home home Find a law or rule home Rule Making Activities home 2006 Recent Rule and Interpretive Statements, Adoptions, and Repeals 2006 Recent Rule and Interpretive Statements, Adoptions, and Repeals

Below are rule and interpretive statement actions for the year 2006. 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:
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Rules:
WAC - Washington Administrative Code

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

December 2006

 

November 2006

 

October 2006

 

September 2006

 

August 2006

 

July 2006

 

June 2006

 

May 2006

 

April 2006

 

March 2006

February 2006

 

January 2006

 


December 2006

WAC 458-30-262 Agrcultural land valuation - Interest rate - property tax component

To provide 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 2007.

This rule is being amended to update the interest rate and the property tax component used to value farm and agricultural land classified under chapter 84.34 RCW.

 

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

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to calculate interest on deferred special benefit assessments when farm and agricultural or timber land is removed or withdrawn from classification under chapter 84.34 RCW, the Open Space Program.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  If a land has chosen to defer these assessments, when the land is subsequently removed or withdrawn from classification the deferred special benefit assessment becomes due and payable with interest.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 458-40-540 Forestland value

WAC 458-40-540 contains the forest land values, which must be adjusted annually by a statutory formula contained in RCW 84.33.140(3).  This rule has been amended to provide county assessors with property tax land values for the 2007 assessment year. 

 

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 2007. 

 

WAC 458-20-131 Gambling activities

WAC 458-20-131 (Rule 131) provides detailed information about the applicability of business and occupation (B&O), retail sales, and use tax reporting requirements of persons operating contests of chance and amusement games. It includes names of games that are considered contests of chance and those considered amusement games.  The rule directs readers to other RCWs and WACs for additional information on several issues including non-profit fundraising, coin-operated games, which are not amusement games, and for sales of foods and beverages.

Rule 131 has been revised to recognize statutory changes.  The name of the rule has been changed from “Games of chance” to “Gambling activities” to more accurately describe the contents.  Changes include new tax classifications that apply to contests of chance income (less than $50,000 and $50,000 or more) and parimutuel wagering income.  Reporting instructions for periods prior to April 1, 1999 have been removed.

 

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

In order to take certain tax credits, deferrals, and exemptions ("tax adjustments"), taxpayers must file an annual survey with the Department of Revenue (the "Department") containing information about their business activities and employment.  This rule explains the survey requirements for the various tax adjustments.  This rule also explains who is required to file an annual survey, how to file a survey, and what information must be included in the survey.

The Department adopted WAC 458-20-268—Annual Surveys for Certain Tax Adjustments to incorporate provisions from the following: (a) chapter 2, Laws of 2004, (b) chapter 25, Laws of 2004, (c) chapter 513, Laws of 2005, (d) chapter 514, Laws of 2005, (e) chapter 112, Laws of 2006, (f) chapter 177, Laws of 2006, (g) chapter 178, Laws of 2006, (h) chapter 300, Laws of 2006, and (i) chapter 354, Laws of 2006.  These provisions require completion of an annual survey by a person claiming the following tax adjustments:

  • B&O tax credit for research and development spending under RCW 82.04.4452,
  • Rural counties sales and use tax deferral under chapter 82.60 RCW,
  • High technology sales and use tax deferral under chapter 82.63 RCW,
  • Sales and use tax deferral for biotechnology product manufacturing under chapter 82.75 RCW,
  • Sales and use tax deferral for dairy product manufacturing, seafood product manufacturing, and fresh fruit and vegetable processing under chapter 82.74 RCW,
  • B&O tax exemption for dairy products under RCW 82.04.4268, seafood products under RCW 82.04.4269, and fruits and vegetables under RCW 82.04.4266,
  • B&O tax credit for aerospace preproduction development under RCW 82.04.4487,
  • Reduced B&O tax rate for certain FAR part 145 certificated repair stations under RCW 82.04.250(3),
  • B&O tax credit for customized employment training under RCW 82.04.449, and
  • Reduced B&O tax rates for timber products under RCW 82.04.260(12). 

