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

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


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


NOTE:
> Click on a month below to see what actions took place during that month.

> Click on an action (link) to see details of that action.

Rules:
WAC - Washington Administrative Code

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

December 2010

November 2010

October 2010

August 2010

July 2010

June 2010

May 2010

April 2010

March 2010

February 2010

January 2010


December 2010

ETA 9003.2010 Digital Products-General Analysis of Tax Liability

The Department issued ETA 9003.2010 Digital Products – General Analysis of Tax Liability on November 30, 2010.  This excise tax advisory summarizes the overall process of digital products tax analysis, highlights key considerations in the analysis process, and directs taxpayers to other excise tax advisories and rules for more information.

WAC 458-40-540 Forestland Values-2011

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 2011 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 2011. 

WAC 458-18-220 Refunds-Rate of Interest

WAC 458-18-220 provides the rate of interest that is to be 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 was amended to provide the rate of interest for treasury bill auction year 2010, which is the rate to be used for computing interest when refunding property taxes paid in 2011.

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

WAC 458-30-262 provides county assessors with the rate of interest and property tax component used in valuing farm and agricultural land classified under chapter 84.34 RCW (the Open Space Program).  Each county has its own property tax component. The rule is being amended to update the interest rate and property tax component that local taxing officials will use when valuing classified farm and agricultural land during assessment year 2011.

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

The Department is adopting this rule with an effective date of January 1st so that county officials may properly calculate interest on deferred special benefit assessments for farm and agricultural or timber land removed or withdrawn from classification on or after January 1, 2011.

Special benefit assessments for certain local improvements to farm and agricultural or timber land classified under chapter 84.34 RCW (Open Space Program) may be deferred by the land owner.  If a land owner chose to defer these assessments, and 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. 

This rule was amended to provide the rate of inflation to be used for calculating interest on land removed or withdrawn during the 2011 calendar year.

November 2010

458-20-14601 Financial institutions-Income apportionment

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

WAC 458-20-14601 (Rule 14601) provides tax reporting instructions for financial institutions doing business both inside and outside the state of Washington. 

WAC 458-20-194 (Rule 194) explains the apportionment requirements of persons entitled to apportion income under RCW 82.04.460(1). It also describes Washington nexus standards for business activities subject to apportionment under RCW 82.04.460(1).  Rule 194 applies to persons subject to the service and other activities, international investment income, licensed boarding home, and low-level radioactive waste disposal business and occupation (B&O) tax classifications, and who are not required to apportion their income under another statute or rule.

Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus provisions addressed in these rules, effective June 1, 2010.  The Department amended these rules to recognize that the guidance provided in the rules does not apply after May 31, 2010. 

458-20-267 Annual Reports for certain adjustments

458-20-268 Annual Surveys for certain tax adjustments

In order to take certain tax exemptions, credits, and rates (“tax adjustments”), taxpayers must file either an annual report or annual survey depending on the tax adjustments being taken.  The annual report or survey must be filed with the Department of Revenue detailing employment, wages, and employer-provided health and retirement benefits.  These rules explain who is required to and how to file an annual report or annual survey, and what information must be included.

The Department amended WAC 458-20-267 and 458-20-268 to recognize:

  • ESSHB 1597 (chapter 106, Laws of 2010).   This legislation establishes that only applications that have been approved are not confidential and subject to public disclosure. 
  • SB 6206 (chapter 137, Laws of 2010).  This legislation provided two extensions for filing an annual report or survey.  The two extensions are (1) a 30 day extension based on circumstances beyond the control of the taxpayer and (2) a onetime 90 day extension.
  • SHB 3066 (chapter 114, Laws of 2010).  This legislation provides consistency regarding the information required when filing an annual report and annual survey and now requiring all taxpayers who take a tax adjustment to file either a report or survey.  The legislation also amended the due date of the reports and surveys to April 30th following any calendar year in which the person becomes eligible to claim the tax adjustment for reports or surveys due 2011 or later.

458-20-240 Manufacturer's new employee tax credits-Applications filed after June 30, 2010

458-20-240A Manufacturer's new employee tax credits-Applications filed prior to July 1, 2010

The Department is amending WAC 458-20-240 (Rule 240) and adopting a new WAC 458-240A (Rule 240A) to explain the eligibility requirements and application procedure for the manufacturer’s new employee tax.  Rule 240 is amended to recognize HB 3014 (chapter 16, Laws of 2010, 1st Special Session).  This legislation amended the definition of a “manufacturer” and “research and development” for purposes of the new employee tax credits.  Rule 240 is also being amended to recognize ESSHB 1597 (chapter 26, Laws of 2010), which clarified that applications that are not approved by the Department cannot be disclosed.  Rule 240 will now apply only to those applications filed after June 30, 2010.

The Department incorporated the information contained in the previous Rule 240 into a new Rule 240A.  Rule 240A retains the information necessary for those applications that were filed prior to July 1, 2010.  The information incorporated into Rule 240A is necessary until the statute of limitation period for assessments and non claim period for refunds has run.

