Minimum nexus thresholds for apportionable activities, WAC 458-20-19402 Single factor receipts apportionment – Generally, WAC 458-20-19403 Apportionable royalty receipts attribution, WAC 458-20-19404 Financial institutions – Income apportionment and WAC 458-20-19405 CPI-U adjustments to minimum nexus thresholds for apportionable activities
The amendments to these rules:
- Repeal Rule 19405 and put this language into a new Excise Tax Advisory (ETA);
- Delete multiple references to Rule 19405 in Rules 19401 through 19404; and
- Recognize provisions of SSB 6333, Sec. 305 (chapter 97, Laws of 2014) in Rules 19402 and 19403.
WAC 458-20-268 Annual surveys for certain tax adjustments is amended to recognize provisions of ESSB 5882
(Chapter 13, Laws of 2013); and SSB 6333 (Chapter 97, Laws of 2014). Please see attachment for a description of the
changes to the existing rule.
WAC 458-20-17902 Brokered natural gas - Use tax to:
Recognize provisions of ESSB 6440, Sec. 301, 304, and 305 (Chapter 216, Laws of 2014);
Update language on filing and paying use tax on brokered natural gas electronically either monthly or quarterly; and
Clarify language changing “section” to “rule” throughout.
WAC 458-30-200 Definitions WAC 458-30-210 Classification of land under chapter 84.34 RCW provide definitions used in the administration of chapter 458-30 WAC. Amending WAC 458-30-200 will clarify and update definitions the Department and county assessor offices use when administering the current use program under chapter 84.34 RCW. Additionally, the Department believes that the definitions found in WAC 458-30-210 can be incorporated into the definitions in WAC 458-30-200 to improve the entire chapter. WAC 458-30-210 can then be repealed.
WAC 458-14-056 Petitions - Time limits - Waiver of filing deadline for good cause incorporates SSB 6333 (2014), which added language to RCW 84.40.038 regarding electronic
transmission of value change notices or other notices; and updated an example.
WAC 458-19-005 Definitions incorporates SSB 6333 (2014), which clarifies the date in September that the implicit price deflator is
published by the federal department of commerce; SHB 1634 (2014), which allows a taxing district’s levy limit to be
increased due to solar, biomass, and geothermal facilities producing electricity; EHB 1969 (2011), which allows a Flood
Control Zone District in certain counties to protect a portion of its levy rate outside of the $5.90 limitation; 2SSB 5433
(2009), which protects the levy rate for county transit-related purposes from prorationing under the $5.90 limitation; SSB
6141 (2006), which allows a taxing district’s levy limit to be increased due to wind turbines that generate electricity;
clarifies which levy rate to use in the levy limit calculation if the rate is reduced due to prorating or if the rate reflects an
error; and incorporates statutory language to various definitions.
WAC 458-19-020 Levy limit - Method of calculation incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-19-025 Restoration of regular levy incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-19-030 Levy limit - Consolidation of districts incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-19-035 Levy limit - Annexation incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; SSB 6141 (2006), which allows a taxing district’s levy limit to be
increased due to wind turbines that generate electricity; clarifies how to calculate the levy rate when an annexation occurs;
updated established boundary date; and updated an example.
WAC 458-19-060 Emergency medical services levy incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-19-065 Levy limit - Protection of future levy capacity incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; SSB 6141 (2006), which allows a taxing district’s levy limit to be
increased due to wind turbines that generate electricity; and updated an example.
WAC 458-19-085 Refunds - Procedures - Applicable limits incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-19-550 State levy - Apportionment between counties incorporates SHB 1634 (2014), which allows a taxing district’s levy limit to be increased due to solar,
biomass, and geothermal facilities producing electricity; and SSB 6141 (2006), which allows a taxing district’s levy limit
to be increased due to wind turbines that generate electricity.
WAC 458-30-232 Application for timber land classification incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program. Updated rule by adding statutory language from RCW 84.34.041 and added language from WAC 458-30-240 and WAC 458-30-250.
WAC 458-30-240 Agreement relating to open space and timber land classifications incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program.
WAC 458-30-275 Continuing classification upon sale or transfer of ownership of classified land - Actions of landowner and county officials to be taken prior to recording a conveyance of classified land incorporates 2ESHB 1117 (2014), which allows classified land to be transferred without the signing of a notice of classification continuance if it is a transfer by a transfer on death deed; E2SHB 1597 (2010), which allows classified land to be subject to the same gross income requirements applicable before death if classified farm and agricultural land is transferred to a surviving state registered domestic partner; and EHB 1815 (2009), which allows a minimum investment requirement for land at least five but less than twenty acres that contains a standing crop. Updated rule to reflect existing language in RCW 84.34.020, RCW 84.34.041, RCW 84.34.080, and RCW 84.34.108. Updated examples, deleted outdated references, and clarified various subsections.
WAC 458-30-280 Notice to withdraw from classification incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program. Updated rule by adding statutory language from RCW 84.34.070.
WAC 458-30-285 Withdrawal from classification incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program. Updated rule by adding statutory language from RCW 84.34.070 and RCW 84.34.108, and also updated examples.
