2005 Rule and Interpretive Statements, Adoptions, and Repeals

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2005 Rule and Interpretive Statements, Adoptions, and Repeals 2005 Rule and Interpretive Statements, Adoptions, and Repeals

Below are rule and interpretive statement actions for the year 2005. 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.

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Rules:
WAC - Washington Administrative Code

Interpretive Statements:
ETA - Excise Tax Advisory
PTA - Property Tax Advisory
IAG - Interim Audit Guideline

December 2005

WAC 458-20-194 Doing business inside and outside the state

Adoption - Effective January 1, 2006

This rule explains the taxability of persons doing business both within and outside Washington . Because the apportionment principles for persons engaging in activities subject to the service and other activities B&O tax (RCW 82.04.460(1)) are discussed in very general terms only, most of the Department's specific guidance on apportionment has been by Washington Tax Decision (WTD).

The Department is amending this rule to provide more detailed and specific guidance on cost apportionment for businesses engaged in activities taxable under RCW 82.04.290 (service and other activities B&O tax) and 82.04.2908 (boarding home s B&O tax). Historically, the Department has issued specific guidance concerning cost apportionment and separate accounting through published determinations (Washington Tax Decisions) as authorized by RCW 82.32.410. This has proved to be less than satisfactory for both the businesses and the Department, because the determinations address only the facts before the Department in a particular appeal.

The amended rule provides clearer guidance on apportionment principles that is consistent with statute (RCW 82.04.460(1)) and, to the extent possible, based on records that businesses generally retain for other purposes and fairly measures the Washington activity of businesses. The rule also provides clearer guidance on when a business should use separate accounting or the cost apportionment method for determining the business’ Washington B&O tax liability. Examples have been added to clarify when a business is subject to Washington B&O tax because it has nexus with Washington and the standards the Department will use to determine if the business has nexus with another state.

he Department anticipates canceling Excise Tax Advisories (ETAs) 019.04.194, 269.04.194, 270.04.194, and 324.04.194/224 when an amended Rule 194 becomes effective

WAC 458-30-590 Rate of Inflation - Publication - Interest Rate - Calculation

Adoption - Effective January 1, 2006

To provide the rate of inflation used by county officials 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, the Open Space Program. Special benefit assessments for certain local improvements to farm and agricultural or timber land classified under chapter 84.34 RCW may be deferred by the land owner. If a landowner has chosen to defer these assessments, when the land is subsequently removed or withdrawn from classification the deferred special benefit assessment becomes due and payable with interest. WAC 458-30-590 provides the rate of inflation used in calculating the interest rate that is added to the amount of deferred special benefit assessments.

WAC 458-20-196 Bad debts

Adoption - Effective January 8, 2006

This rule provides information about the tax treatment of bad debts and credit losses under the business and occupation (B&O), public utility, retail sales, and use taxes.

Part I of Chapter 514, Laws of 2005 (ESHB 2314), made sales of "extended warranties" retail sales subject to retail sales tax and the retailing classification of the B&O tax. Sales of these warranties were previously subject to the service and other activities B&O. Several of the examples in this rule are premised on the previous tax treatment of certain warranties. This rule revision updates the examples to reflect current law.

WAC 458-20-261 Commute trip reduction incentives

Adoption - Effective January 13, 2006

The purpose of this rule is to explain the various commute trip reduction incentives that are available. First, RCW 82.04.355 and 82.16.047 provide exemptions from business and occupation (B&O) tax and public utility tax on amounts received from providing commuter ride sharing and ride sharing for persons with special transportation needs. RCW 82.08.0287 and 82.12.0282 provide sales and use tax exemptions for sales or use of passenger motor vehicles as ride-sharing vehicles. Finally, chapter 82.70 RCW provides commute trip reduction incentives in the form of B&O tax or public utility tax credit in connection with ride sharing, public transportation, car sharing, and non-motorized commuting. The Department is revising this rule to reflect legislative changes provided by chapter 364, Laws of 2003 and chapter 297, Laws of 2005, and to clarify the application of taxes. The rule has been reformatted into a question and answer format to provide the information in a more useful manner.

WAC 458-19-005 Definitions, 458-19-070 Procedure to adjust consolidated levy rate for taxing districts when the statutory aggregate dollar rate limit is exceeded, and 458-19-075 Constitutional one percent limit calculation

Adoption - Effective January 22, 2006

The Department has amended these rules to incorporate statutory changes made to RCW 84.52.010 and 85.52.043. The amended statutes describe the order in which property tax levies are to be prorated if either the constitutional 1% limit or the $5.90 limit is exceeded. New taxing districts have been created by the Legislature and the prorationing order has also been changed.