 

ETA's cancelled effective December 29, 2006

  • ETA 21.12.134 Value of materials used by producer in performance of public road contract
  • ETA 27.04.194 Testing and Engineering services by out-of-state corporation
  • ETA 58.04.214 Marketing association: Seller or agent
  • ETA 98.12.134 Overhead costs in computing value on a cost basis
  • ETA 208.04.173 Sale of abrasives and masking tape for use in the performance of an automobile painting contract
  • ETA 210.08.187 Coin operated ski waxing and bowling ball polishing machines
  • ETA 213.04.173 Distinction between "manufacturing" and "altering" activities
  • ETA 238.08.12.130 Buildings sold exclusive of the land upon which they are situated
  • ETA 286.04.193 Freight forwarders
  • ETA 318.04.106/211 Sales and/or trade-ins of tangible personal property from rental inventory
  • ETA 415.12.178 Use tax on private automobiles acquired while a nonresident
  • ETA 489.04.170 Lessee as speculative builder
  • ETA 569.61.411/412 REET - Documentation of transfers by inheritance - Documentation of transfers to and from trusts
  • ETA 570.61.080 REET - Dual signature - utility rights-of-way or easements – counties

 


 

November 2006

ETA 2037 Substantial Underpayment Penalty

 

Issuance - Effective November 8, 2006

The Department of Revenue has issued Excise Tax Advisory 2037.32.228 Substantial Underpayment Penalty (ETA 2037).

Chapter 256, Laws of 2006, changed the penalties related to tax assessments by amending RCW 82.32.090(2).  Prior to July 1, 2006, the law imposed a 5% penalty anytime the Department issued an assessment of underpaid taxes.  This penalty applied regardless of the amount of the underpayment.  Effective July 1, 2006, the 5% penalty applies only when there is a substantial underpayment of taxes due.  The law defines substantial underpayment as the payment of “less then eighty percent of the amount of tax determined by the department to be due for all types of taxes included in, and for the entire period of time covered by, the department’s examination, and the amount of underpayment is at least one thousand dollars.”  The substantial underpayment penalty is imposed only when both tests are satisfied. 

The purpose of this ETA is to explain how the Department will determine whether the 80% threshold is met.

 

WAC 458-20-22802 Electronic funds transfer

RCW 82.32.080 requires that certain taxpayers remit payment of their combined excise tax return liability via “electronic funds transfer” (EFT).  RCW 82.32.085 requires that the transfer be completed so that the state receives collectible funds on or before the next banking day following the tax return due date.  WAC 458-20-22802 Electronic funds transfer (Rule 22802) explains the electronic funds transfer (EFT) process.

The rule currently explains that an EFT is due on or before 5:00 p.m., Pacific time, on the banking day following the tax return due date.  Chapter 256, Laws of 2006, (HB 2671), provides that if a taxpayer uses the automated clearinghouse (ACH) debit procedure for an EFT, the payment will be deemed to have been received timely if the taxpayer initiates the transfer on or before 11:59 p.m. Pacific time on the return due date with a payment effective date on or before the next banking day after the due date.  The Department amended Rule 22802 to recognize this change.  Minor formatting and editing changes were also made to provide information in a more useful manner.

 

WAC 458-20-255 Carbonated beverage syrup tax

WAC 458-20-255 (Carbonated beverage syrup tax) explains the carbonated beverage syrup tax as imposed by chapter 82.64 RCW.  The carbonated beverage syrup tax is an excise tax on the number of gallons of carbonated beverage syrup sold in this state, for use in producing carbonated beverages.  The rule has been amended to reflect chapter 245, Laws of 2006 (SSB 6533), which provides a business and occupation tax credit.  This credit is effective, to buyers using the syrup to made carbonated beverages, as of July 1, 2006.

 

ETA 2012r1 Manufacturers' Machinery and Equipment Exemption

 

Issuance - Effective November 8, 2006

The Department of Revenue has issued a new Excise Tax Advisory 2012-10S.08.12.13601 Manufacturers’ Machinery and Equipment — Research and Development (ETA 2012-10S), and revised ETA 2012.08.12.13601 Manufacturers’ Machinery and Equipment Exemption (ETA 2012).

The Department has issued a series of Excise Tax Advisories (ETAs) to address questions regarding the retail sales and use tax exemption provided by RCW 82.08.02565 and 82.12.02565, commonly referred to as the manufacturers’ machinery and equipment exemption (M&E exemption).  This advisory, ETA 2012-10S, is issued to address the application of the M&E exemption to a research and development (R&D) operation. 

ETA 2012 provides a list of the issues covered by this series, and has been updated to recognize this new supplement.