WAC 458-30-295 Removal of classification incorporates 2ESHB 1117 (2014), which allows classified land to be transferred without the signing of a notice of classification continuance if it is a transfer by a transfer on death deed; and SSB 6333 (2014), which added language to RCW 84.40.038 regarding electronic transmission of value change notices or other notices. Updated rule by adding language from RCW 84.34.108, WAC 458-30-270, WAC 458-30-275, and WAC 458-30-285; and clarified various subsections.
WAC 458-30-300 Additional tax - Withdrawal or removal from classification incorporates 2ESHB 1117 (2014), which allows classified land to be transferred without the signing of a notice of classification continuance if it is a transfer by a transfer on death deed; SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program; and HB 1277 (2013), which allows Federally recognized Indian tribes to acquire classified land for conservation purposes without payment of additional tax, interest, and penalty. Updated rule using language from RCW 84.34.108, RCW 84.33.145, WAC 458-30-245, WAC 458-30-275, and WAC 458-30-295 to clarify removal process, and added an example.
WAC 458-30-325 Transfer between classifications - Application for reclassification incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program. Deleted outdated language and reference, added an example, and updated an example; and updated rule using language from RCW 84.34.030 and RCW 84.33.145.
WAC 458-30-500 Definitions of terms used in WAC 458-30-500 through 458-30-590 incorporates 2SHB 1416 (2013), which removed irrigation districts from the definition of “local government;” and deleted definitions that are already defined in a prior section.
WAC 458-30-520 Notification of district - Certification by assessor - Estimate by district incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program; added clarifying language from RCW 84.34.030, RCW 84.34.035, and RCW 84.34.041; and deleted language that conflicts with statute.
WAC 458-30-550 Exemption - Removal or withdrawal incorporates SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program.
WAC 458-30-700 Designated forest land - Removal - Change in status - Compensating tax incorporates 2ESHB 1117 (2014), which allows classified land to be transferred without the signing of a notice of classification continuance if it is a transfer by a transfer on death deed; SB 6180 (2014), which allows counties to merge its timber land classification and its designated forest land program; SSB 6333 (2014), which added language to RCW 84.40.038 regarding electronic transmission of value change notices or other notices and also clarified that treasurers mail out the notice of the amount of compensating tax due; HB 1277 (2013), which allows Federally recognized Indian tribes to acquire designated forest land for conservation purposes without payment of compensating tax; 2SSB 5367 (2013), which allows community forest trust lands to be removed from designation without compensating tax if acquired by certain entities; ESHB 2502 (2012), which allows forest land to be removed from designation if transferred to certain entities for conservation purposes in a county with a population of at least 245,000 that borders Puget Sound; SHB 1733 (2009), which allowed forest land to be removed without compensating tax if the assessor discovered the forest land was designated in error through no fault of the owner; updated removal dates, chart, and language to be consistent with RCW 84.33.140, RCW 84.33.220, and existing language in WAC 458-30-700, added an example, and deleted an outdated reference.
WAC 458-20-261 Commute trip reduction incentive amended to recognize provisions of ESSB 6001 (Chapter 222, Laws of 2014); and SSB 6333 (Chapter 97, Laws of 2014). The changes to this rule explain that:
- Vehicles must be “primarily” used for commuter ride sharing (subsection (3)(b));
- If the program is not extended after June 30, 2015 that commute trip reduction incentive payments paid by employers and
- property managers from January 1, 2015 through June 30, 2015 will not accrue commute trip reduction credits (subsection (4)(h));
- Deleting dated language relating to periods prior to a statutory change effective June 30, 2005; and
- Clarifying language in an example that there is a maximum credit limit of $60 per employee (subsection ((k)(iii)).
December 2014
WAC 458-61A-202 Inheritance or devise; WAC 458-61A-303 Affidavit
WAC 458-61A-202 (REET Rule 202) explains the exemption from Real Estate Excise Tax (REET) for inheritance transfers. WAC 458-61A-303 (REET Rule 303) explains the REET affidavit requirements. Second Engrossed Substitute House Bill 1117 (ESHB 1117), effective on June 12, 2014, provided a new REET exemption for transfers pursuant to a transfer on death deed and substantiation requirements to claim that exemption, as well as a change to the affidavit requirements for transfer on death deed transfers. REET Rules 202 and 303 are amended to reflect this new exemption and accompanying substantiation and affidavit requirements for transfers pursuant to transfer on death deeds. This is the permanent rule filing by the Department for these rules that replace the emergency rules filed previously.
WAC 458-20-178 Use Tax explains who is responsible for remitting use tax, and when and how to remit the tax. Rule 178 has been revised to delete verbiage in subsection (6) that is inaccurate because the example is no longer valid. Chapter 13 Laws of 2013 2nd Special Session made the example invalid when it created a use tax exemption for items less than ten thousand dollars, purchased …, from a nonprofit organization or a library. While this specific exemption is scheduled to expire July 1, 2017, the example in subsection (6) could still be misleading and thus it has been removed.
WAC 458-18-220 Refunds-Rate of Interest provides the rate of interest that applies to tax refunds made pursuant to RCW 84.69.010 through 84.69.090 in accordance with RCW 84.69.100, and also to judgments entered in favor of the plaintiff pursuant to RCW 84.68.030. This rule has been amended to provide the rate of interest to be used when refunding property taxes paid in 2014.
