Below are rule and interpretive statement actions for the year 2007. 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
> Click on a month below to see what actions took place during that month.
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WAC - Washington Administrative Code
ETA - Excise Tax Advisory
PTA - Property Tax Advisory
- Recordkeeping (WAC 458-20-254)
- Tax on tobacco products (WAC 458-20-185)
- Tax on cigarettes (WAC 458-20-186)
- ETAs Cancelled Effective February 28, 2007 (17, 46, 82, 84, 131, 141, 163, 216, 345, 347, 486, 488, 490)
- Personal property exemptions for household goods, furnishings, and personal effects, and for the head of a family (WAC 458-16-115)
Brokered natural gas - Use tax (WAC 458-20-17902)
The proposed reporting instructions explaining that “starting no sooner than January of 2008, the department may eliminate the natural gas use tax return,” and the two alternatives has been removed. The current rule’s explanation that the tax is reported on a separate quarterly return is now replaced with the statutory language that the tax is to be reported on “forms and records prescribed by the department.”
Certified service providers--Compensation (WAC 458-20-277)
Is a new rule establishing certified service provider (CSP) compensation for those CSP’s performing all of a volunteer seller’s sales and use tax functions other than the obligation of the seller to remit sales and use tax on its own purchases. The rule also explains some of the roles and responsibilities of certified service providers retained by sellers in Washington.
Agricultural land valuation-Interest rate-Property Tax Component (WAC 458-30-262)
The purpose of this rule is 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). The rule is being amended to update the interest rate and property tax component used to value farm and agricultural land classified under chapter 84.34 RCW. The amendments provide information that local taxing officials need to value classified farm and agricultural land during assessment year 2008.
The Department filed a CR-105 notice of expedited rule making on October 18, 2007, with the intention of adopting a permanent rule after December 24th. (See WSR 07-21-096.) The Department still anticipates adopting a permanent rule at that time. The Department is adopting this rule, which is the same as that proposed in WSR 07-21-096, on an emergency basis at this time to satisfy RCW 84.34.065’s requirement that an adopted rule providing the rate of interest be published in the state register not later than January 1st.
Rate of inflation-Publication-Interest rate-Calculation (WAC 458-30-590)
The purpose of this rule is to provide information about the rate of inflation that is 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 owner has chosen to defer these assessments, when the land is subsequently removed or withdrawn from classification the deferred special benefit assessments become due and payable with interest. WAC 458-30-590 provides the rate of inflation used in calculating the interest that is added to the deferred amount of special benefit assessments.
The Department filed a CR-105 notice of expedited rule making on October 18, 2007, with the intention of adopting a permanent rule after December 24th. (See WSR 07-21-095.) The Department still anticipates adopting a permanent rule at that time. The Department is adopting this rule, which is the same as that proposed in WSR 07-21-095, on an emergency basis at this time to satisfy RCW 84.34.310’s requirement that an adopted rule providing the rate of inflation be published in the state register not later than January 1st.
Forestland values (WAC 458-40-540)
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 2008 assessment year.
Timber excise tax-Stumpage value tables-Stumpage value adjustments (WAC 458-40-660)
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 2008.
Food and food ingredients (WAC 458-20-244)
WAC 458-20-244 (Rule 244) 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. The Department amended this rule to make the following editing corrections:
- Adding the phrase “of the taxable items” to the second bullet point under WAC 458-20-244(5)(a), so that it reads, “The entire transaction is exempt from retail sales tax if the seller’s purchase price or sales price of the taxable items is fifty percent or less of the combined purchase price or sales price.” The phrase is implied in the section, and is being expressly included for added clarity.
- Striking the reference to “soft drinks” from the example under 458-20-244(8)(b). The reference is incongruent with the remainder of the example, which does otherwise refer to soft drinks.
Refunds - Rate of Interest (WAC 458-18-220)
To provide the rate of interest that will be included when property taxes paid in 2008 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 2007, which is used as a basis for refunding property taxes paid in 2008 that are subsequently refunded.
ETA Cancelled Effective November 30, 2007
WAC 458-30-300 Additional tax - Withdrawal or removal from classification;
WAC 458-30-330 Open space plan and public benefit rating system - Authorizationn and procedure to establish - Adoption - Notice to owner - Valuation; and
WAC 458-30-700 Designated forest land - Removal - Change in Status - Compensating tax (WAC 458-30-300, 330, 700)
To incorporate recent statutory changes into the corresponding rules. Laws of 2007 c 241 s 73 changed the name of a recognized source of open space priorities that is also listed in WAC 458-30-330. Laws of 2007 c 54 s 24 and s 25 deleted a subparagraph that contained obsolete text; these changes affect WAC 458-30-700 and 458-30-300 respectively.
