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Below are rule and interpretive statement actions. For information regarding how these rules and interpretive statements may affect you, email us or call 1-800-647-7706. Also, see more information regarding the Department's rule making process, including rule making currently in progress and how to participate.


Pursuant to RCW 34.05.330, you have the right to petition the Department to adopt, amend, or repeal any administrative rule. Obtain a copy of the petition online, or call call 1-800-647-7706. The petition process is governed by the Office of Financial Management (chapter 82-05 WAC).


NOTE:
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Rules:
WAC - Washington Administrative Code

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

December 2008

October 2008

September 2008

July 2008

June 2008

May 2008

March 2008

January 2008




December 2008

ETA 2023r1 Physical Fitness Services-Specialized Exercise and Conditioning activities

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.  This ETA has been revised to recognize that a new ETA 2034.08.183 addresses the taxability of Yoga, Tai Chi, and Qi Gong classes.

ETA 2034 Taxability of Yoga, Tai Chi, and Qi Gong

The purpose of this advisory is to explain the tax reporting responsibilities of persons providing Yoga, Tai Chi, and Qi Gong classes.

WAC 458-18-220 Refunds-Rate of Interest

To provide the rate of interest that will be included when property taxes paid in 2009 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 2008, which is used as a basis for refunding property taxes paid in 2009 that are subsequently refunded.

WAC 458-30-262 Agricultural land valuation-Interest rate-Property Tax Component

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 amendment provides information that local taxing officials need to value classified farm and agricultural land during assessment year 2009.

WAC 458-30-590 Rate of inflation-Publication-Interest rate-Calculation

Special benefit assessments for certain local improvements to farm and agricultural or timber land classified under chapter 84.34 RCW, the Open Space Program, 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 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.  This rule is being amended to provide the rate of inflation for 2009 as required by RCW 84.34.310.

WAC 458-61A-102 Real Estate Excise Tax-Definition

These rules define what is, and is not, considered a “sale” of real property for purposes of the Real Estate Excise Tax (REET), and explain exemptions from REET and the documentation requirements necessary to claim those exemptions.  These rules have been amended as follows:

  • WAC 458-61A-202 – recognizes SSB 6851 (chapter 269, Laws of 2008), which identifies specific documentation requirements in order to receive an exemption for the community property interest of a decedent that is transferred to a surviving spouse or surviving domestic partner;
  • WAC 458-61A-203 – recognizes 2SHB 3104 (chapter 6, Laws of 2008), which expanded the rights, privileges, obligations, and liabilities of domestic partners and domestic partnerships registered under chapter 26.60 RCW; and
  • WAC 458-61A-102 – recognizes: 2SHB 3104 (chapter 6, Laws of 2008); and E2SHB 1621 (chapter 116, Laws of 2008), which provides a REET exemption for the sale of a manufactured/mobile home community to certain organizations, including but not limited to qualified tenant organizations, local governments, or nonprofit community or neighborhood-based organizations.   

WAC 458-61A-202 Real Estate Excise Tax-Inheritance or Devise (describes requirements for claiming exemption from REET under this rule)

These rules define what is, and is not, considered a “sale” of real property for purposes of the Real Estate Excise Tax (REET), and explain exemptions from REET and the documentation requirements necessary to claim those exemptions.  These rules have been amended as follows:

  • WAC 458-61A-202 – recognizes SSB 6851 (chapter 269, Laws of 2008), which identifies specific documentation requirements in order to receive an exemption for the community property interest of a decedent that is transferred to a surviving spouse or surviving domestic partner;
  • WAC 458-61A-203 – recognizes 2SHB 3104 (chapter 6, Laws of 2008), which expanded the rights, privileges, obligations, and liabilities of domestic partners and domestic partnerships registered under chapter 26.60 RCW; and
  • WAC 458-61A-102 – recognizes: 2SHB 3104 (chapter 6, Laws of 2008); and E2SHB 1621 (chapter 116, Laws of 2008), which provides a REET exemption for the sale of a manufactured/mobile home community to certain organizations, including but not limited to qualified tenant organizations, local governments, or nonprofit community or neighborhood-based organizations.   

WAC 458-61A-203 Real Estate Excise Tax-Community property, dissolution of marriage, legal separation, decree of invalidity

These rules define what is, and is not, considered a “sale” of real property for purposes of the Real Estate Excise Tax (REET), and explain exemptions from REET and the documentation requirements necessary to claim those exemptions.  These rules have been amended as follows:

  • WAC 458-61A-202 – recognizes SSB 6851 (chapter 269, Laws of 2008), which identifies specific documentation requirements in order to receive an exemption for the community property interest of a decedent that is transferred to a surviving spouse or surviving domestic partner;
  • WAC 458-61A-203 – recognizes 2SHB 3104 (chapter 6, Laws of 2008), which expanded the rights, privileges, obligations, and liabilities of domestic partners and domestic partnerships registered under chapter 26.60 RCW; and
  • WAC 458-61A-102 – recognizes: 2SHB 3104 (chapter 6, Laws of 2008); and E2SHB 1621 (chapter 116, Laws of 2008), which provides a REET exemption for the sale of a manufactured/mobile home community to certain organizations, including but not limited to qualified tenant organizations, local governments, or nonprofit community or neighborhood-based organizations.   