458-16-110 Applications-Who must file, initial applications, annual declarations, appeals, filing fees, penalties, and refunds

Rule 110 explains the procedures property owners must follow to apply for and renew real and personal property tax exemptions and leasehold excise tax exemptions.

Rule 110 was amended to:

  • recognize section 305 of E2SHB 1597 (Chapter 106, Laws of 2010), which adds property of hospitals established under chapter 36.62 RCW to the property tax exemption for “hospitals”;
  • recognize sections 301, 303, and 304 of SB 5468 (Chapter 111, Laws of 2007), which:
    •  adds property of hospitals established under chapter 36.62 RCW to the property tax exemption for hospitals,
    •  allows electronic filing,
    •  replaces affidavits with certifying statements,
    •  removes application and renewal fees, and
    •  makes physical inspection of exempt premises discretionary with the Department;
  • remove obsolete language and references.

458-18-210 Refunds-Procedure-Interest

Rule 210 explains the method for making refunds pursuant to chapter 84.69 RCW and the basis for determining interest on refunds.  The rule was amended to recognize section 9 of E2SHB 1208, (Chapter 350, Laws of 2009).  This legislation:

  • removed the authority of the county legislative authority to act on its own motion to order refunds; and
  • changed the due date for refund claims from within 3 years of payment to within 3 years from the date the tax was due.

458-20-104 Small business tax relief based on income of business

Rule 104 explains how the business and occupation (B&O) tax credit for small businesses, commonly referred to as the small business credit (SBC), is calculated. It also explains the public utility tax (PUT) income exemption for public utilities.  

The rule was amended to recognize the provisions of Chapter 23, section 1102, Laws of 2010, 1st special session, (2ESSB 6143).  This legislation increased the small business B&O tax credit to a maximum of $70 per month, but only for taxpayers whose B&O taxable amounts from activities taxable under RCWs 82.04.255 (Real estate brokers), 82.04.290(2)(a) (Service and other activities), and 82.04.285 (Contests of chance) add up to 50% or greater of the total of all B&O taxable amounts reported on the return.

458-20-24002 Sales and Use tax Deferral-New manufacturing and research/development facilities

Rule 24002 explains the sales and use tax deferral program for certain manufacturing or research and development investment projects that was provided by chapter 82.61 RCW.  This rule was repealed because the information is no longer needed.  Chapter 82.61 RCW was repealed in 2006.

October 2010

458-20-14601 Financial institutions-Income apportionment

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

WAC 458-20-194 (Rule 194) explains the apportionment requirements of persons entitled to apportion income under RCW 82.04.460(1). It also describes Washington nexus standards for business activities subject to apportionment under RCW 82.04.460(1).  Rule 194 applies to persons subject to the service and other activities, international investment income, licensed boarding home, and low-level radioactive waste disposal business and occupation (B&O) tax classifications, and who are not required to apportion their income under another statute or rule.

WAC 458-20-14601 (Rule 14601) provides tax reporting instructions for financial institutions doing business both inside and outside the state of Washington. 

Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus provisions addressed in these rules, effective June 1, 2010.  The Department is amending these rules to recognize that the guidance provided in the rules does not apply after May 31, 2010. 

WAC 458-20-19401 Minimum nexus thresholds for apportionable activities

WAC 458-20-19402 Single factor receipts apportionment-Generally

WAC 458-20-19403 Single factor receipts apportionment-Royalties

WAC 458-20-19404 Financial institutions-Income apportionment

Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010.  The Department has adopted the following emergency rules to explain how these requirements apply:

  • WAC 458-20-19401 Minimum nexus thresholds for apportionable activities
  • WAC 458-20-19402  Single factor receipts apportionment – Generally
  • WAC 458-20-19403 Single factor receipts apportionment – Royalties
  • WAC 458-20-19404 Financial institutions – Income apportionment 

458-20-196 Bad Debts

The Department is amending WAC 458-20-196 (Rule 196) to recognize:

  • Provisions of Chapter 23, Laws of 2010, 1st special session, (2ESSB 6143).  This legislation amended the law to provide that only the original seller in the transaction that generated the bad debt, or a certified service provider used by the seller, may claim a retail sales or use tax credit or refund on or after July 1, 2010.
  • The decision of the Washington State Court of Appeals Division 2 in Home Depot USA, Inc. vs. State of Washington, 151 Wash. App. 909, 215 P.3d 222. This decision held that a seller cannot claim a bad debt sales tax refund for bad debts incurred by the private label credit card issuer that financed its customers’ purchases.

458-20-244 Food and food ingredients

The Department is amending WAC 458-20-244 to recognize the following legislation:     

  • 2ESSB 6143 (chapter 23, Laws 2010), which extended sales tax to sales of candy and bottled water;
  • E2SHB 1597 (chapter 106, Laws of 2010), which clarified that retail sales tax applies to the gross vending machine proceeds from sales of soft drinks; and
  • SB 5470 (chapter 483, Laws of 2009), which provides a sales tax exemption for sales of meals provided at qualified low-income senior housing facilities.