WAC 458-40-540 Forest land values - 2006

Adoption - Effective January 1, 2006

This rule contains the forest land values for 2006. County assessors use these published land values for property tax assessments made January 1, 2006. A statutory formula adjusts values annually and requires adoption by the beginning of January each year.

WAC 458-40-660 Timber excise tax - Stumpage value tables - Stumpage value adjustments

Adoption - Effective January 1, 2006

This rule contains the stumpage values used by harvesters of timber to calculate the timber excise tax. This rule is revised to provide the stumpage values to be used during the first half of 2006. The rule also combines Red Cedar shakes and shingles into a single reporting category and requires these products to be reported by cords rather than boardfeet.

WAC 458-40-610 Timber excise tax - Definitions and 458-40-680 Timber excise tax - Volume harvested - Approved scaling and grading methods - Sample scaling - Conversions

Adoptions - Effective January 22, 2006

The current rules provide definitions of terms in chapter 458-40 WAC and describe the methods used to determine the amount of wood harvested. The present rule does not provide a specific category for wood harvested as firewood. This requires firewood to be reported as sawlogs; however, the values of sawlogs appear to be higher than firewood values. The adopted rules define firewood as scaled utility log grade, and require it to be measured by converting it at a rate of three tons per cord.

ETA 89-005 A Statement of Purpose and Intent with Respect to the Taxability of Newspapers and Definition of a "Newspaper"

Cancellation - Effective December 22, 2005

This ETA (formerly RPM 89-5) was issued in 1989 to provide an interim definition of "newspaper" to be used until a definition could otherwise be provided that would comply with constitutional free speech guarantees. It is cancelled because the interim definition conflicts with and is superseded by the statutory language ultimately enacted into law (RCW 82.04.214).

November 2005

WAC 458-30-262 Agricultural land valuation - Interest rate - Property tax component

Adoption - Effective January 1, 2006

This rule provides county assessors with the rate of interest and property tax component used in valuing farm and agricultural land classified under chapter 84.34 RCW, the Open Space Program, during assessment year 2006. This rule is being amended to update the interest rate and the property tax component.

WAC 458-18-220 Refunds - Rate of Interest

Adoption - Effective December 2, 2005

This rule was updated to provide the rate of interest that will be included when property taxes paid in 2006 are refunded in subsequent years. The rate of interest for treasury bill auction year 2005 is used as a basis for refunding property taxes paid in 2006 and refunded in a subsequent year.

WAC 458-20-228 Returns, remittances, penalties, extensions, interest, stay of collection

Adoption - Effective December 2, 2005

This rule discusses the responsibility of taxpayers to timely pay their tax liabilities, and the acceptable methods of payment. The rule explains the statutory due dates for persons remitting excise tax returns, and the interest and penalties imposed by law when a taxpayer fails to timely pay the correct amount of tax, as well as other penalties which may be applied. The Department is only authorized to waive interest or penalties under limited circumstances. The rule provides examples of circumstances that qualify for a waiver of interest or penalties, and explains how a taxpayer may request a waiver of the same.

Rule 228 has been amended to reflect provisions of chapter 13, 1st special session, Laws of 2003 (EHB 2269). This legislation changed penalty provisions of RCW 82.32.090 and the due date for persons filing excise tax returns on a monthly basis. Two tables and additional information has been added and other format changes have been made to provide the information in a more useful manner and assist readers in finding information of interest.

WAC 458-29A-400 Leasehold excise tax - Exemptions

Adoption - Effective December 17, 2005

This rule explains the exemptions from leasehold excise tax provided by RCW 82.29A.130, 82.29A132, 82.29A134, and 82.29A.136. The rule has been revised to incorporate two additional exemptions from the leasehold excise tax that were passed by the 2005 legislature. The first exemption is for municipally-owned historic sites (chapter 170, Laws of 2005) , and the second is for leasehold interests in certain amphitheaters (chapter 514, Laws of 2005).