WAC 458-20-15501 Computer hardware, computer software, information service, and computer services

The Department is adopting this rule, WAC 458-20-15501, to update and further explain beyond WAC 458-20-155 the application of the business and occupation (B&O), retail sales, and use taxes as they apply to persons providing information or computer services, and persons who manufacture, develop, process, or sell information, software, or computer programs. This rule also recognizes that RCW 82.12.020(1)(b) now excludes software provided free of charge from the use tax.

WAC 458-30-200 Definitions

The Department has amended WAC 458-30-200 on an emergency basis to clarify that:
(1)  It is not necessary to breed animals to qualify for the “farm and agricultural land” classification; and (2)The sale of forage through the grazing of livestock, including equines, constitutes the sale of an agricultural product for purposes of Chapter 84.34 RCW.

WAC 458-40-540 Forestland values - 2009

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 forest land values for the 2009 assessment year. 

WAC 458-20-279 Clean Alternative Fuel Vehicles and High Gas Mileage Vehicles

This is a new rule, WAC 458-20-279 Clean Alternative Fuel Vehicles and High Gas Mileage Vehicles, which explains the requirements of the following:

  • The retail sales and use tax exemptions for clean alternative fuel vehicles (RCW 82.08.809 and 82.12.809); and
  • The retail sales and use tax exemptions for high gas mileage vehicles (RCW 82.08.813 and 82.12.813).

These exemptions are effective from January 1, 2009 until January 1, 2011.

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 2009. 

 


October 2008

WAC 458-20-102 Resale Certificates

WAC 458-20-102 (Rule 102) Resale Certificates has been revised to recognize that the requirement to renew a resale certificate every four years no longer applies.  As of July 1, 2008, a resale certificate continues as long as the buyer has a “recurring business relationship” with the seller, which is defined by law as making at least one purchase from the seller within a period of 12 consecutive months.   

The sample resale certificate has been eliminated from the rule, and the reader is referred to the Department’s telephone information center or web site for a certificate.

PTA 15.1.2009 Low-Income Housing Valuation

This Property Tax Advisory (PTA) provides guidance to both assessors and taxpayers in determining the true and fair market value of low-income restricted housing.  This PTA, together with the Low-Income Housing Valuation Guide that accompanies it, incorporates generally accepted appraisal practices with Washington statutory and appellate court case law. 

This document explains that appraisal theory and practice and Washington case law have held that the basis for determining the value of real property is all the factors that enter into a sale of property between a knowledgeable willing seller and a knowledgeable willing buyer who are not compelled to sell or buy.  It also explains that the restricted rents of property in a low-income housing program, as opposed to the market rents of conventional housing, are to be taken into account by the assessor when valuing the rent-restricted property.

WAC 458-20-27701 Model 2 volunteer seller--Compensation

WAC 458-20-27701 is a new rule establishing the  compensation for model 2 volunteer sellers who voluntarily collect and remit retail sales and use taxes for Washington state.  Model 2 volunteer sellers are sellers that use a certified automated system to calculate, process, and record their retail sales transactions.  The selected certified automated system must be certified by the governing board of the Streamlined Sales and Use Tax Agreement.   WAC 458-20-27701 also contains liability and administrative provisions related to model 2 volunteer sellers, and explains the qualifications for becoming a model 2 volunteer seller.


September 2008

ETA 2043 Occupational Medicine Services and the Preferential B&O Rate Under RCW 82.04.263

RCW 82.04.263 provides a preferential business and occupation (B&O) tax rate for persons engaged in the business of cleaning up radioactive waste and other byproducts of weapons production and nuclear research and development for the United States or its instrumentalities.  For the purposes of the preferential rate, “cleaning up radioactive waste and other byproducts of weapons production and nuclear research and development” means the activities of handling, storing, treating, immobilizing, stabilizing, or disposing of radioactive waste, radioactive tank waste and capsules, nonradioactive hazardous solid and liquid wastes, or spent nuclear fuel; spent nuclear fuel conditioning; removal of contamination in soils and ground water; decontamination and decommissioning of facilities; and activities integral and necessary to the direct performance of cleanup.

This Excise Tax Advisory (ETA) discusses how this preferential B&O tax rate applies to occupational medicine services.