WAC 458-30-262 Agricultural Land Valuation-Interest Rate-Property Tax Component provides the interest rate and the property tax component used to value farm and agricultural lands classified under chapter 84.34 RCW (Open Space Program). This rule has been amended to provide the interest rate and property tax component to be used when valuing classified farm and agricultural land during the 2014 assessment year.
WAC 458-30-590 Rate of Inflation-Publication-Interest Rate-Calculation provides the rate of inflation used to calculate interest on deferred special benefit assessments when farm and agricultural or timber land is removed or withdrawn from classification under chapter 84.34 RCW (Open Space Program). This rule has been amended to provide the rate of inflation used in calculating interest for deferred special benefit assessments of land removed or withdrawn during 2014.
WAC 458-20-241 Radio and Television Broadcasting The Department amended Rule 241 to recognize that the FCC no longer publishes the information used to determine the standard deduction. Therefore, the standard deduction is no longer an option. Broadcasters must itemize their advertising revenue.
WAC 458-20-185 Tax on Tobacco Products
WAC 458-20-186 Tax on Cigarettes
The Department is amending Rules 185 and 186 to provide updates based on legislation addressing changes in tax rates for cigarette and tobacco products, roll-your-own cigarettes, wholesale and retail vendor licensing requirements. Guidance on the manner in which cigarette stamps must be affixed is also amended. The refund procedures have been clarified. Rule 186 has been formatted in the same way as Rule 185.
WAC 458-276 Access to Public Records Chapter The Department is amending five rules, two of which were recodified, and repealing ten rules in chapter 458-276 WAC, titled: “Access to Public Records”. These rules consolidate the Department’s explanation of the Public Records Act, chapter 42.56 RCW, and establish procedures the Department of Revenue follows to provide access to public records. These rules provide information and establish processes for requesting and obtaining access to public records. These rules also explain statutory exemptions from disclosure.
WAC 458-20-177 Sales of Motor Vehicles, Campers, and Trailers to Nonresident Consumers The Department is amending Rule 177 to remove the requirement for sellers to obtain a corporate nonresident permit number and the obligation that buyers obtain such a permit. New verbiage has been added covering purchases by nonresident corporations separate from the natural person verbiage. The references to chapter 46.16 RCW have been updated to chapter 46.16A RCW. Additional updating and removal of outdated language has been done.
WAC 458-40-540 Forest Land Values-2015 WAC 458-40-540 contains the forest land values used by county assessors for property tax purposes. This rule is being revised to provide the forest land values to be used in 2015.
WAC 458-40-660 Timber Excise Tax-Stumpage Value Tables-Stumpage Value Adjustments WAC 458-40-660 contains the stumpage values used by harvesters of timber to calculate the timber excise tax. This rule is being revised to provide the stumpage values to be used during the first half of 2015.
WAC 458-20-244 Food and Food Ingredients Provides guidelines for determining if food or food ingredients qualify for the retail sales tax and use tax exemptions under RCW 82.08.0293 and 82.12.0293.
Rule 244 has been revised to
- Include verbiage that marijuana is not included as food or food ingredients and thus retail sales of this item does not qualify for sales or use tax exemptions per Chapter 40, Laws of 2014 (SB 6505);
- References to other rules have had titles updated as needed (subsection (1)(b)); and
- Subsection (3)(e)(iii) that pertained to when candy was taxable has been deleted as no long applicable.
WAC 458-20-209 Farming for Hire and Horticultural Services Performed for Farmers has been revised to:
Include verbiage that marijuana is not included in the definition of an “agricultural product” (subsection (2)(b));
Include verbiage that services related to the cultivation of marijuana is not included in the definition of “horticultural services” (subsection (2)(c)); and
Simplify verbiage pertaining to reseller permits in subsection (5)(c).
WAC 458-20-210 Sales of Tangible Personal Property for Farming-Sales of Agricultural Products by Farmers has been revised to:
Include verbiage that marijuana is not included in the definition of an “agricultural product” (subsection (3));
State that for the purpose of this rule the definition of “seed” does not include seeds or propagative portions of plants used to grow marijuana (subsection (5)((c)(ii));
State that for the purpose of this rule marijuana is not fruits and vegetables (subsection (6)(b)(i));
State the exemption for persons manufacturing dairy products does not apply to any marijuana products (subsection (6)(b)(ii));
Explain tangible personal property used for the production of marijuana do not qualify for sales and use tax exemptions when sold at auction (subsection (7)(e)); and
Delete the requirement for an exemption certificate for purchases of nutrient management equipment, and labor and services pertaining to equipment and facilities (subsection (7)(n)(v)(C)).
WAC 458-20-136 Manufacturing, Processing for Hire, Fabricating is amended to recognize provisions of SB 6505 (chapter 140, Laws of 2014); and ESSB 6440 (chapter 216, Laws of 2014).
WAC 458-20-13601Manufacturers and Processors for Hire-Sales and Use Tax Exemption for Machinery and Equipment is amended to recognize provisions of SB 6505 (chapter 140, Laws of 2014); and ESSB 6440 (chapter 216, Laws of 2014).