Chapter 458-61A WAC Real Estate Excise Tax

Adoption - Effective December 17, 2005

Chapter 458-61 WAC provides tax reporting information to persons who sell real estate in Washington , or who transfer a controlling interest in an entity that owns real estate in this state. The rules explain who is liable for the tax, how and when the tax imposed by chapter 82.45 RCW is paid, which transactions are taxable, what exemptions are available from imposition of the tax, and the record keeping requirements.The Department is revising the rules to update existing information, more clearly and completely explain Department practices in administering the tax, and incorporate legislative amendments to Chapter 82.45 RCW. The Department has consolidated the information from several of the existing rules, and organized the chapter in a more "user friendly" format. The rules adopted are being codified in a new Chapter 458-61A, and the rules in Chapter 458-61 are being repealed. Chapter 458-61 WAC provides tax reporting information to persons who sell real estate in Washington , or who transfer a controlling interest in an entity that owns real estate in this state. The rules explain who is liable for the tax, how and when the tax imposed by chapter 82.45 RCW is paid, which transactions are taxable, what exemptions are available from imposition of the tax, and the record keeping requirements.The Department is revising the rules to update existing information, more clearly and completely explain Department practices in administering the tax, and incorporate legislative amendments to Chapter 82.45 RCW. The Department has consolidated the information from several of the existing rules, and organized the chapter in a more "user friendly" format. The rules adopted are being codified in a new Chapter 458-61A, and the rules in Chapter 458-61 are being repealed.

October 2005

WAC 458-20-141 Duplicating activities and mailing bureaus

WAC 458-20-144 Printing industry

WAC 458-20-17803 Use tax on promotional material

Emergency adoptions - Effective October 28, 2005

WAC 458-20-141 explains the B&O, retail sales, and use tax reporting responsibilities of persons who engage in duplicating activities or who provide mailing bureau services in Washington . WAC 458-20-144 explains the B&O and retail sales tax reporting responsibilities of persons engaged in printing activities. Both rules were revised in January 2005, each with an effective date of July 1, 2005 .

One of the major changes in that revision was the removal of language stating that a deduction from the measure of tax for both B&O tax and the retail sales tax was available where a mailing bureau or printer purchases postage for a customer and charges that customer for the postage. This revision explained that amounts received from a customer for postage costs incurred by the seller are, under the law, included in the measures of both taxes. The change to Rule 141 also identified circumstances under which postage charges are not included in the measure of tax because the charges qualify as advances or reimbursements.

WAC 458-20-17803 explains the use tax reporting responsibilities of persons who distribute or cause to be distributed tangible personal property promoting the sale of products or services are subject to use tax on the value of the property. While the January 2005 rule action had a July 1, 2005 effective date, the rule explains a use tax responsibility that resulted from provisions of chapter 367, Laws of 2002 that became effective June 1, 2002 .

Current rule making action:

Chapter 514, Laws of 2005, provides a B&O tax deduction and retail sales/use tax exemption for delivery charges made for the delivery of direct mail, if the charges are separately stated. These provisions of chapter 514 became effective May 16, 2005 , and supercede the instructions regarding charges for postage costs in these rules.

The Department is adopting revisions to Rules 141, 144, and 17803 on an emergency basis to reflect this legislative change. The Department plans to proceed with rule making for permanent revisions to these rules.The rules being adopted are the same as those adopted on an emergency basis on June 30, 2005 (WSR 05-14-091 ).

WAC 458-20-166 Hotels, motels, boarding houses, rooming houses, resorts, summer camps, trailer camps, etc.

Emergency adoption - Effective October 28, 2005

This rule explains the tax-reporting responsibilities of persons providing lodging and related services to transients for a charge. The rule explains that charges for coin-operated and self-service laundry facilities are a retail sale and subject to the retailing business and occupation (B&O) tax and retail sales tax. Chapter 514, Laws of 2005, excludes such charges from the definition of a retail sale. Thus, effective July 1, 2005 , charges for coin-operated and self service laundry facilities will not be subject to retail sales tax and income derived from such charges will be subject to the service and other activities B&O tax.

The Department is adopting revisions to Rule 166 on an emergency basis to reflect this legislative change. The Department plans to proceed with rule making for permanent revisions to this rule. This emergency rule is the same as that filed on June 30, 2005 (WSR 05-14-088 ).

WAC 458-20-210 Sales of agricultural products by farmers

WAC 458-20-271 Tax incentives to reduce agricultural burning

Emergency adoptions - Effective October 28, 2005

WAC 458-20-210 explains the application of business and occupation (B&O), retail sales, and use taxes to the sale and/or use of feed, seed, fertilizer, spray materials, and other tangible personal property for farming. This rule also explains the application of B&O, retail sales, and litter taxes to the sale of agricultural products by farmers.