July 2008

WAC 458-20-101 Tax registration and tax reporting

WAC 458-20-101 explains the tax registration and tax reporting requirements for businesses engaging in business activities within Washington.  WAC 458-20-217explains the administrative collection remedies and procedures available to the Department to collect unpaid and overdue tax liabilities.

These rules have been amended to conform to SSB 3104 (chapter 6, Laws of 2008).  SSB 3104 expanded the rights, privileges, obligations, and liabilities of domestic partners and domestic partnerships registered under chapter 26.60 RCW.  Theses amendments revise:

  • §(11)(b)(iii) of WAC 458-20-101 to add the phrase “or registered domestic partnership” to “marital community” and “or surviving domestic partner” to “surviving spouse.”
  • §(6)(c) of WAC 458-20-217 to add the phrase “or surviving domestic partner” to “surviving spouse,” change “the surviving spouse’s separate property” to “the separate property of the surviving spouse or surviving domestic partner,” add the phrase “or property of the domestic partnership” to “community property,” change “the spouse’s property” to “property of the surviving spouse or the surviving domestic partner,” add the phrase “or deceased domestic partner” to “deceased spouse,” and change “the deceased spouse’s estate” to “the estate of the deceased spouse or deceased domestic partner.”

WAC 458-20-217 Lien for taxes

WAC 458-20-101 explains the tax registration and tax reporting requirements for businesses engaging in business activities within Washington.  WAC 458-20-217explains the administrative collection remedies and procedures available to the Department to collect unpaid and overdue tax liabilities.

These rules have been amended to conform to SSB 3104 (chapter 6, Laws of 2008).  SSB 3104 expanded the rights, privileges, obligations, and liabilities of domestic partners and domestic partnerships registered under chapter 26.60 RCW.  Theses amendments revise:

  • §(11)(b)(iii) of WAC 458-20-101 to add the phrase “or registered domestic partnership” to “marital community” and “or surviving domestic partner” to “surviving spouse.”
  • §(6)(c) of WAC 458-20-217 to add the phrase “or surviving domestic partner” to “surviving spouse,” change “the surviving spouse’s separate property” to “the separate property of the surviving spouse or surviving domestic partner,” add the phrase “or property of the domestic partnership” to “community property,” change “the spouse’s property” to “property of the surviving spouse or the surviving domestic partner,” add the phrase “or deceased domestic partner” to “deceased spouse,” and change “the deceased spouse’s estate” to “the estate of the deceased spouse or deceased domestic partner.”

WAC 458-20-126 Sales of motor vehicle fuel, special fuels, and nonpollutant fuel

WAC 458-20-126 Sales of motor vehicle fuel, special fuels, and nonpollutant fuel provides tax reporting information to persons selling such fuels. The rule has been reorganized, and additions to the rule include: subsection titles, information relating to Legislation passed in 2007, and the Department of Revenue’s Internet site for locating forms.

WAC 458-20-150 Optometrists, ophthalmologists, and opticians

WAC 458-20-150 Optometrists, ophthalmologists, and opticians explains the application of the business and occupation (B&O) tax, retail sales tax, and use tax to the business activities of optometrists and similar health care providers. It also explains the tax liability resulting from providing professional services and the sale of prescription lenses, frames, and other optical merchandise.

The Department has amended WAC 458-20-150 to reflect provisions of SHB 1891 (chapter 447, Laws of 2007), which allows a deduction from the business and occupation (B&O) tax for certain prescription drugs administered by medical service providers.  

WAC 458-20-168 Hospitals, nursing homes, boarding homes, adult family homes and similar health care facilities

WAC 458-20-168 provides B&O tax reporting instructions to persons operating hospitals, medical care facilities, nursing homes, and adult family homes. The rule explains when such persons are responsible for collecting retail sales tax. It also identifies certain retail sales and use tax exemptions that may apply to persons operating these facilities.

 This rule has been amended to recognize the following legislative changes:

  1. HB 2544, chapter 137, Laws of 2008, creates an exemption from state and local sales taxes and lodging taxes for temporary medical housing provided by a health or social welfare organization;  
  2. SHB 1891, chapter 447, Laws of 2007 (RCW 82.04.620), provides a deduction from the service and other activities classification of the B&O tax for amounts received by physicians or clinics for drugs for infusion or injection by licensed physicians; 
  3. ESHB 1672, section 5, chapter 165, Laws of 2006 (RCW 82.04.4485), created the hospital safe patient handling B&O tax credit equal to one hundred percent of the cost of mechanical lifting devices or other specified equipment; and 
  4. SB 6368, section 1, chapter 241, Laws of 2006, provided a repeal date for the quality maintenance fee imposed on nursing homes.