 

ETA 2012-10S Manufacturers' Machinery and Equipment Exemption--Research and Development

 

Issuance - Effective November 8, 2006

The Department of Revenue has issued a new Excise Tax Advisory 2012-10S.08.12.13601 Manufacturers’ Machinery and Equipment — Research and Development (ETA 2012-10S), and revised ETA 2012.08.12.13601 Manufacturers’ Machinery and Equipment Exemption (ETA 2012).

The Department has issued a series of Excise Tax Advisories (ETAs) to address questions regarding the retail sales and use tax exemption provided by RCW 82.08.02565 and 82.12.02565, commonly referred to as the manufacturers’ machinery and equipment exemption (M&E exemption).  This advisory, ETA 2012-10S, is issued to address the application of the M&E exemption to a research and development (R&D) operation. 

ETA 2012 provides a list of the issues covered by this series, and has been updated to recognize this new supplement.

 

ETA 2036 Computing Leasehold Excise Tax at Public Marinas

 

Issuance Date - November 28, 2006

The Department of Revenue has issued Excise Tax Advisory 2036.29A. Computing Leasehold Excise Tax at Public Marinas (ETA 2036).

The Leasehold Excise Tax (LET) is imposed on private interests in publicly owned real or personal property.  The LET is “in lieu” of the property tax and intended to provide equity in taxation of all property.  This advisory provides public marinas with an acceptable formula to compute the amount of LET the marinas as lessors are required to collect from lessees.  This formula uses a square footage formula in conjunction with rental rates in calculating the LET due. 

 

WAC 458-50-150, 160, 170, 180, 190 Intangible Personal Property Exemption

 

The Department is adopting five new rules to clarify the scope of RCW 84.36.070, which is an exemption of intangible personal property from property taxation.  The rules also will assist taxpayers, the Department, and assessors in consistently applying the exemption.  These new rules are:
     WAC 458-50-150 Intangible personal property exemption—Introduction.
     WAC 458-50-160 Exempt intangible property distinguished from other intangibles.
     WAC 458-50-170 Valuation principles.
     WAC 458-50-180 Appraisal practices relating to valuing intangible personal property.
     WAC 458-50-190 Valuation of particular assets.

The Department is also revising one rule in chapter 458-12 WAC, Rules for Assessors, and one rule in chapter 458-16 WAC, Exemptions, to reference these new rules. 

 

WAC 458-12-005 Definition--Property--Personal

 

The Department is adopting five new rules to clarify the scope of RCW 84.36.070, which is an exemption of intangible personal property from property taxation.  The rules also will assist taxpayers, the Department, and assessors in consistently applying the exemption.  These new rules are:
     WAC 458-50-150 Intangible personal property exemption—Introduction.
     WAC 458-50-160 Exempt intangible property distinguished from other intangibles.
     WAC 458-50-170 Valuation principles.
     WAC 458-50-180 Appraisal practices relating to valuing intangible personal property.
     WAC 458-50-190 Valuation of particular assets.

The Department is also revising one rule in chapter 458-12 WAC, Rules for Assessors, and one rule in chapter 458-16 WAC, Exemptions, to reference these new rules. 

 

WAC 458-16-115 Personal property exemptions for household goods, furnishings, and personal effects, and for the head of a family

 

The Department is adopting five new rules to clarify the scope of RCW 84.36.070, which is an exemption of intangible personal property from property taxation.  The rules also will assist taxpayers, the Department, and assessors in consistently applying the exemption.  These new rules are:
     WAC 458-50-150 Intangible personal property exemption—Introduction.
     WAC 458-50-160 Exempt intangible property distinguished from other intangibles.
     WAC 458-50-170 Valuation principles.
     WAC 458-50-180 Appraisal practices relating to valuing intangible personal property.
     WAC 458-50-190 Valuation of particular assets.

The Department is also revising one rule in chapter 458-12 WAC, Rules for Assessors, and one rule in chapter 458-16 WAC, Exemptions, to reference these new rules. 

 


 

October 2006

WAC 458-20-267 Annual reports for certain tax adjustments

Adoption - Effective October 22, 2006

Annual reports for certain tax adjustments - In order to take certain tax exemptions, credits, and rates ("tax adjustments"), taxpayers must file an annual report with the Department of Revenue detailing employment, wages, and employer-provided health and retirement benefits per job at the manufacturing site.