One of the issues discussed Rule 210 is the tax incentives provided for reducing agricultural burning of cereal grain and grass fields. Chapter 420, Laws of 2005, made a number of changes to the tax incentives. These changes are effective July 1, 2005 . The Department has adopted a new WAC 458-20-271 to explain the tax incentives to reduce agricultural burning. The information on the tax incentives for periods prior to the legislative change has been removed from Rule 210 and incorporated into Rule 271.

The Department is adopting the new Rule 271 and a revised Rule 210 on an emergency basis to recognize the legislative change. These emergency rules are the same as the emergency rules filed on June 30, 2005 (WSR 05-14-105).

WAC 458-20-250 Refuse-solid waste collection business - Core deposits and credits, and battery core charges

WAC 458-20-272 Tire fee

Emergency adoptions - Effective October 28, 2005

Beginning July 1, 2005 , sellers must collect a one dollar fee on every retail sale of each new replacement vehicle tire. Chapter 354, Laws of 2005 (Substitute House Bill 2085). The tire fee is to be collected by the seller from the buyer, and the seller is personally liable for the fee if the seller fails to collect it from the buyer. This tire fee is effective until June 30, 2010 .

WAC 458-20-272 (Tire fee) is a new rule explaining the seller’s responsibility for collecting the fee from the buyer, how the fee is reported, and what tires are subject to the fee. WAC 458-20-250 (Refuse-solid waste collection business—Core deposits and credits, and battery core charges) provides information about taxes imposed on solid waste collection and special provisions in law for core deposits and credits, battery core charges, and a tire fee that expired in 1994. Rule 250 is being revised to remove the two brief paragraphs referring to the expired tire fee to eliminate possible confusion.

The Department is adopting the new Rule 272 and a revised Rule 250 on an emergency basis to recognize the legislative change. These emergency rules are the same as those adopted on June 30, 2005 (WSR 05-14-089 ).

WAC 458-20-257 Warranties and maintenance agreements

Emergency adoption - Effective October 20, 2005

This rule explains the business and occupation (B&O), retail sales, and use tax reporting responsibilities of persons selling warranties or maintenance agreements. Chapter 514, Laws of 2005, changed the tax consequences for extended warranties by classifying the sale of an extended warranty as a retail sale. This change in law is effective July 1, 2005. The result is that on and after July 1, 2005, sellers are required to collect and remit retail sales tax when selling extended warranties to consumers.

The Department is adopting revisions to this rule on an emergency basis to recognize this legislative change. This emergency rule is the same as the emergency rule filed on June 30, 2005.

September 2005

WAC 458-20-100 Appeals

Adoption - Effective November 1, 2005

This rule explains the procedures for administrative review of actions of the Department of Revenue. The revised rule provides clearer and more up-to-date information to taxpayers and department personnel on appeal procedures, increases small claim limits, and provides for proposed decisions in executive level appeals. The information in the rule has also been reorganized to make it easier for readers to understand and use.

WAC 458-20-185 Tax on tobacco products

Emergency adoption - Effective October 1, 2005

This rule explains the provisions of chapter 82.26 RCW, Tax on Tobacco Products. The rule identifies distributors who must pay the tax, the imposition of the tax, applicable penalties, the books and records that must be kept, and when a credit for previously paid tax may be taken.

The Department is revising this rule on an emergency basis to incorporate provisions of chapter 180, Laws of 2005.

WAC 458-20-186 Tax on cigarettes

Emergency adoption - Effective October 1, 2005

This rule provides tax-reporting information to persons who sell, use, consume, handle, possess, or distribute cigarettes. The rule explains who is liable for the tax, how and when the cigarette tax imposed by chapter 82.24 RCW is to be paid, and the record keeping requirements. It explains the application process for wholesale and retail cigarette vendor licenses, and includes references to statutory fees, bonding requirements, and explains the conditions for and process of application for a reinstatement of a license following a revocation under the Administrative Procedure Act.

The Department is revising this rule on an emergency basis to incorporate provisions of chapter 180, Laws of 2005.

WAC 458-20-165 Laundry, dry cleaning, linen and uniform supply, and self-service and coin-operated laundry services

Adopted - Effective October 27, 2005

This rule explains the application of excise taxes to laundry, dry cleaning, linen and uniform supply, and self-service and coin-operated laundry services. As a result of Chapter 514, Laws of 2005, charges for coin-operated and self-service laundry facilities are no longer subject to retail sales tax and income derived from such charges are subject to the service and other activities B&O tax.