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

WAC 458-20-177 (Rule 177) explains the tax consequences and tax exemption requirements for sales of motor vehicles, campers, and trailers to nonresidents.  This rule has been revised to reflect provisions of SHB 2158 (chapter 135, Laws of 2007).  This legislation identifies in statute the type of documentation a seller of motor vehicles, trailers, or campers needs to retain from a nonresident buyer, the consequences for non-compliance by a seller, and when the Department may contact a buyer when the sale was made on or after July 22, 2007.

WAC 458-20-270 Telephone program excise tax rates

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 is amending WAC 458-20-270 to recognize the rates that apply effective July 1, 2008.  This rule will upon its effective date supplant the emergency rule previously adopted (WSR 08-14-037) to provide these rates until an amended permanent rule could be adopted.  The rates adopted in this amendment are the same as provided in the emergency rule.

WAC 458-07-035 Listing of property - Subdivisions and segregation of interests

WAC 458-07-035 explains when the assessor must begin the listing and valuation of property in the county, provides information relating to the listing and valuation of subdividisons of real property, and explains when a person will be allowed to pay property taxes on a partial interest in a parcel of real property. This rule has been amended to recognize chapter 17, Laws of 2008 (HB 1149), which eliminated the requirement for an advance property tax deposit when recording a binding site plan. This amendment removes a reference to "binding site plan" from WAC 458-07-035(3)(a).

WAC 458-14-015 Jurisdiction of county boards of equalization

WAC 458-14-015 lists the appeals county boards of equalization may hear and explains the circumstances under which the boards’ may equalize property values on their own initiative.   This rule has been amended to add, at subsection (1), paragraph (p), the jurisdiction of the boards of equalization to hear appeals from decisions of the assessor pursuant to RCW 84.37.040 regarding deferrals under chapter 84.37 RCW (property tax limited income deferral program) as approved by the legislature in its November 2007 special session.

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 and the exemption available to the head of a family for otherwise taxable personal property up to a value of fifteen thousand dollars.   This rule has been amended to conform to SSHB 3104 (chapter 6, Laws of 2008), which extended the rights and liabilities of spouses under RCW 84.36.110 and RCW 84.36.120 to domestic partners.

WAC 458-16A-010 Nonprofit homes for the aging

WAC 458-16A-010 explains the exemptions allowed and the criteria that must be met in order to receive an exemption as a nonprofit home for the aging. WAC 458-16A-020 explains the application and renewal processes for obtaining the exemption.  WAC 458-16A-010 and WAC 458-16A-020 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.041 to domestic partners.  Definitions of “domestic partner” and “domestic partnership” have been included (at subsection (2), paragraphs (j) and (k) in WAC 458-16A-010 and subsection (2), paragraphs (g) and (h) of WAC 458-16A-020), and language has been added to recognize domestic partners and domestic partnerships where required.

WAC 458-16A-020 Nonprofit homes for the aging-Initial application and annual renewal

WAC 458-16A-010 explains the exemptions allowed and the criteria that must be met in order to receive an exemption as a nonprofit home for the aging. WAC 458-16A-020 explains the application and renewal processes for obtaining the exemption.  WAC 458-16A-010 and WAC 458-16A-020 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.041 to domestic partners.  Definitions of “domestic partner” and “domestic partnership” have been included (at subsection (2), paragraphs (j) and (k) in WAC 458-16A-010 and subsection (2), paragraphs (g) and (h) of WAC 458-16A-020), and language has been added to recognize domestic partners and domestic partnerships where required.

WAC 458-16A-100 Senior citizen and disabled person exemption--Definitions

WAC 458-16A-100 is being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), and legislation since 2003.

WAC 458-16A-110 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Gross Income

WAC 458-16A-110, 458-16A-115, 458-16A-120, and 458-16A-130 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), and SB 5034 (chapter 27, Laws of 2004).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 and RCW 84.36.383 to domestic partners.  SSB 5256 changed the calculation for excluding veterans benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability.  SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.”

WAC 458-16A-115 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Adjusted gross Income

WAC 458-16A-110, 458-16A-115, 458-16A-120, and 458-16A-130 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), and SB 5034 (chapter 27, Laws of 2004).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 and RCW 84.36.383 to domestic partners.  SSB 5256 changed the calculation for excluding veterans benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability.  SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.”

WAC 458-16A-120 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Determining combined disposable income

WAC 458-16A-110, 458-16A-115, 458-16A-120, and 458-16A-130 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), and SB 5034 (chapter 27, Laws of 2004).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 and RCW 84.36.383 to domestic partners.  SSB 5256 changed the calculation for excluding veterans benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability.  SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.”