This is a new rule incorporating provisions of chapter 1, Laws of 2003 2nd special session, chapter 24, Laws of 2004, chapter 240, Laws of 2004, and chapter 301, Laws of 2005. These provisions impose the annual reporting requirement for taking the tax adjustments provided to the aerospace manufacturing, aluminum manufacturing, electrolytic processing, and solar electric manufacturing industries. This rule explains who is required to file annual reports, how to file reports, and what information must be included in the report.

 

WAC 458-18-220 Refunds - Rate of Interest

This rule provides the rate of interest that will be included when property taxes paid in 2006 are refunded in subsequent years. The rates in interest reflected in this rule are included when property taxes are refunded. The rates are shown in chronological order with reference to the year in which the property taxes were paid. The rule is being revised to provide the rate of interest for treasury bill auction year 2006, which is used as a basis for refunding property taxes paid in 2007 and refunded in a subsequent year.

 

ETA 2033 B&O Tax Exemption for Property managers (RCW 82.04.394)-On-Site Personnel Working at Multiple Properties

RCW 82.04.394 provides an exemption from the business and occupation (B&O) tax for amounts received by a property management company from the owner of a property for gross wages and benefits paid to on-site personnel. There are several conditions that must exist for the exemption to apply.

This advisory clarifies the statutory requirement that “[t]he on-site personnel is a person that works primarily at the owner’s property. The advisory explains that nothing prohibits on-site personnel from performing services at multiple properties owned by the same owner. If the on-site personnel work at multiple properties owned by different owners, however, then the exemption is only available if a majority (more than 50%) of the services are performed for a single owner. In such a case, the exemption would apply only to the extent of that single owner's share of the on-site personnel's wages and benefits.

 

ETA 2032r1 Cost Apportionment - Treatment of Costs Incurred for Multiple Purposes

 

Issuance - Effective October 19, 2006

ETA 2032.04.194 (First Revision)  Cost Apportionment – Treatment of Costs Incurred for Multiple Purposes.   WAC 458-20-194 Doing Business Inside and Outside the State (Rule 194) specifies how multi-state businesses providing services subject to the "service and other activities" and certain other B&O tax classifications apportion their income.  Businesses that apportion under RCW 82.04.460(1) must use separate accounting, if it is accurate.  If separate accounting is not accurate, cost apportionment must be used.  As a general rule, costs of producing income not apportioned under RCW 82.04.460(1) are not relevant to the cost apportionment calculation provided in Rule 194.  Rule 194 explains that shared costs (those supporting both apportionable and nonapportionable activities) must, however, be included in the cost apportionment formula without segregating the service portion of the costs.  Rule 194 does provide for the limited use of alternative methods of allocating costs.  This ETA identifies a scenario where an alternative method of cost apportionment may be appropriate.

The purpose of this revision is to correct an editing error.  The term “proscribed” has been replaced with “prescribed.”



 

September 2006

WAC 458-16-180 Cemeteries

Adoption - Effective October 22, 2006

This rule explains the property tax exemption available under RCW 84.36.020 to public burying grounds and cemeteries. The rule was updated so that it more adequately informs owners of public burying grounds and cemeteries about their eligibility to receive a property tax exemption under RCW 84.36.020.

 

WAC 458-61A-211 Mere change in identity or form - Family corporations and partnerships

Adoption - Effective October 26, 2006

A transfer of real property is exempt from the real estate excise tax if it consists of a mere change in identity or form of ownership of an entity. This rule explains that the exemption is not limited to transfers involving corporations and partnerships, and includes transfers of trusts, estates, associations, limited liability companies and other entities. The rule explains when a mere change in form or identity where no change in beneficial ownership occurs and provides examples.

The Department amended this rule to make an edit change in the example provided in Subsection (4)(b) so that the entity names used in the example read correctly throughout.


 

August 2006

WAC 458-20-270 Telephone program excise tax rates

Adoption - Effective September 2, 2006

Under RCW 43.20A.725 and 80.36.430, 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 department in the prior calendar year. The Department retains no discretion in the determination of these tax rates, the amount of which is explicitly dictated by the statutory formulas and inputs provided to the department.

The Department has revised WAC 458-20-270 to provide these tax rates for the July 1, 2006 through June 30, 2007 fiscal year. WAC 458-20-270 was previously revised as an emergency rule to provide these rates by the required July 1, 2006 effective date. This action will adopt a permanent rule.