November 2014
WAC 458-20-135 Extracting Natural Products is amended to add new language from SB 6505 (Chapter 140, Laws of 2014) regarding persons producing marijuana and adds clarifying and updated language regarding wholesale sales. Rule 135 is amended at:
- Subsection (2)(a) by adding the language: “; or (iii) Persons producing marijuana.”; and
- Subsection (3) by adding new language clarifying and updating the procedures extractors making wholesale sales must follow regarding resale certificates for sales made before January 1. 2010, or reseller permits for sales made on or after January 1, 2010, obtained from buyers to document the wholesale nature of the transaction.
PTA 17.0.2014 Valuation of Community Land Trust (Resale Restricted) Properties. This PTA addresses the valuation of Community Land Trust (CLT) properties. CLT properties are residential single family homes that provide affordable owner-occupied housing to qualifying owners. In order to provide owner-occupied home ownership possibilities to qualifying purchasers, Community Land Trusts (CLTs) purchase the land and then lease the land underlying the home at a minimal cost and restrict the deed upon resale, thus limiting the equity to the original owner when the home is resold to another qualifying purchaser. CLT properties are not available to anyone on the open market due to the deed restrictions that impact their market value. Because the physical characteristics of these properties are indistinguishable from conventional residential properties, assessors may be tempted to assess them similarly. County assessors should recognize the impact on assessed values of CLT properties resulting from the deed restrictions.
ETA 3054.2014 (ETA 3054) Sales to nonresidents of states of possessions of the US, and territories or provinces of Canada, that do not impose a tax of at least three percent. This ETA explains the retail sales tax exemption provided by RCW 82.08.0273 to qualified nonresidents of Washington when purchasing tangible personal property, digital goods, and digital codes, for use outside of Washington. The Department has updated the ETA to recognize provisions of Senate Bill 6505, chapter 140, Laws of 2014. This legislation specifically excludes sales of marijuana from the exemption. Marijuana is any product with a THC concentration greater than .03 percent.
In 2011, this ETA was previously updated to explain that the exemption is available only to residents of states other than Washington, United States possessions, or Canadian territories or provinces that do not impose or have imposed on its behalf, a generally applicable retail sales tax, use tax, value added tax, gross receipts tax on retailing activities, or similar generally applicable tax of three percent or more.
ETA 3193.2014 (ETA 3193) Sourcing dark fiber sales. This ETA provides business and occupation (B&O) tax and retail sales and use tax guidance for the sourcing and apportionment of receipts from the sale of “dark fiber” used in telecommunications, including an example.
October 2014
WAC 458-20-217 Lien for taxes. This rule explaining “Lien for taxes” is amended to recognize:
- 2ESSB 6143, Part VIII (chapter 23, Laws of 2010), which changed personal liability provisions for collected, but unremitted, retail sales and spirits taxes;
- HB 2758 (chapter 39, Laws of 2012) that amended RCW 82.32.145 to clarify that all spirits taxes under RCW 82.08.150 are trust fund taxes that subject certain responsible individuals to personal liability for such taxes and related penalties and interest; and
- HB 1239 (chapter 131, Laws of 2011) that provides in lieu of filing a tax warrant with a superior court, the department may in some circumstances issue a notice in lien against any real property in which the taxpayer has any ownership interest.
WAC 458-12-165 Listing of property - Public lands - Purchase by state, county or city. This rule about listing property, public lands, and purchases by state, county, or city incorporated language from repealed statute RCW 84.60.060. The department is deleting this outdated language from the rule.
WAC 458-20-17802 (Rule 17802) Collection of use tax by county auditors and department of licensing – Measure of tax. The Department of Revenue authorizes county auditors and the Department of Licensing to collect the use tax when a person applies to transfer a certificate of title of a vehicle under the authority of RCW 82.12.045. This rule explains how county auditors, their subagents, and the Department of Licensing determine the measure of the use tax.
The Department of Licensing has an automated system that provides a vehicle’s average retail value to help determine the measure of use tax due at the time of transfer. Previously if the vehicle’s average retail value, as provided by the system, was less than $3,000 the purchase price was presumed to represent the vehicle’s true value. The rule has been revised to raise the threshold of $3,000 to $5,000. Other general updating has also been completed.
(ETA 3192.2014) Professional Employer Organizations
This ETA explains when a professional employer organization (PEO) providing employer services is eligible for a business and occupation tax deduction from gross income for qualifying costs paid to or on behalf of covered employees under RCW 82.04.540 and includes examples.
WAC 458-12-010
This rule incorrectly cited to WAC 458-12-080 and 458-12-080(2). The department corrected these citation to WAC 458-12-060 and 458-12-060(4), respectively.
WAC 458-61A-202 (REET Rule 202), WAC 458-61A-303 (REET Rule 303)
WAC 458-61A-202 (REET Rule 202) explains the exemption from Real Estate Excise Tax (REET) for inheritance transfers. WAC 458-61A-303 (REET Rule 303) explains the REET affidavit requirements. Second Engrossed Substitute House Bill 1117 (ESHB 1117), effective on June 12, 2014, provides a new REET exemption for transfers pursuant to a transfer on death deed and substantiation requirements to claim that exemption, as well as a change to the affidavit requirements for transfer on death deed transfers. REET Rules 202 and 303 are amended again to reflect this new exemption and accompanying substantiation and affidavit requirements for transfers pursuant to transfer on death deeds. This is the second emergency rule filing for these rules while the Department works on permanent rules, which can be found on the Rules Agenda.