Minor editing changes were also made.

458-20-246 Sales to or through a direct seller's representative

The Department is amending WAC 458-20-246 to recognize 2ESSB 6143, (chapter 23, Laws of 2010).  This legislation:

  • reaffirmed and clarified the legislature’s intent in establishing the direct sellers’ exemption; and
  • repealed the exemption effective May 1, 2010.

Language has also been added to subsections (2) and (3) to clarify that in the rule “direct seller” refers to the selling company, and “direct seller’s representative” refers to the person who purchases consumer products from the direct seller and resells the products, or sells for or solicits sales on behalf of the direct seller.

458-20-24003 Tax Incentives for high technology businesses

WAC 458-20-24003explains the tax incentive programs available for persons engaged in qualified research and development or pilot scale manufacturing in five high technology areas.   These incentive programs include:

  • The sales and use tax deferral program provided by chapter 82.63 RCW; and
  • The business and occupation tax credit program provided by RCW 82.04.4452. 

This rule has been amended to recognize E2SHB 1597 (chapter 106, Laws of 2010).   This legislation establishes that only those applications for the high technology deferral that have been approved are not confidential and subject to public disclosure. 

458-20-127 Sales of newspapers, magazines and periodicals

The Department has amended WAC 458-20-127 (Rule 127) to reflect the following recent legislative changes:

  • ESHB 2075 (chapter 535, Laws of 2009) explains the application of the retail sales tax and use tax on the sale of magazines and periodicals that are transferred to the buyer electronically;
  • SB 6173 (chapter 563, Laws of 2009) changes the use of a resale certificate to a resellers permit to document a wholesale sale.

Rule 127 has also been amended to recognize RCW 82.08.02535, which provides a retail sales tax exemption for magazine or periodical sales for certain fundraising purposes.  Editing changes for readability purposes were also made.

458-20-24001 Sales and use tax deferral-Manufacturing and research/development activities in high unemployment counties-Applications filed after June 30, 2010

458-20-24001A Sales and use tax deferral-Manufacturing and research/development activities in rural counties-Applications filed prior to July 1, 2010

 WAC 458-20-24001 (Rule 24001) and WAC 458-20-24001A (Rule 24001A) explain the sales and use tax deferral program in qualifying counties and community enterprise zones.

Chapter 82.60 RCW establishes a sales and use tax deferral program. These rules explain this 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 has amended these rules to recognize:

  • HB 3014 (chapter 16, Laws of 2010, 1st special session), which clarified the definition of manufacturing for applications filed prior to July 1, 2010 and changed the definition for those applications filed after June 30, 2010.  The legislation also amended the definition of a qualifying county for applications filed after June 30, 2010; and
  • E2SHB 1597 (chapter 106, Laws of 2010), which establishes that only those applications for the high technology deferral that have been approved are not confidential and subject to public disclosure. 

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

WAC 458-20-166 (Rule 166) explains the taxation of persons who provide lodging and related services to transients for a charge.

The Department amended Rule 166 to recognize recent legislation:

  • Chapter 15, Laws of 2010 1st Sp. Session  (SSB 6889) – This legislation authorizes the transfer of the King County Convention and Trade Center to a public facilities district; and
  • Chapter 563, Laws of 2009 (SB 6173) – This legislation replaces the resale certificate with the reseller permit as the means by which to document a wholesale sale.

The Department also updated the rule to:

  • Recognize the current statutory language regarding when the furnishing of lodging for a continuous period of one month or more is presumed to be a rental or lease of real property;
  • Remove obsolete language regarding purchases made using US Govt. credit cards.  The rule now refers readers to the Department’s internet site for current information regarding the types of credit cards used by the federal government;
  • Update language to reflect current statutory terminology regarding self-service laundry facilities; and
  • Add language to recognize that current law authorizes a tourism promotion area charge (chapter 35.101 RCW).

August 2010

458-20-273 Renewable Energy System Cost Recovery

WAC 458-20-273 (Rule 273) explains the cost recovery incentive program for renewable energy systems.  The Department has amended Rule 273 to recognize ESSB 6170 (chapter 469, Laws of 2009) and ESSB 6658 (chapter 202, Laws of 2010).  The legislation: (1) increases the annual payment limitations to customers, (2) increases the limitations on incentive payments made by participating light and power businesses, (3) changes the formula used to determine payment amounts based on “economic development kilowatt-hours,” (4) extends the incentive program to community solar projects, (5) creates three types of community solar projects, (6) sets limitations on total payments for community solar projects and (7) sets capacity generating restrictions on systems in community solar projects.

ETA 3006 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.” 

ETA 3006 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 RCW 82.04.423’s requirement that the direct seller make “sales in this state exclusively to or through a direct seller’s representative.”