The tax rates being adopted in this permanent rule are the same as those in the emergency rule.

 

ETA 2032 Cost Apportionment - Treatment of Costs Incurred for Multiple Purposes

Issuance - Effective August 3, 2006

WAC 458-20-194 Doing Business Inside and Outside the State (Rule 194) specifies how multi-state businesses providing services subject to the "service and other activities" and certain other B&O tax classifications apportion their income. Businesses that apportion under RCW 82.04.460(1) must use separate accounting, if it is accurate. If separate accounting is not accurate, cost apportionment must be used.

As a general rule, costs of producing income not apportioned under RCW 82.04.460(1) are not relevant to the cost apportionment calculation provided in Rule 194. Rule 194 explains that shared costs (those supporting both apportionable and nonapportionable activities) must, however, be included in the cost apportionment formula without segregating the service portion of the costs. Rule 194 does provide for the limited use of alternative methods of allocating costs. The Department has been asked whether it would consider an alternative apportionment method under Rule 194(4)(i) if it can be demonstrated that including shared costs results in a cost apportionment calculation that does not fairly reflect the taxpayer’s business activity in Washington . This ETA identifies a scenario where an alternative method of cost apportionment may be appropriate.

 

WAC 458-20-24001 Sales and use tax deferral - Manufacturing and research/development activities in rural counties - Applications filed after March 31, 2004

Adoption - Effective September 3, 2006

WAC 458-20-24001A Sales and use tax deferral - Manufacturing and research/development activities in rural counties - Applications filed prior to April 1, 2004

Adoption - Effective September 3, 2006

Chapter 82.60 RCW establishes a sales and use tax deferral program. The purpose of the program is to promote economic stimulation, create employment opportunities, and reduce poverty in certain areas of the state. The legislature established this program to be effective solely in those areas and under circumstances where the deferral is for investments that result in the creation of a specified minimum number of jobs or investment for a qualifying project.

These rules explain the sales and use tax deferral program’s eligible area criteria, hiring requirements, reporting and monitoring procedures, and tax repayment requirements. They also explain the application procedure and review process, how the deferral certificate is to be used, and the record-keeping requirements of the deferral program.

The Department is proposing a revision to these rules to incorporate provisions of chapter 25, Laws of 2004 and chapter 142, Laws of 2006. These provisions:

  • Extend the expiration date of the deferral program to July 1, 2010 ;
  • Require a recipient of the deferral to complete an annual survey;
  • Revised the definitions of eligible area and eligible investment project; and
  • Expanded the definition of manufacturing for purposes of the deferral program to include the conditioning of vegetable seed.

Rule 24001 is being revised to address the deferral program as it applies to persons who file applications after March 31, 2004 . Information addressing the deferral program for the period of August 1, 1999 through March 31, 2004 is being moved from Rule 24001 to Rule 24001A.

 

WAC 458-20-243 Litter tax

Adoption - Effective September 23, 2006

Chapter 82.19 RCW imposes a litter tax on manufacturers, wholesalers, and retailers of certain products. WAC 458-20-243 (Rule 243) provides detailed information about litter tax, including the measure of the tax, the products to which the tax applies, and specific exemptions from the tax. Rule 243 has been revised to recognize statutory changes. These changes include requiring taxpayers to report litter tax on each excise tax return filed, instead of only the last tax return of the year. The rule now recognizes exemptions for food and beverages sold for consumption indoors on the seller's premises and certain sales made by caterers. Definitions for some items, such as soft drinks, have been updated to reflect Washington ’s adoption of Streamlined Sales and Use Tax Agreement definitions.

The revised Rule 243 also reflects a change to the tax reporting instructions for publishers of newspapers and magazines.

This rule provides that the measure of the litter tax for these publishers is the gross proceeds from the sale of newspapers and magazines, which does not include advertising income. The rule previously provided that the measure of the litter tax was the same as specified for B&O tax purposes, which is the gross income from the publishing business including advertising income.

 

WAC 458-40-610 Timber excise tax - definitions

Adoption - Effective September 23, 2006

This rule provides definitions for how a harvester must calculate the volume and stumpage value of harvested timber. The definition of "harvesting and marketing costs" has been revised to clarify that costs not directly and exclusively associated with harvesting merchantable timber, such as attorney fees or evaluation fees associated with maintaining an option of land conversion, are not harvesting and marketing costs.