ETA 2011-3S.32 Withdrawal of Published Determination

Issue - Effective September 19, 2005

Excise Tax Advisory 2011.32 (ETA 2011) explains that the Department of Revenue (Department) publishes certain written opinions issued by its Appeals Division. These determinations, called Washington Tax Decisions or WTDs, are published in accordance with RCW 82.32.410 and are available on the Department's Internet website.

ETA 2024.04.182 Storing, inspecting, testing, and labeling of canned salmon

Issue - Effective September 12, 2005

The purpose of this advisory is to clarify the tax reporting responsibilities of persons in Washington who store, inspect, test, and label canned salmon that was canned outside of Washington.

August 2005

WAC 458-16-1000 Property belonging to federally recognized Indian tribes - Definitions - Exemption - Declaration process - Appeal rights

Adoption - Effective September 25, 2005

This rule describes the property tax exemption that may be claimed by a federally recognized Indian tribe for property exclusively used for essential government services in accordance with the 2004 changes to RCW 84.36.010. The rule explains the parameters of the exemption, how the exemption may be obtained, how a tribe may appeal a denial of an exemption claim, how essential government services is defined, and provides applicable examples.

WAC 458-20-270 Telephone program excise tax rates

Adoption - Effective September 26, 2005

The department is required to annually determine the tax rates imposed on switched access lines to fund the telephone relay service program and the Washington telephone assistance program. Each tax rate is determined by dividing the respective program budgets by the number of switched access lines reported to the deparment in the prior calendar year. The department retains no discretion in the determination of these tax rates, the amount of which is explicitly dicated by the statutory formulas and inputs provided to the department.

This is a new rule providing telephone program excise tax rates. WAC 458-20-270 was initially adoped as an emergency rule because it was required to take effect by July 1, 2005. This action will adopt a permanent rule.

July 2005

ETA 2003-6s Cancellation of excise tax advisories (6th supplement)

Issue - Effective July 18, 2005

This ETA provides a list of excise tax advisories that have been cancelled subsequent to those advisories identified in the fifth supplement.

PTA 3.0.200 Implementation of the Agricultural Burning Legislation, ESHB 1987 - Effective March 22, 2000

Cancellation - Effective July 29, 2005

PTA 3 explains the property tax exemption provided by RCW 84.36.580 for equipment used as alternatives to the field burning of cereal grains and field and turf grass grown for seed. The information provided in this document is no longer neeed because the property tax exemption was repealed by chapter 420, Laws of 2005 (2SSB 5663).

June 2005

WAC 458-12-342 New Construction - Assessment

Adoption - Effective July 31, 2005

This rule has been amended to bring it into conformity with current law. The amendment clarifies when new construction, that is not completed before July 31 in any year, is added to the assessment roll. It also explains that an improvement located on leased public land is new construction for purposes of RCW 36.21.070 and 36.21.080. The rule has been updated regarding the time period for filing appeals of the value placed on new construction by the assessor.

WAC 458-20-141 Duplicating activities and mailing bureaus

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the B&O, retail sales, and use tax reporting responsibilities of persons who engage in duplicating activities or who provide mailng bureau services in Washington. A major change in this revision is the removal of language stating that a deduction from the measure of tax for both B&O and retail sales tax was available where a mailing bureau purchases postage for a customer and charges that customer for the postage. This revision explained that amounts received from a customer for postage costs incurred by the seller are, under the law, included in the measures of both taxes. The change to this rule also identified circumstances under which postage charges are not included in the measure of tax because the charges qualify as advances or reimbursements.

WAC 458-20-144 Printing industry

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the B&O and retail sales tax reporting responsibilities of persons engaging in printing activities. A major change in this revision is the removal of language stating that a deduction from the measure of tax for both B&O and retail sales tax was available where a mailng bureau purchases postage for a customer and charges that customer for the postage. This revision explained that amounts received from a customer for postage costs incurred by the seller are, under the law, included in the measures of both taxes.

WAC 458-20-17803 Use tax on promotional material

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the use tax reporting responsibilities of persons who distribute or cause to be distributed tangible personal property promoting the sale of products or services are subject to use tax on the value of the property. While the January 2005 rule action had a July 1, 2005, effective date, the rule explains a use tax responsibility that resulted from provisions of chapter 367, Laws of 2002 that became effective June 1, 2005.