ETA 3006 has been updated to recognize that the exemption provided by RCW 82.04.423 expired May 1, 2010.  See Chapter 23, Laws of 2010, 1st Special Session (2ESSB 6143, Part IV).

WAC 458-20-279 Clean alternative fuel vehicles and high gas mileage vehicles

WAC 458-20-279 (Rule 279) Clean alternative fuel vehicles and high gas mileage vehicles explains the retail sales and use tax exemptions available for clean alternative fuel vehicles and high gas mileage vehicles.  The Department is amending Rule 279 to recognize the following legislation:

  • ESSB 6170 (Laws of 2009, chapter 469)  - This legislation repealed the sales and use tax exemptions for high mileage hybrid vehicles.  The legislation exempted the sale of high mileage hybrid vehicles from the 0.3% additional motor vehicles sales tax imposed by RCW 82.08.020(3) until January 1, 2011.
  • SSB 6712 (Laws of 2010 , chapter 11) -  This legislation extended the sales and use tax exemptions vehicles using clean alternative fuels to include qualifying used passenger cars, light duty trucks, and medium duty passenger vehicles, which were modified after their initial purchase with an EPA certified conversion to be exclusively powered by a clean alternative fuel.  

WAC 458-29A-100 Leasehold excise tax-Overview and definitions

WAC 458-29A-200 Leasehold excise tax-Taxable rent and contract rent

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

WAC 458-29A-500 Leasehold excise tax-Liability

The Department is amending these rules to recognize provisions of SB 6855, Chapter 281, Laws of 2010, which exempts community centers from property taxation and imposes leasehold excise tax on such property.  This legislation defines "community center" to be property, including a building or buildings, determined to be surplus to the needs of a district by a local school board, and purchased or acquired by a nonprofit organization for the purpose of conversion into community facilities for the delivery of nonresidential coordinated services for community members.

WAC 458-20-143 Publishers of newspapers, magazines, periodicals

The Department is amending WAC 458-20-143 to reflect several recent legislative changes:

  • 2ESSB 6143 (chapter 23 Laws of 2010) provides that advertising revenues earned by publishers of newspapers, periodicals, and magazines are to be apportioned to this state for tax purposes.
  • EHB 2122 (chapter 461, Laws of 2009) provides a preferential B&O tax rate for newspaper publishers.  This legislation also requires such newspaper publishers to file tax returns electronically and filing annual reports;
  • ESHB 2075 (chapter 535, Laws of 2009) explains the application of the retail sales tax and use tax on the sale of magazines and periodicals that are transferred to the buyer electronically;
  • SB 6173 (chapter 563, Laws of 2009) changes the use of a resale certificate to a resellers permit to document a wholesale sale;
  • SHB 2585 (chapter 273 Laws of 2008) provides amended definitions of “newspaper” and “supplement;” and

The Department is also incorporating:

  • The statutory definition of “periodical or magazine” provided in RCW 82.04.280 ; and
  • The sales tax and use tax exemptions for computer equipment used in printing or publishing of printed material provided by RCW 82.08.806 and 82.12.806.

July 2010

WAC 458-20-10201 Application process and eligibility requirements for reseller permits; and

WAC 458-20-10202 Brief adjudicative proceedings for matters related to reseller permits

Effective January 1, 2010, reseller permits replaced resale certificates as the means to substantiate wholesale purchases.  Legislation from Chapter 112, Laws of 2010, and Chapter 563, Laws of 2009, authorize the Department of Revenue (Department) to accept applications for reseller permits, issue reseller permits, and adopt rules for the effective implementation of the legislation.   The Department has adopted these rules to explain the application process and eligibility requirements for businesses to receive Department-issued reseller permits as well as the appeals process for those applicants for reseller permits that are denied.

The adopted rules:

  • WAC 458-20-10201 – Application process and eligibility requirements for reseller permits; and
  • WAC 458-20-10202 – Brief adjudicative proceedings for matters related to reseller permits.

WAC 458-40-660 Timber excise tax-Stumpage values

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 2010.   

ETA 3054 Sales to Nonresidents from Jurisdictions without a Sales Tax of Three Percent or More

RCW 82.08.0273 provides a retail sales tax exemption for sales of tangible personal property to certain nonresidents of Washington. 

Excise Tax Advisory 3054 (ETA 3054) 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.

ETA 3054 has been updated so that it does not authorize retailers to make tax-exempt sales to residents of British Columbia, Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario, and Quebec, Canada, consistent with Docket #10-2-01216-1, issued by the Superior Court for Skagit County.

June 2010

WAC 458-20-19401 Minimum nexus thresholds for apportionable activities

WAC 458-20-19402 Single factor receipts apportionment-Generally

WAC 458-20-19403 Single factor receipts apportionment-Royalties

WAC 458-20-19404 Financial institutions-Income apportionment

Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010.  The Department has adopted the following emergency rules to explain how these requirements apply.