 

WAC 458-30-335 Rating system - Procuedure to establish; and WAC 458-30-340 Rating system - Adoption - Notice to owner - Loss of classification

Repeals - Effective September 24, 2006

WAC 458-30-330 Open space plan and public benefit rating system - Authorization and procedure to establish - Adoption - Notice to owner - Valuation

Adoption - Effective September 24, 2006

RCW 84.34.055 enables a county legislative authority to establish an open space plan, public benefit rating system, and valuation schedule for land classified as open space. WAC 458-30-330 explains the factors that must be considered when such a plan and rating system are established, includes a nonexclusive list of recognized sources used in determining open space priorities, and outlines the actions required after and effects of the approval of an open space plan and public benefit rating system. The rule has been revised to recognize 2005 legislation. The content of WAC 458-30-335 and 458-30-340 has been incorporated and these two rules are being repealed.

 

WAC 458-20-24003 Tax incentives for high technology businesses

Adoption - Effective September 31, 2006

This rule explains the tax incentives, contained in chapter 82.63 RCW and RCW 82.04.4452, which apply to businesses engaged in research and development or pilot scale manufacturing in Washington in five high technology areas: Advanced computing, advanced materials, biotechnology, electronic device technology, and environmental technology. The rule has been amended to recognize 2004 and 2005 legislation. Information was added to clarify the application of these incentives, and the rule was restructured into a question and answer format to provide the information in a more useful manner.


July 2006

WAC 458-61A-207 Bankruptcy

Adoption - Effective August 7, 2006

This rule explains the exemption from real estate excise tax for transfers of real property under confirmed chapter 11 or confirmed chapter 12 bankruptcy plans. The Department amended this rule to make minor editing changes to clarify the existing language in the rule. These editing changes do not change the effect of the previous version of this rule.

 

ETA 2016 (Second Revision) Staffing Companies

Issuance - Effective July 7, 2006

The previous version of this ETA provided guidance to staffing companies and professional employer organizations (PEOs) regarding their business and occupation (B&O) and retail sales tax reporting responsibilities in light of the Washington State Supreme Court's decision in City of Tacoma v. William Rogers Company Inc., 149 Wn.2d 169, 60 P.3d 79(2002). The guidance for PEOs has been removed from this ETA because SSB 6671 (Chapter 301, Laws of 2005) provides specific tax-reporting requirements for PEOs.

 

WAC 458-40-690 Timber excise tax - Credit for property tax

Repeal - Effective August 31, 2006

This rule is no longer needed because chapter 177, Laws of 2004 (Engrossed Substitute House Bill 2693) cnaged the law so that standing timber located on public land that is purchased by a private person is exempt from property tax. The Department had retained therule until this time in case someone with a past claim for refund or credit wanted to file for the credit or claim a refund.

 

WAC 458-20-273 Renewable Energy System Cost Recovery

Adoption - Effective August 31, 2006

This rule is new and is to effectuate new legislation promoting the use and manufacture of alternative renewable energy systems in the state of Washington through the development of a customers' cost recovery incentive payments program with a corresponding credit to participating light and power businesses. Specifically a credit of up to $2,00 annually will be paid to customers for measured electric generation from qualified solar, wind and anaerobic digester energy systems. The light and power businesses pay the incentive payments to their qualifying customers and then receive a credit equal to the amount of payments made on their public utility tax. The amount of payments one light and power business may make is limited by the higher of $25,000 or 0.25% of the business' taxable power sales due under RCW 82.16.020(1)(b). Participation by the light and power businesses in this program is discretionary.


June 2006

Chapter 458-14 WAC, Boards of Equalization

Adoption - Effective July 15, 2006

The Department has amended these rules to incorporate changes in legislation that have occurred since the rules were last adopted. These rules have also been amended to provide clearer guidance for assessors, board members, and taxpayers, based on experience with the existing rules over the past few years. This rule making brings these rules into conformity with current law and provide guidance to assessors, board members, and taxpayers with respect to the operation of the boards.

 

ETA 2002 - (8th Revision) Low-density light and power utility deduction

Issued - Effective June 19, 2006

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

 

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

Adoption - Effective July 1, 2006

This rule 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 second half of 2006. The rule also redefines the "Volume per Acre " harvest adjustment classes for the Eastside (SVA 6 & 7) to simplify the reporting. Classes 2 and 3 have been combined into a single class 2 for the harvesting of 8,000 MBF per acre or less.