September 2014
ETA 3188.2014 (1st Revision) Grain Elevator
Excise Tax Advisory (ETA) 3188 explains the proper rate of tax remittance when a grain elevator is expanded pursuant to RCW 82.08.820. Initially issued on February 19, 2014, ETA 3188 is being amended to delete language in the ETA providing guidance on the Department’s interpretation of what a grain elevator “structure” is for purposes of RCW 82.08.820. The language is being eliminated because the Department has reconsidered its interpretation in the matter and determined that prior the interpretation was too narrow.
WAC 458-20-267 Annual Reports for Certain Tax Adjustments
WAC 458-20-267, titled: “Annual reports for certain tax adjustments” (Rule 267) is amended at the introduction in section (1) of the rule by changing the phrase “aerospace manufacturing” for clarity to “aerospace industry” and adding the phrase “government funded mental health services.” Rule 267 is also amended to add the government funded mental health services tax preference to the annual report requirement. Further, section (3) of the rule is amended to update the filing requirements and correct caption grammatical errors. Last, subsection (4)(b)(ii)(B) is amended to update the department’s contact address to obtain written approval to consolidate manufacturing sites.
ETA 3182.2013 Trade Shows, Conventions, and Educational Seminars Sponsored by Nonprofit Trade and Professional Organizations
This ETA explained when a trade show, convention, or educational seminar is considered open to the general public for purposes of the business and occupation (B&O) tax deduction in RCW 82.04.4282 (Deductions - Fees, dues, charges). The Department and stakeholders have reexamined the need for this ETA and agree that existing WAC 458-20-256 is sufficiently clear and the additional explanation contained in the ETA is not needed and has therefore cancelled ETA 3182.2013. This action does not represent a change to the Department’s understanding or interpretation of the current statutory requirements to qualify for the deduction.
ETA 3191.2014 Rewards Programs-Retail Sales Tax
This ETA explains the application of “sales price” to selected types of rewards program awards for retail sales tax purposes under RCW 82.08.010. The ETA provides guidance and examples clarifying: (1) when awards must be included in the sales price of a customer’s purchase, or (2) when the awards represent a discount excluded from sales price.
August 2014
WAC 458-20-168 Hospitals, nursing homes, assisted living facilities, adult family homes, and similar health care facilities.
WAC 458-20-168 (Rule 168). This rule explains the B&O, retail sales, and use tax responsibilities of persons operating hospitals, nursing homes, and similar health care facilities.
Rule 168 has been revised to include legislative changes, the repeal of the quality maintenance fee, and the expiration of the hospital safe patient handling credit. The rule has also been reformatted to make it easier to find specific information.
WAC 458-20-18801 Medical substance, devices, and supplies for humans - Drugs prescribed for human use - Medically prescribed oxygen - Prosthetic devices - Mobility enhancing equipment - Durable medical equipment
WAC 458-20-18801 (Rule 18801). This rule explains the B&O and retail sales tax reporting responsibilities of persons selling medical products such as prescription drugs, over-the-counter drugs, prosthetic devices, and durable medical equipment.
Rule 18801 has been revised to update statute information, reorganize the rule into five parts (Introduction, Medical products, Applicable taxes, Common sales and use tax exemptions, and bundled transactions). Five tables have been added to the Medical products part that provide examples of Durable medical equipment, Drugs, Mobility enhancing equipment, Over-the-counter drugs, and Prosthetic devices.
June 2014
WAC 458-61A-202 (REET Rule 202), WAC 458-61A-303 (REET Rule 303)
WAC 458-61A-202 (REET Rule 202) explains the exemption from Real Estate Excise Tax (REET) for
inheritance transfers. WAC 458-61A-303 (REET Rule 303) explains the REET affidavit requirements. Second Engrossed
Substitute House Bill 1117 (ESHB 1117), effective on June 12, 2014, provides a new REET exemption for transfers pursuant
to a transfer on death deed and substantiation requirements to claim that exemption, as well as a change to the affidavit
requirements for transfer on death deed transfers. REET Rules 202 and 303 are amended to reflect this new exemption and
accompanying substantiation and affidavit requirements for transfers pursuant to transfer on death deeds.
PTA 12.3.2014 Classification of Land Used for Christmas Tree Production
The purpose of this advisory is to clarify the statutory guidelines for designation of Christmas tree lands under Chapter 84.33 RCW.
WAC 458-20-261 Commute trip reduction incentives
The Department amends WAC 458-20-261 (“Rule 261”) to recognize provisions of ESSB 5024, Chapter 306, Laws of 2013, Sections 718 and 719, 2013 Regular Session; and ESSB 6001, Passed Legislature, Section 707, 2014 Regular Session. The commute trip reduction incentives provided by chapter 82.70 RCW were extended to June 30, 2015. The law was also amended to reduce the fiscal year limitation on the credit for the fiscal year periods beginning July 1, 2013, through June 30, 2016 from $2.75 million to $1.5 million for these final fiscal years.
Other language changes include removing language from the rule that reference the pre-2005 tax periods. After these changes and the removal of the language describing the pre-2005 periods from the rule, the remaining section designations in the rule consisting of letters and roman numerals were adjusted as necessary.