WAC 458-20-19401 Minimum nexus thresholds for apportionable activitiesWashington’s business and occupation (B&O) taxes may be imposed only if a business has substantial nexus with this state.  This rule explains the minimum nexus thresholds for the B&O taxation of businesses engaged in apportionable activities.

WAC 458-20-19402   Single factor receipts apportionment – GenerallyThis rule explains how gross income earned by businesses engaged in apportionable activities is apportioned.  This rule does not apply to the apportionment of income of financial institutions taxable under RCW 82.04.290, which is addressed in WAC 458-20-19404, nor that of royalty income earned from granting the right to use intangible property, which is addressed in WAC 458-20-19403.  

WAC 458-20-19403 Single factor receipts apportionment – Royalties This rule addresses how gross income from royalties is apportioned when the business receives royalty payments from both within and outside the state.

WAC 458-20-19404 Financial institutions – Income apportionmentThis rule addresses how gross income from engaging in business as a financial institution is apportioned when the financial institution engages in business both within and outside the state.

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

WAC 458-20-14601 Financial institutions-Income apportionment

WAC 458-20-194 (Rule 194) explains the apportionment requirements of persons entitled to apportion income under RCW 82.04.460(1). It also describes Washington nexus standards for business activities subject to apportionment under RCW 82.04.460(1).  Rule 194 applies to persons subject to the service and other activities, international investment income, licensed boarding home, and low-level radioactive waste disposal business and occupation (B&O) tax classifications, and who are not required to apportion their income under another statute or rule.

WAC 458-20-14601 (Rule 14601) provides tax reporting instructions for financial institutions doing business both inside and outside the state of Washington. 

Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus provisions addressed in these rules, effective June 1, 2010.  The Department is amending these rules to recognize that the guidance provided in the rules does not apply after May 31, 2010. 

ETA 3066 Purchase of Personalty for Resale as Realty

ETA 3069 Use Tax on Property Acquired by Inheritance

ETA 3066 and 3069 recite language from RCW 82.12.020. The Department has updated this language to reflect the changes to this statute by Section 206 of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143).

ETA 3111 B&O Tax Exemption for Property Managers (RCW 82.04.394)-On-Site Personnel Working at Multiple Properties

RCW 82.04.394 provides a B&O tax exemption for amounts received by a property management company from the owner of a property for gross wages and benefits paid to on-site personnel. 
ETA 3111 explains how this B&O tax exemption provided to property management companies applies when on-site personnel work at multiple properties.

The Department has updated this ETA to recognize provisions of 2ESSB 6143 Part XII (Chapter 23, Laws of 2010 1st Special Session).  This legislation amended RCW 82.04.394 to restrict the exemption to those amounts received by:

  • A “non-profit property management company” from the owner of a property, or
  • A property management company from a “housing authority.”

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 tax rates effective July 1, 2010.  The TRS rate increases to 19 cents per switched access line for the upcoming fiscal year.  The WTAP rate increases to 14 cents per switched access line for the upcoming fiscal year.  These rates were previously announced by the Department in a special notice dated March 25, 2010 and can be found at http://dor.wa.gov/Docs/Pubs/SpecialNotices/2010/sn_10_TelephoneRates.pdf.

WAC 458-20-196 Bad debts

WAC 458-20-196 (Rule 196) provides information about the tax treatment of bad debts under the business and occupation (B&O), retail sales, public utility, and use taxes.

The Department has amended Rule 196 to recognize provisions of Chapter 23, Laws of 2010, 1st special session, (2ESSB 6143). This amendment recognizes that only the original seller in the transaction that generated the bad debt, or a certified service provider used by the seller, may claim a retail sales or use tax credit or refund on or after July 1, 2010.

May 2010

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

The Department is amending WAC 458-20-165 (Rule 165) to recognize the following legislation:
Chapter 563, Laws of 2009 – This legislation replaced resale certificates with reseller permits as the means to substantiate wholesale purchases effective January 1, 2010.
Chapter 6, Laws of 2007 – This legislation changed the retail sales tax sourcing requirement for some sales.  Information specific to sourcing retail sales is provided in WAC 458-20-145 Local sales and use tax.  With respect to Rule 165, the explanation that the place of sale for laundry and dry cleaning businesses is the location of the facility has been changed to recognize that if the business delivers cleaned items to customer locations those sales should be sourced to the customer locations.
The Department has also reorganized the information contained in the rule into 3 separate parts:

  • Part I – Laundry or Dry Cleaning Services/Linen or Uniform Supply Services;
  • Part II – Self-Service and Coin-Operated Laundry Facilities; and
  • Part III – Laundry Services Performed for Nonprofit Health Care Facilities.

April 2010

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

The purpose of WAC 458-30-262 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). 

This rule was recently amended to provide the information for assessment year 2010 (WSR 10-02-025).  This amendment did not, however, correctly identify 2010 as the assessment year to which the values apply.  The Department is amending the rule to correct this oversight.  There is no change to the rate of interest and property tax component values.