Chapter 514, Laws of 2005, provides a B&O tax deduction and retail sales/use tax exemption for delivery chagres made for the delivery of direct mail, if the charges are separately stated. These provisions of chapter 514 became effective May 16, 2005, and supercede the instructions regarding charges for postage costs in these rules.

WAC 458-20-165 Laundry, dry cleaning, linen and uniform supply and self-service and coin-operated laundry services

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the apploication of excise taxes to laundry, dry cleaning, linen and uniform supply, and self-service and coin-operated laundry services. Rule 165 explains that charges for coin-operated and self-service laundry facilities are a retail sale and subject to the retailing B&O tax and retail sales tax. Chapter 514, Laws of 2005, excludes such charges from the definition of a retail sale. Thus, effective July 1, 2005, charges for coin-operated and self-service laundry facilities will not be subject to retail sales tax and income derived from such charges will be subject to the service and other activities B&O tax.

WAC 458-20-166 Hotels, motels, boarding houses, rooming houses, resorts, summer camps, trailer camps, etc.

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the tax-reporting responsibilities of persons providing lodging and related services to transients for charge. The rule explains that charges for coin-operated and self-service laundry facilities are a retail sale and subject to the retailing B&O tax and retail sales tax. Chapter 514, Laws of 2005, excludes such charges from the definition of a retail sale. Thus, effective July 1, 2005, charges for coin-operated and self-service laundry facilities will not be subject to retail sales tax and income derived from such charges will be subject to the service and other activities B&O tax.

WAC 458-20-168 Hospitals, nursing homes, boarding homes, adult family homes, etc.

Adoption - Effective July 31, 2005

This rule explains the application of B&O, retail sales, and use taxes to persons operating hospitals, nursing homes, boarding homes, adult family homes, and similar health care facilities. The Department is revising this rule to relfect legislative changes and to provide updated and more comprehensive information.

WAC 458-20-177 Sales of motor vehicles, campers, and trailers to nonresident consumers

Adoption - Effective July 31, 2005

This rule describes the application of the B&O and retail sales taxes to sales of motor vehicles, campers, and trailers to nonresident consumers. The rule describes the application of the retail sales tax exemption provided by RCW 82.08.0264 for the sale of motor vehicles, campers, and trailers delivered to nonresidents in Washington , including military personnel temporarily stationed in Washington . It also describes the tax consequences of a sale to a nonresident when the vehicle, camper, or trailer is delivered outside the state.

The Department amended this rule to update the documentation forms that are provided in the rule. The "Buyer's Certificate--Out-of-State Delivery" and "Seller's Certificate--Out-of-State Delivery" have been changed to require that statements regarding the accuracy and completion of the information on the certificates be initialed by the buyer and person delivering the vehicle to the buyer. Information about the sales tax exemptions provided by RCW 82.08.0269 and 82.08.0273 has been added. Specific factual examples of sales of motor vehicles and their respective tax results have also been added to the rule. The information in this rule has been reorganized to make it easier for readers to understand and use. The Department amended this rule to update the documentation forms that are provided in the rule. The "Buyer's Certificate--Out-of-State Delivery" and "Seller's Certificate--Out-of-State Delivery" have been changed to require that statements regarding the accuracy and completion of the information on the certificates be initialed by the buyer and person delivering the vehicle to the buyer. Information about the sales tax exemptions provided by RCW 82.08.0269 and 82.08.0273 has been added. Specific factual examples of sales of motor vehicles and their respective tax results have also been added to the rule. The information in this rule has been reorganized to make it easier for readers to understand and use.

WAC 458-20-216 Successors, quitting business

Adoption - Effective July 31, 2005

This rule explains under what circumstances a person is considered a successor to a person quitting business. It explains the successor's responsibility for payment of an outstanding tax liability owed by the person taxpayer quitting business, whether that liability is known at the time of purchase or not. The Department has revised this rule to reflect legislative changes (EHB 2269) and to provide updated information to taxpayers.

EHB 2269, Chapter 13, Laws of 2003 1st sp. sess., revised RCW 82.04.180 and 82.32.140 to change the conditions under which a person becomes a successor. The primary changes reflected in the rule are:

A successor can be a successor if obtaining from a taxpayer more than fifty percent of the fair market value of intangible assets;
A surviving corporation of a statutory merger is included in RCW 82.04.180’s definition of “successor”; and

If the fair market value of assets acquired by a successor is less than $50,000, the successor's liability for payment of the taxpayer's unpaid tax is limited to the fair market value of the acquired assets.