WAC 458-16A-130 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Qualifications for exemption

WAC 458-16A-110, 458-16A-115, 458-16A-120, and 458-16A-130 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), and SB 5034 (chapter 27, Laws of 2004).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 and RCW 84.36.383 to domestic partners.  SSB 5256 changed the calculation for excluding veterans benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption.  HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability.  SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.”

WAC 458-16A-135 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Application described

WAC 458-16A-135 and WAC 458-16A-140 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), SB 5034 (chapter 27, Laws of 2004), and SB 5758 (chapter 53, Laws of 2003). SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 to domestic partners. SSB 5256 changed the calculation for excluding veteran’s benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption. SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption. HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability. SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.” SB 5758 clarified language related to gender and perjury in RCW 84.36.387.

WAC 458-16A-140 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Exemption described-Exemption granted-Exemption denied-Freezing property values

WAC 458-16A-135 and WAC 458-16A-140 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SSB 5256 (chapter 182, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), SB 5034 (chapter 27, Laws of 2004), and SB 5758 (chapter 53, Laws of 2003). SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 to domestic partners. SSB 5256 changed the calculation for excluding veteran’s benefits from the income calculation for the senior citizen, disabled person, and one hundred percent disabled veteran exemption. SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption. HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability. SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.” SB 5758 clarified language related to gender and perjury in RCW 84.36.387.

WAC 458-16A-150 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Requirements for keeping the exemption

WAC 458-16A-150 is being amended to conform to SSHB 3104 (chapter 6, Laws of 2008), SB 6338 (chapter 62, Laws of 2006), HB 1019 (chapter 248, Laws of 2005), and SB 5034 (chapter 27, Laws of 2004). SSHB 3104 extended the rights and liabilities of spouses under RCW 84.36.381 to domestic partners. SB 6338 changed the definition of “residence” for purposes of the senior citizen, disabled person, and one hundred percent disabled veteran exemption. HB 1019 extended the former senior citizen and disabled person exemption to veterans of the armed forces of the United States with one hundred percent service connected disability. SB 5034 raised income and valuation limits for qualifying for the senior citizen and disabled person exemption; increased the circumstances under which claimants may qualify for the exemption without residing in their residences; added a definition for “disability”; and added additional deductions for the purpose of calculating “disposable income.”

WAC 458-18-020 Deferral of special assessments and/or property taxes-Qualifications for deferral

WAC 458-18-020 and 458-18-100 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008). SSHB 3104 extended the rights and liabilities of spouses under RCW 84.38.030, 84.38.130, and 84.38.150 to domestic partners. In addition, subsection (5) of WAC 458-18-020 has been changed to reflect the 2004 amendment to RCW 84.38.030, which increased the amount of combined disposable income claimants may have in order to qualify for the deferral from thirty thousand dollars to forty thousand dollars.

WAC 458-18-100 Deferral of special assessments and/or property taxes-When payable-Collection-Partial payment

WAC 458-18-020 and 458-18-100 are being amended to conform to SSHB 3104 (chapter 6, Laws of 2008). SSHB 3104 extended the rights and liabilities of spouses under RCW 84.38.030, 84.38.130, and 84.38.150 to domestic partners. In addition, subsection (5) of WAC 458-18-020 has been changed to reflect the 2004 amendment to RCW 84.38.030, which increased the amount of combined disposable income claimants may have in order to qualify for the deferral from thirty thousand dollars to forty thousand dollars.

WAC 458-18-010 Deferral of special assessments and/or property taxes--Definitions

WAC 458-18-010 has been amended to conform to SSHB 3104 (chapter 6, Laws of 2008).  SSHB 3104 extended the rights and liabilities of spouses under RCW 84.38.030, 84.38.130, and 84.38.150 to domestic partners.  Definitions for “domestic partner” and “domestic partnership” have been added at (new) subsections (6) and (7) and subsequent subsections have been renumbered.  In addition, (new) subsection (16) has been changed to reflect the 2006 amendment to RCW 84.36.383(1), which revised the definition of “residence” for purposes of chapter 84.38 RCW.

WAC 458-20-102 Resale Certificates

WAC 458-20-102 Resale Certificates (Rule 102) currently explains that a resale certificate provided for multiple purchases over a period must be renewed every four years.  The Department is amending Rule 102 to recognize that the requirement to renew a resale certificate every four years no longer applies.  As of July 1, 2008, a resale certificate continues as long as the buyer has a “recurring business relationship” with the seller, which is defined by law as making at least one purchase from the seller within a period of 12 consecutive months. 

While there is no longer a requirement to renew a resale certificate if the seller can substantiate that  a recurring business relationship exists, the rule also explains that it will accept a resale certificate as evidence for wholesale sales that occur within four years of the certificate’s effective date without evidence of sales transactions being made once every twelve months.  Some language in the existing rule has been relocated within the rule to provide the information in a more useful manner, or eliminated as unnecessary.  The sample resale certificate has been eliminated and the reader is referred to telephone information center, and mailing address for a certificate to be completed.