WAC 458-20-15503 Digital Products
The Department proposes to amend WAC 458-20-15503 to recognize the provisions of Engrossed Substitute Senate Bill (ESSB) 5882, Part VII [Chapter 13, Laws of 2013, 2nd Special Session]. This legislation established an exemption from retail sales tax and use tax for purchases of standard financial information by qualifying international investment management companies.
WAC 458-20-169 Nonprofit Organizations
Nonprofit organizations explain how the business & occupation tax, retail sales tax and use tax apply to activities often performed by nonprofit organizations.
Rule 169 has been revised to:
- Add information pertaining to 2013 legislation that provides a use tax exemption for items valued at less than $10,000 and purchased or received as a prize from a nonprofit organization or a library.
- Replace resale certificate language with reseller permit language.
- Change references pertaining to “nonprofit boarding homes” to “nonprofit assisted living facilities.”
- Include reference to RCW 82.08.02573 that provides a retail sales tax exemption for the sales exempt under RCW 82.04.3651.
- Add language that health or social welfare organizations qualify for a deduction for compensation received for providing mental health services, and child welfare services, when under a government-funded program.
- Add that temporary medical housing qualifies under health or welfare services when criteria are met
WAC 458-20-10004 Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities
WAC 458-20-10004 “Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities” is a new rule to provide brief adjudicative proceedings to those impacted by agency actions of the Department of Revenue in the administration of RCW chapter 59.30. These brief adjudicative proceedings are authorized by RCW 34.05.482 through 34.05.494. This rule explains the process by which a taxpayer may seek administrative review of agency actions of the Department of Revenue in the administration of RCW chapter 59.30 regarding the assessment of the one-time business license fee; assessment of the annual renewal application fee; assessment of the annual registration assessment fee; and assessment of the delinquency fee for manufactured and mobile home communities.
WAC 458-20-101 Tax Registration and Tax Reporting
The changes relate to the recent legislation SB 5715, Chapter 309, Section 1, Laws of 2013. Section 1 of this legislation amended RCW 82.32.215 adding language that the Department of Revenue may, by order, revoke the certificate of registration of a taxpayer for specific reasons concerning the non-payment of taxes.
WAC 458-20-268 Annual surveys for certain tax adjustments
This amendment adds language to WAC 458-20-268 relating to ESSB 5882, chapter 13, section 1503, Laws of 2013, 2013 2nd Special Session requiring an annual survey for the tax exemption for sales and use of machinery and equipment used directly in generating electricity from a qualifying renewable energy source.
Further, section (3) of the rule is amended to update the filing requirements. Amended subsection (3)(a) describes the required electronic filing; subsection (3)(b) describes the required paper form used if the department waives the electronic filing requirement upon a showing of good cause; and subsection (3)(c) explains that the department’s taxpayer account administration division is now handling these annual survey filings with updated contact information.
WAC 458-29A-600 Leasehold Excise Tax - Collection and administration
The Department amended this rule to implement SSB 5444, Chapter 235, Laws of 2013, which eliminated the leasehold excise credit for certain leasehold interests for the amount, if any, that the tax exceeds the property tax applicable if the property were privately owned.
WAC 458-14-056 Petitions-Time Limits-Waiver of Filing Deadline for Good Cause
WAC 458-14-056 incorporates ESHB 1826 (2011), which requires a Board of Equalization to waive the filing deadline for valuation appeals when certain criteria are met.
WAC 458-19-045 Levy Limit-Removal of limit (lid lift)
Incorporates 2SSB 5433 (2009), which allows property tax resulting from levy lid lifts to be
used to supplant existing funds in certain counties in certain years; ESB 6641 (2008), which clarifies that all
single year and multiple year lid lifts are considered temporary unless the ballot proposition approved by voters
make the increase permanent; ESB 5498 (2007), which extended the ability to request multiple year lid-lifts to
all taxing districts; and 2ESSB 5659 (2003), which allowed counties, cities, and towns to approve lid lifts for a
six-year period with one vote.
WAC 458-19-055 Levy Limit-Proration of Earmarked Funds
Incorporates ESHB 1432 (2013), which provides that the Veteran's Assistance Levy and
Developmental Disability and Mental Health Levy may be increased or reduced in the same proportion as the
regular county property tax levy, as approved by the county legislative authority. This authorization includes
situations where the county legislative authority has decided to not levy the full amount of property tax revenue
otherwise allowed under the law and bank the unused levy capacity for future use.
WAC 458-19-060 Emergency Medical Service Levy
Incorporates SSB 5381 (2012), which adjusts the voter requirements for the “uninterrupted
continuation” renewal of a 6-year or 10-year EMS levy to only require a majority vote and does not contain any
validation requirements; also incorporates SB 5628 (2011), relating to a limited property tax exemption for part
of a city from a county’s emergency medical services levy.
WAC 458-19-070 Five Dollars and Ninety Cents Statutory Aggregate Limit Calculation
Incorporates 2ESB5638 (2011), which allows certain Metropolitan Park Districts to protect a
portion of its levy rate outside of the $5.90 limitation with voter approval; also incorporates EHB 1969 (2011),
which allows a Flood Control Zone District in certain counties to protect a portion of its levy rate outside of the
$5.90 limitation.
WAC 458-19-075 Constitutional one percent limit calculation
Incorporates 2ESB 5638 (2011), which allows certain Metropolitan Park Districts to protect
a portion of its levy rate outside of the $5.90 limitation with voter approval; also incorporates EHB 1969
(2011), which allows a Flood Control Zone District in certain counties to protect a portion of its levy rate
outside of the $5.90 limitation.