Refunds (WAC 458-20-229)
WAC 458-20-229 explains the procedures relating to refunds or credits for the overpayment of taxes, penalties, or interest. It describes how to calculate the four year period and clarifies the: nonclaim statute and its consequences; definition of what constitutes a valid claim; description of required substantiation with timelines for compliance; representative’s requirement for providing a confidential information waiver; and allowable sampling procedures.
Insurance companies, including surety companies, fraternal benefit societies, fraternal fire insurance associations, beneficiary corporations or societies and Washington state health insurance pool (WAC 458-20-163)
WAC 458-20-163 explains the exemptions and deductions allowed “Insurance companies, including surety companies, fraternal benefit societies, fraternal fire insurance associations, beneficiary corporations or societies and Washington state health insurance pool.” It also states that insurance companies are subject to the retail sales or use taxes on their purchases of tangible personal property and certain services, and that they must collect sales tax on sales of tangible personal property, including salvaged property.
The Department has amended the rule to:
- Add an introductory sub-section (1) to explain the subject matter of the rule;
- Explain that RCW 82.04.322 provides a B&O tax exemption for any health maintenance organization, health care service contractor, or certified health plan in respect to premiums or prepayments that are taxable under RCW 48.14.0201; and
- Recognize that the B&O tax deduction provided by RCW 82.04.4329 for assessments paid by a member to the Washington state health insurance pool was repealed by chapter 443, Laws of 2005, effective July 1, 2006.
When tax liability arises (WAC 458-20-197)
This rule provides a general discussion of when tax liability arises for accrual and cash receipts basis taxpayers. It provides specific guidance to construction contractors and persons operating warehouses. The revised rule includes new language explaining that persons operating grain warehouses, licensed under chapter 22.09 RCW, have the choice of reporting the value proceeding or accruing from their operations on either a cash receipts or accrual basis. RCW 82.04.090.
Telephone program excise tax rates (WAC 458-20-270)
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. The Telecommunications Relay Services (TRS) and Washington Telephone Assistance Program (WTAP) tax rates are 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, 2007 through June 30, 2008 fiscal year. The TRS rate increases from nine cents to 12 cents per switched access line for the upcoming fiscal year. There is no change to the WTAP rate.
Staffing Services (WAC 458-20-274)
The Department has adopted a new rule, WAC 458-20-274 - Staffing Services. This rule recognizes the Washington Supreme Court’s decision in City of Tacoma v. William Rogers Company, Inc., 148 Wash.2d 169, 60 P.3d 79 (2002)and explains the application of business and occupation (B&O) tax, public utility tax (PUT); and the retail sales tax collection responsibilities of staffing businesses providing staffing services. This rule provides information consistent with the more exhaustive detailed “Staffing Industry Tax Guide,” which is available via the Department’s internet web site at http://dor.wa.gov/Content/DoingBusiness/BusinessTypes/Industry/default.aspx.
ETA 2039 Car Sharing Organizations
The Department of Revenue has issued Excise Tax Advisory 2039.08.211 Car Sharing Organizations (ETA 2039).
The purpose of this Excise Tax Advisory is to clarify the proper tax treatment of “carsharing” organizations. Carsharing is a system in which a fleet of cars (or other vehicles) is made available for use by members of the carshare group in a wide variety of ways. The costs and the administration of vehicle purchases, ownership, and maintenance are the responsibility of a central organizer (the Carshare Operator or CSO).
Deferral of special assessments and/or property taxes--Limitations of deferral--Interest (WAC 458-18-060)
This rule provides information on the tax obligations of persons engaging in business as a travel agent or tour operator.
Purpose of the proposal and its anticipated effects, including any changes in existing rules:
The proposed rule will clarify the rate applicable to tour operators based on 1996 legislation; permit both travel agent and tour operator income to be apportioned in the same manner as under WAC 458-20-194; provide additional information and examples on pass-throughs; and clarify the application of lodging taxes in the travel industry.
The revisions are necessary to provide current and accurate tax-reporting guidance, particularly with respect to income apportionment, pass-through treatment, and the application of lodging taxes in the travel industry.
Timber excise tax - Stumpage value area (map) (WAC 458-40-640)
WAC 458-40-640 contains the stumpage value area map establishing the stumpage value area and hauling distance zone map used by harvesters of timber to determine the proper stumpage value area and haul zone when calculating the taxable stumpage value of timber harvested from private land. This rule is revised for use during the second half of 2007.
Timber excise tax - Stumpage value tables - Stumpage value adjustments (WAC 458-40-660)
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 second half of 2007.