WAC 458-20-104 Small business tax relief based on income of business

WAC 458-61A-202 Inheritance or devise

WAC 458-20-104 explains the small business B&O tax credit.  WAC 458-61A-202applies to transfers of real property by inheritance or devise which are not subject to the real estate excise tax.

These rules are being amended for the sole purpose of implementing E2SB 5688 (chapter 521, Laws of 2009).  E2SB 5688 requires agencies to “amend their rules to reflect the intent of the legislature to ensure that all privileges, immunities, rights, benefits, or responsibilities granted or imposed by statute to an individual because that individual is or was a spouse in a marital relationship are granted or imposed on equivalent terms to an individual because that individual is or was in a state registered domestic partnership.”

ETA 3007.2009 Occupational Medicine Services and the Preferential B&O Rate Under RCW 82.04.263

ETA 3157.2009 Information Technology Services and the Preferential B&O Rate Under RCW 82.04.263

The Department of Revenue has cancelled the following excise tax advisories (ETAs). 

ETA 3007.2009  Occupational Medicine Services and the Preferential B&O Rate Under RCW 82. 04.263.   This ETA explains the circumstances under which occupational medicine services are directly connected to and essential for cleanup services, and thus eligible for the preferential B&O tax rate provided by RCW 82.04.263.  This document is no longer needed because the statute was amended by ESSB 6170 (chapter 469, Laws of 2009) to specifically provide that health services are always deemed to contribute to the accomplishment of a requirement of a clean-up project undertaken by the United States Department of Energy.

ETA 3157.2009  Information Technology Services and the Preferential B&O Rate Under RCW 82. 04.263.  This ETA explains the circumstances under which information technology services systems are directly connected to and essential for cleanup services, and thus eligible for the preferential B&O tax rate provided by RCW 82.04.263.  This document is no longer needed because the statute was amended by ESSB 6170 (chapter 469, Laws of 2009) to specifically provide that information technology and computer support services are always deemed to contribute to the accomplishment of a requirement of a clean-up project undertaken by the United States Department of Energy.

WAC 458-20-190 Sales to and by the United States-Doing business on federal reservations-Sales to foreign governments

WAC 458-20-190explains the tax reporting responsibilities of persons:

  • Making sales to the United States and to foreign governments;
  • Engaging in business activities within federal reservations; and
  • Cleaning up radioactive waste and other by-products of weapons production for the United States.

The Department amended this rule to recognize ESSB 6170 (chapter 469, Laws of 2009).  This legislation amended RCW 82.04.263, which provides a preferential B&O tax rate for “cleaning up radioactive waste and other by-products of weapons production and nuclear research and development.” 

WAC 458-20-121 Sales of heat or steam-Including production by cogeneration

WAC 458-20-134 Commercial or industrial use

WAC 458-20-121 provides tax reporting information for persons who sell heat and/or steam.  It also provides information on the use tax liability of persons that produce fuel used to produce heat or steam. WAC 458-20-134 discusses the taxability of manufacturers and extractors that are consumers of products or by-products that they themselves have manufactured or extracted.

The Department amended these rules to recognize provisions of Chapter 469, Laws of 2009 (Engrossed Substitute Senate Bill 6170).  These provisions provide a sales and use tax exemption for hog fuel sold or used to produce electricity, steam, heat, or biofuel.  WAC 458-20-134 was also amended to include language providing information regarding the “value of article used” in the case of prototypes.   RCW 82.12.010(2)(e). This rule did not previously recognize these provisions.

WAC 458-20-185 Tax on tobacco products

WAC 458-20-185explains the tax liabilities of persons engaged in business as retailers or distributors of tobacco products other than cigarettes. 
 
The Department amended this rule to recognize SHB 1435 (chapter 154, Laws of 2009); which provides authority for the Washington State Liquor Control Board to issue and enforce the licensing requirements under RCW 82.26.060, 82.26.150, 82.26.180, 82.26.190, 82.26.210, and 82.26.220.   This rule action does not include changes from the recently concluded 2010 legislative session, to be incorporated into the rule in a future rulemaking.

WAC 458-20-186 Tax on cigarettes

WAC 458-20-186explains the tax liabilities of persons engaged in business as retailers or distributors of cigarettes.  The Department amended this rule to recognize HB 2542 (chapter 226, Laws of 2008); which amends the quantity which is unlawful to possess or transport from six thousand unstamped cigarettes to ten thousand unstamped cigarettes, and SHB 1435 (chapter 154, Laws of 2009); which provides for the Washington State Liquor Control Board authority to issue and enforce the licensing requirements under RCW 82.24.510 and 82.24.550.
 
This rule action does not include changes from the recently concluded 2010 legislative session, to be incorporated into the rule in a future rulemaking.

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

WAC 458-20-267 (Rule 267)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.  