EHB 2269, Chapter 13, Laws of 2003 1st sp. sess., revised RCW 82.04.180 and 82.32.140 to change the conditions under which a person becomes a successor. The primary changes reflected in the rule are:

A successor can be a successor if obtaining from a taxpayer more than fifty percent of the fair market value of intangible assets;
A surviving corporation of a statutory merger is included in RCW 82.04.180’s definition of “successor”; and

WAC 458-20-257 Warranties and maintenance agreements

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the B&O, retail sales, and use tax reporting responsibilities of persons selling warranties or maintenance agreements. Chapter 514, Laws of 2005, changed the tax consequences for extended warranties by classifying the sale of an extended warranty as a retail sale. This change in law is effective July 1, 2005 . The result is that on and after July 1, 2005 , sellers are required to collect and remit retail sales tax when selling extended warranties to consumers. The Department is adopting revisions to Rule 257 on an emergency basis to recognize this legislative change. The Department plans to proceed with rule making for permanent revisions to this rule.

WAC 458-20-250 Refuse-solid waste collection business - Core deposits, etc.

Adoption - Effective July 1, 2005 (Emergency filing)

This rule provides information about taxes imposed on solid waste collection and special provisions in law for core deposits and credits, battery core charges, and a tire fee that expired in 1994. Rule 250 is being revised to remove the two paragraphs referring to the expired tire fee to eliminate possible confusion.

WAC 458-20-272 Tire fee

Adoption - Effective July 1, 2005 (Emergency filing)

This is a new rule explaining the seller’s responsibility for collecting the fee from the buyer, how the fee is reported, and what tires are subject to the fee.

The Department has adopted the new Rule 272 on an emergency basis because the new tire fee is effective on July 1, 2005 . The Department plans to proceed with rule making for a permanent new Rule 272.

WAC 458-40-660 Timber excise tax - Stumpage value tables

Adoption - Effective July 31, 2005

This rule provides eight stumpage value tables representing the areas in the state in which timber is harvested. This rule is revised to provide stumpage values for July 1 - December 31, 2005.

ETA 2025 Refunds of over collected retail sales tax

Issued - Effective June 30, 2005

This advisory explains the procedures used by the Department for making refunds or credits to retail sellers of retail sales tax collected in error. This information replaces the information previously provided in Interim Audit Guideline 02.01.

ETA 2026 Taxability of credit bureau services

Issued - Effective June 30, 2005

This advisory provides information on the taxability of credit bureau services and on the propert tax treatment of buyers of credit bureau services where the service provider has not collected retail sales tax.

ETA 2027 Taxability of reagents and other diagnostic substances

Issued - Effective June 30, 2005

This advisory provides guidance regarding the taxability of reagents, controls, calibrators, and other diagnostic substances. This information replaces the information previously provided in Interim Audit Guideline 05.03.

IAG 02.01 Refunds of retail sales tax collected in error

Cancelled - Effective June 30, 2005

IAG 03.01 Taxability of credit bureau services

Cancelled - Effective June 30, 2005

IAG 05.03 Taxability of reagents, controls, and calibrators

Cancelled - Effective June 30, 2005

WAC 458-20-210 Sales of agricultural products by farmers

Adoption - Effective July 1, 2005 (Emergency filing)

This rule explains the appliation of business and occupation (B&O), retail sales, and use taxes to the sale and/or use of feed, seed, fertilizer, spray materials, and other tangible personal property for farming. This rule also explains the application of B&O, retail sales, and litter taxes to the sale of agricultural products by farmers. One of the issues discussed in Rule 210 is the tax incentives provided for reducing agricultural burning of cereal grains and grass fields. Chapter 420, Laws of 2005, made a number of changes to the tax incentives. The information on tax incentives has been removed from this rules and incorporated into WAC-458-20-271.

WAC 458-20-271 Tax incentives to reduce agricultural burning

Adoption - Effective July 1, 2005 (Emergency filing)

This new rule explains the tax incentives to reduce agricultural burning. It covers all agricultural burning issues, including time periods prior to and after the effective date of the legislative change.