WAC 458-19-085 Refunds-Procedures-Applicable Limits
Incorporates SHB 5705 (2013), which provides that taxes may be levied within a taxing
district in order to reimburse a taxing district for taxes that were abated or cancelled, offset by any supplemental
tax, in the next levy cycle. Any tax received to reimburse the taxing district for taxes that were abated or
cancelled does not reduce the levy authority of that taxing district.
WAC 458-20-245 Taxation of competitive telephone service, telecommunications service, and ancillary service
The rule-making effort amended WAC 458-20-245, presently entitled: “Telephone business, telephone service”
and to update it to present technology with the new title of: “Taxation of competitive telephone service, telecommunications
service, and ancillary service.” This updating of the rule also incorporates the legislative changes from Chapter 8, Laws of
2013, 63rd Legislature 2013 2nd Special Session.
This rulemaking identifies what constitutes competitive telephone services, telecommunications services, and ancillary
services; how these products are taxed; and the statutes that apply for determining if the sales of these products are subject to
taxation in Washington state, including issues of sourcing and apportionment. This rule applies to tax periods commencing
on or after July 1, 2008
WAC 458-20-255 Carbonated beverage syrup tax
This rule explains the carbonated beverage syrup
tax imposed by chapter 82.64 RCW. The syrup tax is an excise tax on the syrup, sold in this state, for use in making
carbonated beverages. Syrup tax.
Rule 255 has been revised to delete language in the introduction that has caused confusion now that beverage syrups are
being sold to consumers for use in home soda machines. Examples have been added under the subsection “Taxation
prohibited under the United States Constitution” that show if syrup tax is owed when sales involve Indian country.
WAC 458-20-210 Sales of tangible personal property for farming – Sales of agricultural products by
farmers
This rule explains the application of business and occupation, retail sales, and use taxes to the sales of tangible personal
property to farmers. It also explains the application of taxes to the sale of agricultural products by farmers.
Rule 210 has been revised to:
Update information to conform to existing law on the taxability of manufacturing fresh fruits and vegetables; manufacturing
dairy products; purchasing nutrient management equipment and facilities; and use of reseller permits. Information pertaining
to a B&O tax credit for alternatives to field burning that expired January 1, 2006, has been removed.
WAC 458-20-263 Exemptions from retail sales and use taxes for qualifying electric generating
and thermal heat producing systems using renewable energy sources
This is the interpretive rule for RCW 82.08.962, 82.08.963, 82.12.962, and 82.12.963 that provide retail sales and use tax exemptions for machinery and equipment used directly in generating electricity or producing heat using qualified renewable energy sources. The amendment of this rule was to incorporate legislative changes, including the most recent at Chapter 13, 2013 Laws, 2nd Special Session and to generally update this rule by recognizing new technology.
WAC 458-40-660 Timber excise tax – Stumpage value tables – Stumpage value adjustments
This rule is being revised to provide the stumpage values to be used during the second half of 2014
WAC 458-57-105, 115, 125, 175 Estate Tax Rules
This estate tax rulemaking is to amend three existing rules and adopt a new rule to incorporate changes from 2013 legislation. These changes include adding new language for the:
- Qualified family-owned business interest deduction;
- Applicable exclusion amount;
- Increases for the top four marginal tax rates;
- Handling of certain “transfers” regarding Qualified Terminal Interest Property (“QTIP”);
- Examples explaining the apportionment of estate taxes;
- Definition of “spouse;” and
Definition of the “Washington taxable estate” to specifically include an interest in QTIP included in the gross estate under IRC §2044 prospectively and retroactively to decedents dying on or after May 17, 2005
May 2014
ETA 3190.2014 Hazardous Substance Tax, Biodiesel (B100), and B99.9/B99 Biodiesel Blend
B99.9/B99 biodiesel blend that meets the ASTM D6751 specifications is not considered a hazardous substance for HST purposes and is not subject to the HST.
ETA 3043.2014 Low-density Light and Power Utility Deduction
The Department of Revenue has revised Excise Tax Advisory 3043. This ETA explains the public utility tax deduction provided by RCW 82.16.053 to qualifying power and light businesses.
RCW 82.16.053 requires that the Department determine the state average electric power rate each year and inform taxpayers of this rate. This rate is used by the power and light businesses to compute the amount of the deduction. The revised ETA 3043 updates the information to provide the rate to be used for the period of July 2014 through June 2015.
April 2014
WAC 458-61A-208 Foreclosure-Deeds in lieu of foreclosure-Sales pursuant to court order
The Department amended WAC 458-61A-208 to (1) make the documentation requirements discretionary for the counties and (2) edit certain rule language consistent with the statute.
WAC 458-20-178 Use Tax
WAC 458-20-178 (Rule 178) Use tax. This rule explains who is responsible for remitting use tax, and when and how to remit the tax. It also explains the imposition of use tax as it applies to the use of tangible personal property within Washington when the property was not subject to retail sales tax at the time of acquisition.
Rule 178 has been revised to: update and clarify information to conform to existing law; add examples; remove the incomplete and outdated listing of exemptions; reformat the presentation of information in a more useful manner; and provide references to other rules that may be helpful to readers.