Rule 267 explains how to file reports and what information must be included in the reports by persons claiming tax adjustments for the following:  

  • Aerospace manufacturing;
  • Electrolytic processing;
  • Solar electric manufacturing; and
  • The aluminum smelter industry

The Department amended this rule to recognize provisions of SSB 6828 (chapter 81, Laws of 2008).  These provisions include requiring that an annual report be filed FAR 145 Part certified repair stations claiming the tax adjustment provided in RCW 82.04.250(3).  FAR 145 Part certified repair stations were previously required to file an annual survey (WAC 458-20-268).  This legislation also authorized persons manufacturing commercial airplanes or components of such airplanes to report required information on a per manufacturing job site basis.

This rule action does not include changes from the recently concluded 2010 legislative session, to be incorporated into the rule in a future rulemaking.

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.  WAC 458-20-268 explains these survey requirements.  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 amended the rule to recognize SSB 6828 (chapter 81, Laws of 2008).   This legislation provides that persons claiming tax adjustments for FAR 145 part repair stations now file an annual report (WAC 458-20-267).  These persons were previously required to file an annual survey.

This rule action does not include changes from the recently concluded 2010 legislative session, to be incorporated into the rule in a future rulemaking.

ETA 3043.2010 2nd Revision Income Low-density light and power utility deduction

The Department of Revenue has revised Excise Tax Advisory 3043.2009 Low-density light and power utility deduction (ETA 3043).  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 3043 updates the information to provide the rate to be used for the period of July 2010 through June 2011.

March 2010

WAC 458-20-21701 Enhanced collection tools

WAC 458-20-21701 (Enhanced collection tools) is a new rule explaining procedures for electronic notice and order to withhold and deliver service (E-Withhold) and mitigation options for financial institutions required to respond to service by the department of revenue.

WAC 458-18-220 Refunds-Rate of Interest

WAC 458-18-220 provides the rate of interest that is to be 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 amended to provide the rate of interest for treasury bill auction year 2009, which is the rate to be used for computing interest when refunding property taxes paid in 2010.

RCW 84.69.100 requires the Department to annually adopt a rule that specifies the rate of interest to be paid on refunds.  This rule was previously amended on an emergency basis (WSR 10-02-028) because the rule-making process for a permanent rule could not be completed before January 1, 2010.  This action adopts the changes into the permanent rule.

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

WAC 458-29A-400 identifies and explains exemptions from the leasehold excise tax.  It has been amended to incorporate provisions of:

  • SB 5607, Chapter 90, Laws of 2007, which adds property owned by the United States Government to property that may qualify for exemption as a historic site and updates language contained in RCW 82.29A.130;
  • HB 2460, Chapter 194, Laws of 2008, which clarifies language relating to the exemption for amphitheaters;
  • SSB 6389, Chapter 84, Laws of 2008, which provides an exemption for certain military housing; and
  • SHB 1481, Chapter 459, Laws of 2009, which provides an exemption for electrical vehicle infrastructure.

WAC 458-40-530 Property tax, forest land-Land grades-Operability classes

WAC 458-40-610 Timber excise tax-Definitions

WAC 458-40-626 Timber excise tax-Tax liability-Private timber, tax due when timber harvested

The Department has corrected citations in three rules:

  • WAC 458-40-530 – The citation to RCW 84.33.120 in subsection (1) has been changed to RCW 84.33.130.
  • WAC 458-40-610 – The citations to WAC 458-40-690 in subsection (1) has been changed to WAC 458-40-680.
  •  WAC 458-40-626 – The citation to RCW 84.33.073 in subsection (2) is being removed because this statute no longer exists.

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

WAC 458-20-24003(Rule 24003) explains the tax incentive programs available for persons engaged in qualified research and development or pilot scale manufacturing in five high technology areas.   These incentive programs include:

  • The sales and use tax deferral program provided by chapter 82.63 RCW; and
  • The business and occupation tax credit program provided by RCW 82.04.4452.

The Department amended Rule 24003 to recognize SB 5909 (chapter 268, Laws of 2009).   This legislation establishes that under certain circumstances multiple qualified buildings leased to the same person are eligible for the deferral program.

WAC 458-20-235 Effect of rate changes on prior contracts and sales agreements

The Department amended WAC 458-20-235 to:

  • Recognize provisions of RCW 82.08.064(3), which provides specific guidance for the effect of sales tax rate changes for persons performing retail services such as repairing property and constructing buildings.
  • Remove the last paragraph, which referred cash-basis taxpayers to WAC 458-20-199 for instructions on the taxpayer’s responsibility to make an “accounts receivable adjustment” when there is a change in tax rates.  This adjustment is no longer required in WAC 458-20-199.
  • Provide contact information for persons with questions on how they might be affected by tax rate changes.
  • Add subsection titles and numbers to provide the information in a more useful manner.

Editing changes were also made for clarity purposes, and do not involve taxability changes.

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

WAC 458-20-22801 Tax reporting frequency-forms

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.  WAC 458-20-22801 Tax reporting frequency – forms describes the obligation for filing returns with associated payments for excise taxes reported to the Department of Revenue. 