The Department is amending Rule 102 on an emergency basis at this time because the law change became effective July 1st.  The Department has also proposed an amendment to the permanent Rule 102, filed as WSR 08-16-040.


June 2008

ETA 2002r10 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 2008 through June 2009.

WAC 458-20-270 Emergency Telephone program excise tax rates

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 is adopting this rule on an emergency basis to recognize the rates that apply effective July 1, 2008.

An emergency adoption of a Rule 270 is necessary because a permanent rule cannot be adopted at this time. This rule action will provide needed telephone program excise tax rates that apply effective July 1, 2008 until a permanent rule can be adopted.  This emergency rule is the same as the proposed rule filed on May 6, 2008 (WSR 08-10-077).

ETA 2029r1 Retail Sales Taxes Imposed on Telecommunications Used to Provide Internet Access Services

ETA 2029.04.245 (ETA 2029) addresses Washington’s taxation of telecommunications purchased, sold, or used to provide Internet access under the Internet Tax Freedom Act (ITFA), 47 U.S.C. section 151 note, as amended.  This ETA has been updated to recognize the enactment of the Internet Tax Freedom Act Amendments Act of 2007, Pub. L. No. 110-108 (2007).  ETA 2029 clarifies that Washington's retail sales tax is not due on the sale of telecommunications purchased, sold, or used to provide Internet access services beginning June 30, 2008 under the ITFA's tax moratorium.  The ETA also explains that Washington’s business and occupation tax is not subject to the ITFA’s tax moratorium and that Washington is permitted to continue imposing this tax on Internet access services under the other business or service activities classification.  Finally, this ETA discusses Washington's taxation of telecommunications purchased, sold, or used to provide Internet access prior to June 30, 2008 under ITFA's two grandfathering clauses.

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 second half of 2008.

  WAC 458-20-107 Requirement to separately state sales tax--Advertised prices including sales tax

WAC 458-20-107 (Rule 107) explains the statutory requirement that retail sales tax must be separately stated from the selling price on any instrument of sale.  Rule 107, as revised, no longer contains the definition of “selling price” as it is not needed for the subject matter of the rule; in addition the definition cited language from a previous version of the statute (RCW 82.08.010).    The reference to WAC 458-20-119 (Sales of meals) for information regarding the requirement for separately stating retail sales tax by a restaurant with a Class H liquor license has been replaced with a reference to WAC 458-20-124 (Restaurants, cocktail bars, taverns and similar businesses).

The reference to WAC 458-20-257 (Warranties and Maintenance agreements) has been removed as not necessary.

WAC 458-20-110 Delivery charges

WAC 458-20-110 (Rule 110) Delivery charges explains the manner in which delivery charges are subject to the business and occupation, retail sales, and use taxes.  Rule 110 has been revised to incorporate statutory provisions of chapter 6, Laws of 2007 (SSB 5089) on apportioning delivery charges included in the sales price when a shipment includes both product subject to retail sales tax and product not subject to sales tax.

WAC 458-20-13601 Manufacturers and processors for hire--Sales and Use tax exemption for machinery and equipment

WAC 458-20-13601 Manufacturers and processors for hire – Sales and Use tax exemption for machinery and equipment explains the sales and use tax exemption to manufacturers or processors for hire of machinery and equipment (M&E) used directly in a manufacturing operation or a research and development operation, as well as to third parties engaged in testing for manufacturers or processors for hire of M&E used directly in a testing operation. This rule was revised to recognize that effective July 1, 2008, a blanket exemption certificate continues as long as the seller has a recurring business relationship with the buyer, which is defined by law as making at least one purchase from the vendor within a period of 12 consecutive months.

In addition, the subsection identifying legislative changes that occurred prior to July 25, 1999 was removed as the information is no longer needed in the rule.

WAC 458-20-174 Sales of motor vehicles, trailers, and parts to motor carriers operating in interstate or foreign commerce.

WAC 458-20-174 Sales of motor vehicles, trailers, and parts to motor carriers operating in interstate or foreign commerce explains the retail sales tax exemptions provided in RCW 82.08.0262 & 82.08.0263 for sales to for-hire motor carriers operating in interstate or foreign commerce.  This rule has been revised to recognize that effective July 1, 2008, a blanket exemption certificate continues as long as the seller has a recurring business relationship with the buyer, which is defined by law as making at least one purchase from the vendor within a period of 12 consecutive months. 

The Department has also added a reference to the Department’s Internet site for locating standard Revenue forms.

WAC 458-20-229 Refunds

WAC 458-20-229 (Rule 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; allowable sampling procedures; and how interest is calculated.
 