ETA 3050.2014 Dump Truck Operators
This ETA explains the public utility tax (PUT), business and occupation tax (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators. This ETA previously issued on May 24, 2013, is being reissued in order to clarify how to distinguish the taxability of persons hauling for hire from persons hauling construction debris.
ETA 3019.2014 How are Port Charges for Dockage, Berthage, and Moorage of Ocean Vessels Taxed
This ETA explains the application of the Stevedoring Business and Occupation Tax to dockage, berthage, or moorage of ocean going vessels that is a part of a port’s functions, and alternatively, the application of the Public Utility Tax to ocean vessels docked for other purposes. This ETA was previously issued on February 2, 2009, has been reissued to address stevedoring; to include “dockage;” and to direct businesses to WAC 458-20-118 for reporting instructions for recreational moorage.
March 2014
PTA 1.1.2014 Taxation of Permanent Improvements on Tribal Trust Land
This PTA explains the property tax treatment of permanent improvements built on land owned by the United States and held in trust for an Indian tribe or tribal member.
WAC 458-02-100 to 300 (New)
For Repeal: 458-20-10101 &
Chapter 308-300 Consolidated Licensing Service Business Licensing Service Rules
Chapter 298, Laws of 2011 and Chapter 144, Laws of 2013 transferred the administration of the master license service (MLS) program from the department of licensing to the department of revenue, effective July 1, 2011 and renamed the master license service program to business license service (BLS) program. See Chapters 19.02, 19.80 RCW. The department of revenue adds the new rule chapter WAC 458-02 to replace the former BLS rules under Chapter 308-300 WAC and WAC 458-20-10101.
WAC 458-20-10004 Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities
This new section will provide brief adjudicative proceedings to those impacted by agency actions of the Department of Revenue in the administration of RCW chapter 59.30 regarding the assessment of the one-time business license fee; assessment of the annual renewal application fee; assessment of the annual registration assessment fee; and assessment of the delinquency fee for manufactured and mobile home communities.
ETA 3189.2014 Taxation of Alarm Monitoring
This ETA explains the taxation of a single alarm monitoring service. The ETA discusses alarm monitoring services that qualify as digital automated services (DAS) under RCW 82.04.192, including instances where services are not considered DAS. The ETA further explains the application of the primarily human effort exclusion from DAS in this context, providing related examples.
February 2014
WAC 458-61A-105, 202, 205, 206, 207, 210, 213, 215, 301, 303, 304 Multiple REET Rules
The Department amended WAC 458-61A-105, -202, -205, -206, -207, -210, -213, -215, -301, -303 and -304 to (1) amend REET affidavit documentation requirements for certain rules, (2) correct usage of certain terms in the rules, (3) make rule language consistent with the statutory language upon which the rules are based, and (4) edit typographical and grammatical errors in the rules.
ETA 3183.2014 International Investment Management Services
This ETA explains the qualification and application of the lower tax rate imposed under RCW 82.04.290(1) for international investment management services as defined in RCW 82.04.293. This ETA provides guidance on how to determine whether a person is primarily engaged in the business of providing investment management services and whether a person's clients qualify them as engaged in international investment management services.
ETA 3188.2014 RCW 82.08.820 provides an exemption in the form of a refund (or remittance) of sales tax for wholesalers and third-party warehousers who own or operate grain elevators.
This Excise Tax Advisory (ETA) explains what a grain elevator is under RCW 82.08.820(1) and the application of the proper rate of tax remittance under RCW 82.08.820(3) when a grain elevator is expanded.
January 2014
ETA 3185.2014 Sourcing and Attribution of Income on Leases and Rentals of Tangible Personal Property
This ETA explains the business and occupation (B&O) and retail sales tax responsibilities of a seller (lessor) leasing tangible personal property to a consumer (lessee). The ETA clarifies that the lease of tangible personal property to a consumer is a retail sale subject to retailing B&O tax and retail sales tax unless a specific exemption applies; the measure upon which theses taxes are due; and how these taxes are sourced and attributed under Washington law. The ETA addresses both leasing arrangements that require recurring periodic payments and those that do not as they relate to:
- Tangible personal property (other than transportation equipment or motor vehicles, trailers, semitrailers, and aircraft that do not qualify as transportation equipment);
- Transportation equipment; and
- Motor vehicles, trailers, semitrailers, and aircraft that do not qualify as transportation equipment.
ETA 3186.2014 Use Tax Liability for Lessees on Leased Tangible Personal Property
This ETA explains a lessee’s use tax payment responsibility when a lessee brings leased tangible personal property into Washington from outside the state. The ETA clarifies that lessees are responsible for paying Washington’s use tax on the value of the article used unless a specific exemption or credit applies.
WAC 458-20-273 Renewable energy system cost recovery
WAC 458-20-273 Renewable energy system cost recovery explains the renewable energy incentive program created by the enabling statutes found at RCW 82.16.110 through 82.16.130. Senate Bill 5526 (Chapter 179, Laws of 2011) amended RCW 82.16.110 through RCW 82.16.120 adding solar stirling converters manufactured in Washington to the list of qualified renewable energy devices or components. This rule-making effort was to recognize these statutory changes and to address and clarify other issues that have been identified during the Department's administration of this program.