The Department amended these rules to recognize the following legislation:

  • SSB 5571 (Ch. 176, Laws of 2009) – This legislation requires all taxpayers who have been assigned a monthly reporting frequency to electronically file and pay their taxes.  (WAC 458-20-228 & 458-20-22801)
  • SB 6173 (Ch. 563, Laws of 2009) – Pursuant to this legislation, reseller permits replace resale certificates as the means to substantiate wholesale purchases made on or after January 1, 2010.  (WAC 458-20-228)
  • SB 6950 (Ch. 181, Laws of 2008) – This legislation authorizes the Department to grant extensions of the due date for any taxes reported to the department when the governor has proclaimed a state of emergency under RCW 43.06.040.   (WAC 458-20-228)
  • SHB 3283 (Ch. 184, Laws of 2008) – This legislation provides, under certain conditions, a waiver of both the interest and penalty businesses that are majority owned by a person on active military duty outside the territorial boundaries of the U.S.   (WAC 458-20-228)

WAC 458-12-110 Listing of personal property by the assessor-Penalities for failing to list personal property and for making a false or fraudulent listing

WAC 458-14-056 Petitions-Time limits-Waiver of filing deadline for good cause

WAC 458-20-132 Automobile dealers/demonstrator and executive vehicles

WAC 458-30-275 Continuing classification upon sale or transfer of ownership of classified land-Actions of landowner and county officials to be taken prior to recording a conveyance of classified land

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

E2SB 5688 (chapter 521, Laws of 2009) requires agencies to “amend their rules to reflect the intent of the legislature to ensure that all privileges, immunities, rights, benefits, or responsibilities granted or imposed by statute to an individual because that individual is or was a spouse in a marital relationship are granted or imposed on equivalent terms to an individual because that individual is or was in a state registered domestic partnership.”  These following rules have been amended for the sole purpose of implementing E2SB 5688:

  • WAC 458-12-110 Listing of personal property by the assessor – Penalties for failing to list personal property and for making a false or fraudulent listing 
  • WAC 458-14-056 Petitions – Time limits – Waiver of filing deadline for good cause
  • WAC 458-20-132 Automobile dealers/demonstrator and executive vehicles
  • WAC 458-30-275 Continuing classification upon sale or transfer of ownership of classified land -Actions of landowner and county officials to be taken prior to recording a conveyance of classified land
  • WAC 458-61A-211 Mere change in identity or form – Family corporations and partnerships

February 2010

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).

This rule was recently amended to provide the information for assessment year 2010 (WSR 10-02-025). This amendment did not, however, correctly identify 2010 as the assessment year to which the values apply. The Department has amended this rule on an emergency basis to correct this oversight. There is no change to the rate of interest and property tax component values.

 

These rules all refer to resale certificates. Proposed action is to add standard language to recognize reseller permits for sales made on or after January 1, 2010.

WAC 458-20-110 Delivery charges

WAC 458-20-115 Sales of packing materials and containers

WAC 458-20-116 Sales and/or use of labels, name plates, tags, premiums, and advertising material

WAC 458-20-119 Sales of meals

WAC 458-20-124 Restaurants, cocktail bars, taverns and similar businesses

WAC 458-20-135 Extracting natural products

WAC 458-20-136 Manufacturing, processing for hire, fabricating

WAC 458-20-139 Trade shops-Printing plate makers, typesetters, and trade binderies

WAC 458-20-146 National and state banks, mutual savings banks, savings and loan associations and other financial institutions

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

WAC 458-20-151 Dentists and other health care providers, dental laboratories, and dental technicians

WAC 458-20-163 Insurance companies, including surety companies, fraternal benefit societies, fraternal fire insurance associations, beneficiary corporations or societies, and the Washington state health insurance pool

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

WAC 458-20-169 Nonprofit organizations

WAC 458-20-173 Installing, cleaning, repairing or otherwise altering or improving personal property of consumers

WAC 458-20-189 Sales to and by the state of Washington, counties, cities, towns, school districts, and fire districts

WAC 458-20-193 Inbound and outbound interstate sales of tangible personal property

WAC 458-20-209 Farming for hire and horticultural services performed for farmers

WAC 458-20-211 Leases or rentals of tangible personal property, bailments

WAC 458-20-218 Advertising agencies

WAC 458-20-222 Veterinarians

WAC 458-20-226 Landscape and horticultural services

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

WAC 458-20-24002 Sales and use tax deferral-New manufacturing and research/development facilities

WAC 458-20-274 Staffing services

January 2010

ETA 3162.2009 Aerospace "tooling" under Substitute Senate Bill 6828

Substitute Senate Bill (SSB) 6828 (Chapter 81, Laws of 2008) provides a number of incentives for the aerospace industry.  Several of these incentives relate to “tooling” specifically designed for use in manufacturing commercial airplanes or commercial airplane components.  This Excise Tax Advisory (ETA) addresses the Department’s interpretation of this term.