The Department has amended Rule 229 to make one change, which occurs at two locations.   This change occurs at subsection (8)(a)(i) & (ii).  This correction is to merely change two references from “subsection (7)(b) of this section” to instead read: “(b) of this subsection”. 

WAC 458-20-238 Sales of watercraft to nonresidents--Use of watercraft in Washington by nonresidents

WAC 458-20-238 (Rule 238) Sales of watercraft to nonresidents explains the tax consequences and tax exemption requirements for sales of watercraft to nonresidents, and the use tax reporting requirements of nonresidents bringing watercraft into Washington.  Rule 238 has been amended to incorporate provisions of chapter 22, Laws of 2007 (SHB 1002).  This legislation provides nonresident individuals with a sales tax/one-year use tax exemption for vessels 30 feet and longer.  The nonresident individual must purchase a $500 or $800 “use permit” based on the size of the vessel, either at the time of purchase in Washington or within 14 days of bringing the vessel into Washington.  The permits are sold by Washington licensed vessel dealers, who will remit the permit fees to the Department of Revenue.

WAC 458-20-250 Solid waste collection tax

WAC 458-20-250 Solid waste collection tax explains how the solid waste collection tax applies, who is required to collect the tax; and the B&O, retail sales, and use tax obligations of persons providing solid waste collection services.   Effective July 1, 2008, a “blanket exemption certificate” used for retail sales tax purposes continues as long as the seller has a recurring business relationship with the buyer, which is defined as making at least one purchase from the vendor within a period of 12 consecutive months.  While not required, the Department is revising Rule 250 to apply this standard to the solid waste collector’s exemption certificate for consistency purposes.

WAC 458-20-255 Carbonated beverage syrup tax

WAC 458-20-255 Carbonated beverage syrup tax has been revised to correct an editing error that occurred when the rule was previously revised to eliminate references to a separate carbonated beverage tax that no longer exists.  RCW 82.64.030(3) provides an exemption for wholesale sales of trademarked syrup “to a bottler appointed by the owner of the trademark to manufacture, distribute, and sell such trademarked syrup within a specified geographic territory.” The wording in subsection (5) (d) Wholesale sales of trademarked syrup to bottlers has been changed to match the language in the statute.  In the body of the subsection, the wording has changed from “trademarked carbonated beverage” to “trademarked syrup” which matches the heading of the subsection, as well as the statute.  References to statutes were also added.

WAC 458-20-262 Retail sales and use tax exemptions for agricultural employee housing

WAC 458-20-262 Retail sales and use tax exemptions for agricultural employee housing has been revised to recognize that effective July 1, 2008, an exemption certificate continues as long as the seller has a recurring business relationship with the buyer, which is defined by law as making at least one purchase from the vendor within a period of 12 consecutive months.

The sample blank exemption certificate form has been deleted from the rule, and an explanation on how a “Farmers’ Retail Sales Tax Exemption Certificate” can be obtained has been added.

WAC 458-20-27702 Taxpayer relief--Sourcing Compliance--One thousand dollar credit and certified service provider compensation for small businesses

WAC 458-20-27702 Taxpayer relief – Sourcing Compliance –One thousand dollar credit and certified service provider compensation for small businesses (Rule 27702) is a new rule explaining certain small business relief provided to eligible taxpayers implementing new local retail sale tax sourcing requirements under RCW 82.32.730 and RCW 82.32.490.   An “eligible taxpayer” is a taxpayer that:
     (a) Immediately before July 1, 2008, was registered with the Department and engaged in making sales of tangible personal property that the taxpayer delivered to physical locations away from its place of business; and
     (b) During the calendar year 2008:
     (i) Has a physical presence in Washington;
     (ii) Has gross income of the business of less than five hundred thousand dollars;
     (iii) Has at least five percent of its gross income from sales subject to sales tax derived from sales of tangible personal property delivered to physical locations away from its place of business; and
     (iv) Has at least one percent of its gross income from sales subject to sales tax derived from deliveries of tangible personal property to destinations in local jurisdictions imposing sales tax other than the one to which the taxpayer reported the most local sales tax.

This rule explains the one thousand dollar tax credit and the subsidized certified service provider option available to eligible taxpayers who must implement destination based local sourcing under RCW 82.32.730 and RCW 82.14.490 beginning July 1, 2008.  This rule also establishes the compensation rate for these certified service providers providing services to eligible taxpayers under RCW 82.32.760.

ETA 2041 Direct Seller's Use of the Internet, Mail Orders, Direct Calls, etc

RCW 82.04.423 provides a business and occupation (B&O) tax exemption for wholesale and retail sales by certain out-of-state businesses that make sales in this state exclusively to or through a “direct seller’s representative.”  This exemption is often referred to as the “direct seller’s exemption” and the person claiming the exemption is referred to as the “direct seller.”  This exemption is limited to the B&O tax and does not extend to the retail sales tax.