ETA's Cancelled Effective June 29, 2007
- ETA 144.04.193 Distributor for out-of-state manufacturer - Agent or seller
- ETA 206.08.176 Restoration of a fishing vessel in this state for exhibition purposes by and in another state
- ETA 226.08.177 Automobile sales arranged by out-of-state firm but consummated through in-state dealer
- ETA 281.04.193 Interstate mail delivery by vendor of goods sold
- ETA 344.12.145 Local use tax- Allocation when credit allocated for sales or use taxes paid another state
- ETA 386.04.159 Consignee or seller
- ETA 411.04.111 Activities performed by nonprofit associations
- ETA 481.12.178 Sales or use tax applicable to items both leased and used for personal use
- ETA 521.04.241 1982 Standard deduction – Radio and television broadcasting
Food and food ingredients (WAC 458-20-244)
RCW 82.08.0293 and 82.12.0293 provide a retail sales tax and use tax exemption for food and food ingredients. In 2004, the legislature amended these statutes to alter the definitions used to determine whether a particular food or food ingredient qualifies for the exemptions. The amendments were made in compliance with the national Streamlined Sales and Use Tax Agreement (SSUTA). Rule 244 has been amended to incorporate these statutory changes and the final interpretations adopted by the SSUTA advisory council regarding sales of food and food ingredients with utensils.
WAC 458-16-115 Personal property exemptions for household goods, furnishings, and personal effects, and for the head of a family
Explains the personal property tax exemption for household goods, furnishings, and personal effects. It also explains the exemption available to the head of a family for other taxable personal property. These exemptions are provided by RCW 84.36.110.
A constitutional amendment was approved by the voters at the November 2006 election. The amendment changed the amount of the exemption for the personal property of a head of a family from $3,000 to $15,000 and also changed the implementing statute, RCW 84.36.110. This change was effective January 1, 2007. The Department previously amended this rule on an emergency basis (WSR 07-06-017), and this action amends the permanent rule.
ETA 2016 (Third Revision) Staffing Companies
The Department of Revenue has issued a revised Excise Tax Advisory 2016.04.111 (Third Revision) Staffing Companies (ETA 2016). This ETA explains the business and occupation (B&O) and retail sales tax reporting responsibilities of staffing companies in light of the Washington State Supreme Court's decision in City of Tacoma v. William Rogers Company Inc., 148 Wn.2d 169, 60 P.3d 79 (2002).
The only change made in this revision was to change an erroneous citation for the City of Tacoma v. William Rogers Company Inc. decision. The citation of 149 Wn.2d 169, 60 P.3d 79 (2002) has been changed to 148 Wn.2d 169, 60 P.3d 79 (2002).
ETA 2002 (Ninth Revision) Low-density light and power utility deduction
The Department of Revenue has issued a revised Excise Tax Advisory 2002.16.179 Low-density light and power utility deduction (ETA 2002). This advisory 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 business to compute the amount of the deduction. The revised ETA 2002 updates the information to provide the rate to be used for the period of July 2007 through June 2008.
WAC 458-18-060 Deferral of special assessments and/or property taxes--Limitations of deferral--Interest
Explains how equity value is determined relative to the deferral of property taxes on residences of qualifying (senior or disabled) claimants. Equity value takes the interest on the deferred taxes into account. In 2006, the legislature amended the statute (RCW 84.38.100) to change the interest rate on deferred taxes from eight percent to five percent. This amendment to the rule implements the legislative change (chapter 275, Laws of 2006).
ETA 2038 Sales to the Washington State National Guard
The purpose of this ETA is to explain the tax liabilities of suppliers and contractors doing business with the Washington State National Guard. The ETA distinguishes these tax liabilities from those of persons doing business with federal agencies, such as the Department of the Army and the United States Property and Fiscal Office.
The information provided in ETA 2038 is substantially the same as that previously provided in ETA 554.04.08.17001 (ETA 554), which has been cancelled. The explanation of tax liabilities in ETA 554 was correct, but the chart in the electronic version of the document summarizing the explanation did not read correctly because of formatting errors.
WAC 458-20-167 Educational institutions, school districts, student organizations, and private schools
Explains the application of the business and occupation (B&O), retail sales, and use taxes to educational institutions, school districts, student organizations, and private schools. It also includes tax guidance for nursery schools, preschools, and child care. The rule has been amended to reflect the updated definition of “computer” and to cite the applicable statute. Language referencing a 1998 law change and providing pre-1998 tax reporting instructions has been removed.
WAC 458-20-228 Returns, payments, penalties, extensions, interest, stay of collection
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. It 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.
WAC 458-20-228 (Rule 228) 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. It 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.