May 2006

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

Emergency adoption - Effective May 26, 2006

This rule contains the stumpage values used by harvesters of timber to calculate the timber excise tax. The Department discovered that the rule to be used during the first half of 2006 inadvertently included some incorrect stumpage values in the tables for stumpage value areas 4-8. The Department previously revised the rule on an emergency basis to provide correct values. The Department is again adopting this revised rule on an emergency basis because the first emergency filing will expire before the close of the first half of 2006.

 

WAC 458-20-250 Solid waste collection tax

Adoption - Effective June 26, 2006

This rule is amended to update the information about the solid waste collection tax and to remove information that is addressed in WAC 458-20-272 (see below).

 

WAC 458-20-272 Tire fee - Core deposits or credits

Adoption - Effective June 26, 2006

Substitute House Bill 2085, 2005 Regular Session, imposed a tire fee on the retail sale of new replacement tires. This rule is a new rule that explains the seller's responsibility for collecting the fee from the buyer, how the fee is reported, and what tires are subject to the fee. This rule incorporates, updates, and clarifies information about special provisions in law for battery core charges and core deposits, currently addressed in WAC 458-20-250 (Solide waste collection tax).

 

ETA 2024 (First Revision) Storing, inspecting, testing, and labeling of canned salmon

Issued - Effective May 26, 2006

The purpose of this ETA 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. This advisory has been revised to recognize provisions of Chapter 354, Laws of 2006, which provides a specific B&O tax rate to persons inpsecting, testing, labeling, and storing salmon owned by another person. This tax rate becomes effective July 1, 2006.

 

WAC 458-20-270 Telephone program excise tax rates

Emergency adoption - Effective July 1, 2006

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 rule provides those rates.


April 2006

ETA 2030 Agricultural Burning Exemption (Prior to July 1, 2005)

Issued - Effective April 28, 2006

This ETA has been issued to provide guidelines for determining whether equipment is used "more than half of the time" in an activity qualifying for the agricultural burning exemption provided by RCW 82.08.840 and 82.12.840. It also explains how the review period is established and how the value of the equipment is determined. It is important to note that these guidelines pertain only to the agricultural burning exemption before the law change effective July 1, 2005.

 

ETA 2031 Camping Clubs Receiving Initiation Fees and Dues Income

Issued - Effective April 28, 20060

This ETA has been issued to explain that for purposes of determining whether income is deductible as bona fide initiation fees or dues, a camping club must first show that it receives some income from dues and/or initiation fees solely for social benefits and not for services rendered. It explains that the fact that a camping club may have barbeques or other events for its members at no separate charge does not demonstrate that the member pays a portion of his or her dues for social benefits.


March 2006

Chapter 458-57 WAC, Estate and Transfer Tax

Adoption - Effective April 9, 2006

Chapter 458-57 WAC provides tax reporting information for the taxpayers who must file an estate tax return for a decedent's estate. The six current rules are amended to reflect the 2005 Supreme Court ruling in Hemphill v. State of Washington, Dept. of Rev., 153 Wa.2d 544, 105 P.3d 391 (2005).

Seven new rules are adopted to implement the new Washington estate tax that became effective May 17, 2005. The new rules clarify the nature of the new tax, property subject to the tax, the Washington qualified terminable interest property election, the new method of estate tax apportionment, filing dates, refunds, the new farm deduction, and escheat estates and absentee distributee property.


February 2006

ETA 2028 Foreign Trade Zones

Issued - Effective February 1, 2006

The purpose of this advisory is to explain Washington's right to impose tax on businesses operating in a Foreign Trade Zone located within the state.

 

WAC 458-50-040 Annual reports - Time of filing - Extension of time

Adoption - Effective March 11, 2006

This rule is revised to recognize that RCW 84.12.230 authorizes the Department to extend the date by which an annual report must be filed by up to sixty days. The rule previously explained that the Department may extend the due date by up to thirty days.

 

WAC 458-50-070 Annual assessment - Procedure

Adoption - Effective March 11, 2006

This rule is revised to recognize that a petition for a hearing relating to the value of operating property must be filed within the first 10 working days of July. The rule previously explained that it must be filed on or before July 9. The rule is also revised to explain that the Department must appoint a time for a hearing within 10 working days of the hearing request time period. The rule previously explained that it must be appointed between the 10th and 25th of July. The reference to WAC 458-50-010 is removed (that rule no longer exists) and the reference to RCW 84.12.200(16) is changed to RCW 84.12.200(12).