This Excise Tax Advisory (ETA) discusses the use of the internet, mail orders, direct calls, and other methods used by direct sellers to make sales directly to customers in this state.  The ETA explains when these methods satisfy or fail to satisfy the statutory requirement that the direct seller make “sales in this state exclusively to or through a direct seller’s representative.”


May 2008

WAC 458-20-145 Local sales and use tax

Effective July 1, 2008, RCW 82.32.730 and RCW 82.14.490 require sellers collecting
local retail sales tax in Washington to implement new local retail sales tax sourcing rules.
This rule clarifies the local sourcing rules applicable to the retail sales of tangible personal
property, retail services, extended warranties, and leases of tangible personal property by
amending WAC 458-20-145.


March 2008

ETA 2012 Series Manufacturers' Machinery and Equipment Exemption

ETA 2012 and its supplements provide guidance regarding the retail sales and use tax exemption in RCW 82.08.02565 and 82.12.02565, commonly referred to as the manufacturers' machinery and equipment exemption (M&E exemption).  The Department has amended the ETA 2012 series to add language explaining that even if equipment is eligible for exemption under the guidelines of the particular document, all requirements for exemption must be satisfied.  There is no change to the subject matter of these documents. 

The following language was added:

In addition to the issues discussed in this ETA, machinery and equipment must also meet the other requirements of the statutes to be eligible for the exemption.  For example, some of the requirements include:

  • Purchaser/User must be a manufacturer, processor for hire, or a tester for a manufacturer or processor for hire,
  • Must purchase machinery or equipment (devices, industrial fixtures, support facilities, pollution control equipment),
  • The machinery or equipment must be used directly in a manufacturing, research and development, or testing operation,
  • The machinery or equipment must have a useful life of one year or more, and
  • The machinery or equipment must be used more than 50% of the time on an eligible activity.

Therefore, readers are advised that RCW 82.08.02565, RCW 82.12.02565, and WAC 458-20-13601 should also be referenced when making determinations about taxability.

The ETA series contains the following documents:

ETA 2012       Manufacturers’ Machinery and Equipment Exemption
ETA 2012-1S Rental of Tangible Personal Property and Providing Tangible Personal
Property Along With an Operator
ETA 2012-2S Pollution control equipment
ETA 2012-3S Electrical apparatus and utility systems
ETA 2012-4S Devices
ETA 2012-5S Design and Product Development
ETA 2012-6S Manufacturing site
ETA 2012-7S Buildings, fixtures, and support facilities
ETA 2012-8S Computers
ETA 2012-9S Prototypes
ETA 2012-10S Research and Development

ETA 2031r1 Camping Clubs Receiving Initiation Fees and Dues Income

The Department of Revenue has revised Excise Tax Advisory 2031.04.183 Camping Clubs Receiving Initiation Fees and Dues Income (ETA 2031).

ETA 2031 explains the tax-reporting responsibilities of camping clubs that charge initiation fees and dues for membership in the camping club.  The ETA has been revised to explain how income received by camping clubs, whether from the sale of a membership, an annual periodic fee, or other charge, is sourced for retail sales tax purposes.

ETA's Cancelled Effective March 28, 2008


January 2008

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 previously adopted an amended rule on an emergency basis 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.   This rule making adopts a permanent rule, which includes the same information provided in the proposed and emergency rules.

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 amendment provides information that local taxing officials need to value classified farm and agricultural land during assessment year 2008.

The Department previously adopted an amended rule on an emergency basis 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.   This rule making adopts a permanent rule, which includes the same information provided in the proposed and emergency rules.

ETA 2014r2 Sales to Nonresidents of Jurisdictions Imposing a Sales Tax of Less than Three Percent

The Department of Revenue has issued Excise Tax Advisory 2014.08.193 Sales to Nonresidents of Jurisdictions Imposing a Sales Tax of Less than Three Percent (ETA 2014).

RCW 82.08.0273 provides a retail sales tax exemption for sales of tangible personal property to certain nonresidents of Washington.  ETA 2014 identifies the states, possessions, and provinces of Canada whose residents are eligible for this exemption.  It provides examples of sales that are and are not eligible.  This advisory also explains the seller's responsibility to examine proof of nonresidency and document the tax-exempt nature of a sale.

The advisory has been revised to remove Puerto Rico from the list of states, possessions, and provinces of Canada whose residents are eligible for this exemption.  Puerto Rico now imposes a retail sales tax of three percent or more (the statutory threshold).  Language has been added to explain that documentation maintained by the seller to substantiate a tax exempt sale must include the buyer’s name.