The rule was amended to recognize provisions of chapter 256, Laws of 2006 (HB 2671). This legislation extended the due date for persons filing excise tax returns on a monthly basis and modified the penalty provisions of RCW 82.32.090(2).
The rule recognizes that the due date for persons filing excise tax returns on a monthly basis was extended to 25 days after the end of the month in which taxable activities occur. The due date previously was 20 days.
RCW 82.32.090(2) previously imposed a 5% penalty “whenever the Department determined that any additional tax was due,” with a total penalty of 15% being due if payment was not received by the assessment due date, and further a total penalty of 25% due if payment was not received by the 30th day following the assessment due date. The amended rule recognizes that this legislation provides that the initial 5% penalty applies only if any tax has been “substantially underpaid,” the statutory definition of which is incorporated into the rule. This legislation made no change to the imposition of the 15% and 25% penalties prescribed by RCW 82.32.090(2).
Additionally, the rule explains that RCW 82.32.105(2) provides a limited penalty waiver for a taxpayer that has timely filed and paid all tax returns due for a specific tax program for a period of 24 months immediately preceding the return for which the waiver is being requested. The rule explains that if a taxpayer has engaged in business activities for a period less than twenty-four months, the taxpayer may still be eligible for the waiver. The amended rule clarifies that even the first tax return is potentially eligible for the waiver.
ETA 2035 The Department of Revenue has issued Excise Tax Advisory Processing Perishable Meat Products .
The purpose of this ETA is to explain who is entitled to the preferential business and occupation (“B&O”) tax rate based on the Washington State Supreme Court decision, Agrilink Foods, Inc. v. Washington State Department of Revenue, 153 Wn.2d 392 (2005). The scope of this ETA is limited to manufacturers and sellers of perishable meat products sold at wholesale.
WAC 458-20-254 defines the requirements for the maintenance and retention of books, records, and other sources of information. It also addresses these requirements where all or a part of the taxpayer’s books and records are received, created, maintained, or generated through various computer, electronic, and /or imaging processes and systems. The Department amended to rule to update the information in line with the provisions of the MTC/s Model Recordkeeping and Retention Regulation and Internal Revenue Service guidelines.
WAC 458-20-185 (Rule 185) provides tax-reporting information to persons who sell, use, handle, possess, transport, store, or distribute tobacco products. The rule has been amended to update existing information and incorporate significant legislative amendments to Chapter 82.26 RCW.
The previous version of Rule 185 provided that the other tobacco products (OTP) tax “does not apply to tobacco products sold to federal government agencies . . . and a credit may be taken for the amount of tobacco products tax previously paid on such products.” These instructions are not included in the amended because the Department determined that the instructions are not authorized by current statute. As a result, a credit for taxes previously paid on tobacco products sold to federal entities is no longer allowed.
WAC 458-20-186 (Rule 186) 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 is to be paid, and the record keeping requirements. It also explains the application process for wholesale and retail cigarette vendor licenses, and the responsibilities of persons making "delivery sales" into this state. It includes references to statutory fees, bonding requirements, and explains the conditions for and process of application for reinstatement of a license following a revocation under the Administrative Procedure Act.
The rule has been amended to update existing information, incorporate recent legislative changes, and clarify that the "stamping allowance" for wholesalers is income subject to the business and occupation tax, not merely a discount on the price of the stamps.
ETAs Cancelled Effective February 28, 2007
WAC 458-16-115 Personal property exemptions for household goods, furnishings, and personal effects, and for the head of a family
WAC 458-16-115 explains the personal property tax exemption for household goods, furnishings, and personal effects. It also explains the exemption available to the head of a family for other taxable personal property. These exemptions are provided by RCW 84.36.110.
A constitutional amendment was approved by the voters at the November 2006 election. The amendment changed the amount of the exemption for the personal property of a head of a family from $3,000 to $15,000 and also changed the implementing statute, RCW 84.36.110. This change was effective January 1, 2007.
WAC 458-20-101 Tax registration and tax reporting
WAC 458-20-101 explains tax registration and tax reporting requirements, and discusses who is required to be registered and file excise tax returns. It also discusses requirements when there is a change in business ownership, when an account may be administratively closed, and the process of revocation and reinstatement of a tax reporting account.
Subsection (7) of this rule explains that a temporary revenue registration certificate may be issued to temporary businesses. Subsection (7)(a) explains what businesses qualify as temporary businesses for the purposes of registration. The Department added language to subsection (7)(b) to explain that persons making sales into Washington other than those identified in subsection (7)(a) may incur additional tax liability and need to obtain a “regular” tax registration endorsement. Readers are also referred to Rule 193 for additional information because this circumstance comes up most often with businesses located outside Washington making sales into the state.