ETA 2022 Revision 1 - Distinguishing Warranties and Maintenance Agreements

Issued - Effective June 28, 2005

Language was added to explain that the ETA applies only to periods on or before June 30, 2005. Effective July 1, 2005, the sale of an extended warranty is subject to retailing B&O and retail sales taxes. Prior to this date, the sale of an extended warranty is subject to the service and other activities B&O tax.

ETA 2002 (7th edition) Low-density light and power utility deduction

Issued - Effective June 21, 2005

This advisory explains the public utility tax deduction provided by RCW 82.16.053 to qualifying power and light businesses.

WAC 458-20-270 Telephone program excise tax rates

Adoption - Effective June 21, 2005 (Emergency filing)

RCW 82.72.020 requires the department to collect certain telephone program excise taxes. Those taxes include the tax on switched access lines imposed by RCW 43.20A.725 (telephone relay service) and 80.36.430 (Washington telephone assistance program). Pursuant to those statutes, the department must annually determine the rate of each tax according to the statutory formulas. This new rule provides those rates.

May 2005

WAC 458-20-268 Annual surveys for certain tax adjustments

Adoption - Effective May 10, 2005

In order to take certain tax crdits and deferrals ("tax adjustments"), taxpayers must file an annual survey with the department of revenue containing certain information about their business activities and employment. The purpose of this rule is to explain the survey requirements for tax adjustments provided to the high technology industry and the manufacturing industry located in rural areas. This rule explains who is required to file an annual survey, how to file a survey, and what information must be included in the surveys.

ETA 2009-3S BTA Nonacquiescence

Issued - Effective May 25, 2005

This is the third supplement to ETA 2009, and identifies one BTA decision to which the Department does not acquiesce. This ETA explains the application of BTA decisions and when the Department will announce a statement regarding adverse BTA decisions via an ETA or ETA supplement. ETA 2009 and all its supplements should be retained.

ETA 540 Special Hazardous Substance Tax Application

Cancellation - Effective May 31, 2005

This advisory was cancelled because it provides out-of-date information that is no longer needed. The ETA refers to provisions of WAC 458-20-252 that do not exist in the current version of the rule. Issues addressed in this document that are pertinent under current law are addressed in the rule. There is also no need for the list of examples of products that result from a crude oil refinery process. This list is 17 years old, and such information could be found via internet research.

WAC 458-16-1000 Property belonging to federally recognized Indian tribes - Definitions - Exemption - Declaration process - Appeal rights

Adoption - Effective May 27, 2005 (Emergency filing)

This rule describes the property tax exemption that may be claimed by a federally recognized Indian tribe for property exclusively used for essential government services in accordance with the 2004 changes to RCW 84.36.010. The rule explains the parameters of the exemption, how the exemption may be obtained, how a tribe may appeal a denial of the exemption, how essential government services is defined, and provides applicable examples.

April 2005

ETA 2023 Physical Fitness Services - Specialized Exercise and Conditioning Activities

Issued - Effective April 21, 2005

The purpose of this advisory is to clarify the distinction between physical fitness services, which are retail sales subject to retailing B&O and retail sales taxes, and therapeutic activities and instructional lessons in physical fitness, which are subject to the service and other B&O tax.

March 2005

WAC 458-40-610 Timber Excise Tax; and

WAC 458-40-680 Timber excise tax - Volume harvested - Approved scaling and grading methods - Sample scaling - Conversions

Adoption - Effective May 1, 2005

The purpose of this adoption is to determine the amount of forest excise tax due, a harverster must determine the volume of logs that he or she has harvested. The Department has adopted industry standards of scaling to make these determinations. For logs harvested in western Wahington, the Department has used the standards established by the Northwest Log Rules Advisory Group. Because this group had not adopted similar standards for harvests in eastern Washington, the current rule requires the use of scaling guidelines prepared by the United States Forest Service (USFS) for that area of the state.

Recently, the Northwest Log Rules Advisory Group adopted standards applicable to eastside logging. The amended rule replaces the USFS rules with the newer industry-standard Eastside Log Scaling Rules developed by the Northwest Log Rules Advisory Group. The only exception is that the Department will continue to require timber harvested in stumpage value areas 6 and 7 to be scaled according to the taper rules in effect at the point of origin.

ETA 574 Financial institutions incurring bad debts on contract assignments

Cancellation - Effective March 1, 2005

This advisory is cancelled because the information was incorporated consistent with recent statutory amendments in the recent revision of WAC 458-20-196 Bad debts, which became effecitve February 27, 2005.

Voter registration assistance (Secretary of State)