 

WAC 458-50-100 Apportionment of operating property to the various counties and taxing districts

Adoption - Effective March 11, 2006

This rule is reivsed to eliminate subsection (8), which discussed the assessment of steamboat companies. The Department's Property Tax Division no longer assess operating properties of steamboat companies.


January 2006

PTA 11.1.2006 Application of the Federal Servicemembers' Civil Relief Act and the Washington Service Members' Civil Relief Act to Property Tax Administration

Issuance - Effective January 11, 2006

This advisory explains the relief available to active military personnel and their families.

 

PTA 11.0.2003 Application of the Soldiers' and Sailers' Relief Act of 1940 to Property Tax Administration

Cancellation - Effective January 11, 206

The new advisory (PTA 11.1.2006) updates references from the Soldiers' and Sailors' Civil Relief Act of 1940 to the Servicemembers' Civil Relief Act as amended effective December 19, 2003.

 

PTA 14.0.2006 Transfer of land classified under chapter 84.33 or 84.34 RCW in trust to the United States by a federally recognized Indian Tribe

Issuance - Effective January 11, 2006

This advisory clarifies the guidelines for collection of compensating or additional tax when land classified under chapter 84.33 RCW or chapter 84.34 RCW is transferred in trust to the United States.

 

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

Emergency adoption - Effective January 26, 2006

This rule contains the stumpage values used by harvesters of timber to calculate the timber excise tax. The Department has discovered that the rule to be used during the first half of 2006 (filed December 22, 2005, as WSR 06-02-005) inadvertently included some incorrect stumpage values in the tables for stumpage value areas 4-8. This emergency revision provides the correct values.

 

WAC 458-20-144 Printing industry

Adoption - Effective March 2, 2006

This rule explains the B&O and retail sales tax reporting responsibilities of persons engaged in printing activities. Effective July 1, 2005, the Department adopted revisions to Rule 144 on an emergency basis to reflect chapter 514, Laws of 2005, which provides a B&O tax deduction and retail sales and use tax exemptions for delivery charges made for the delivery of direct mail if the charges are separately stated. This adoption incorporates the provisions of chapter 514 into the permanent Rule 144.

 

WAC 458-20-185 Tax on Tobacco Products

Emergency Adoption - Effective January 26, 2006

This rule explains the provisions of chapter 82.26 RCW. 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 Rule 185 on an emergency basis to incorporate provisions of chapter 180, Laws of 2005 (SB 6097). This legislation made significant statutory changes to chapter 82.26 RCW, including:

  • A requirement that distributors and retailers of tobacco products be licensed;
  • Requiring that licensed distributors sell only to licensed retailers;
  • Changing the measure of the tax from “wholesale value” to “taxable sales value”;
  • Imposing recordkeeping requirements on persons that transport tobacco products; and

Adding new enforcement provisions and transferring enforcement to the Liquor Control Board.

 

WAC 458-20-186 Tax on Cigarettes

Emergency Adoption - Effective January 26, 2006

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 Rule 186 on an emergency basis to incorporate provisions of chapter 180, Laws of 2005 (SB 6097). This legislation made a number of changes with respect to the Tobacco Products Tax program in chapter 82.26 RCW, and amended chapter 82.24 RCW to provide that any person possessing both a cigarette license and a tobacco products license is subject to suspension and revocation of both licenses for violation of either chapter 82.24 or 82.26 RCW.

 

Cancellation of Excise Tax Advisories

The Department of Revenue has cancelled the following excise tax advisories (ETAs). A determination as to whether income associated with the activities addressed in these ETAs should be based on the provisions of WAC 458-20-194 (Doing business inside and outside the state) as amended effective January 1, 2006 .

ETA 019.04.194 Engaging in Business within the State of Washington

 ETA 269.04.194 Out-of-State Engineering Firm Performing Services in this State which are Incidental to those Performed by its Out–of-State Office

 ETA 270.04.194 Interest Income Derived from the Extension of Credit to a Party in another State by a Washington Taxpayer with Business Situs in Both States

 ETA 280.04.193/194 Commissions Earned on Interstate Sales

 ETA 324.04.194/224 Application of Business and Occupation Tax to Royalty Income Earned Through Grant of Patent Privileges

 

> 2005