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WAC - Washington Administrative Code
ETA - Excise Tax Advisory
PTA - Property Tax Advisory
WAC 458-18-220 Refunds — Rate of interest provides the rate of interest that applies to tax refunds made pursuant to RCW 84.69.010 through 84.69.090 in accordance with RCW 84.69.100, and also to judgments entered in favor of the plaintiff pursuant to RCW 84.68.030. This rule has been amended to provide the rate of interest to be used when refunding property taxes paid in 2014.
WAC 458-30-262 Agricultural land valuation — Interest rate — Property tax component provides the interest rate and the property tax component used to value farm and agricultural lands classified under chapter 84.34 RCW (Open Space Program). This rule has been amended to provide the interest rate and property tax component to be used when valuing classified farm and agricultural land during the 2014 assessment year.
WAC 458-30-590 Rate of inflation — Publication — Interest rate — Calculation provides the rate of inflation used to calculate interest on deferred special benefit assessments when farm and agricultural or timber land is removed or withdrawn from classification under chapter 84.34 RCW (Open Space Program). This rule has been amended to provide the rate of inflation used in calculating interest for deferred special benefit assessments of land removed or withdrawn during 2014.
WAC 458-40-540 Forest land values 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 2014 assessment year.
WAC 458-40-660 Timber excise tax — Stumpage value tables — Stumpage value adjustments 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 2014.
WAC 458-20-107 Requirement to separately state sales tax explains that retail sales tax must be separately stated from the selling price on sales invoices or other instruments of sale. This rule has been revised to recognize Dep't of Revenue v. Bi-Mor, Inc., 171 Wash. App. 197, 286 P.3d 417 (2012).
WAC 458-20-124 Restaurants, cocktail bars, taverns and similar businesses
explains the business and occupation tax and retail sales tax applications to sales by restaurants and similar businesses. This rule has been revised to recognize Dep't of Revenue v. Bi-Mor, Inc.
, 171 Wash.App. 197, 286 P.3d 417 (2012). The revision also includes an explanation of the sales and use tax exemptions for products sold to restaurants that impart flavor to food during the cooking process (Chapter 13, Laws of 2013 (ESSB 5882)).
ETA 3184.2013 Prepared food sales applying the 75% test computation to multiple business establishments
This Excise Tax Advisory (ETA) explains how taxpayers apply the 75% test computation for “prepared food” where multiple business establishments are involved.Â Taxpayers with multiple establishments in the state may calculate:
- a separate percentage of prepared food sales for each establishment; or
- one percentage combining sales figures from all instate establishments.
ETA 3159.2013 Internet Protocol (IP) enabled telecommunications service taxability, sourcing, and allocation
This Excise Tax Advisory (ETA) was originally issued May 20, 2011.Â In general, this ETA addresses the taxability, sourcing, and apportionment of telecommunications services using Voice over Internet Protocol (“VoIP”) and Fax over Internet Protocol (“FoIP”) technologies under Washington’s retail sales tax and retailing B&O tax.Â
This ETA has been amended and reissued solely to recognize Second Engrossed Second Substitute House Bill (SESSHB) 1971 (Chapter 8, Laws of 2013, 2nd Special Session) that eliminated the local services exemption contained in RCW 82.08.0289 and retroactively addressed this exemption with respect to fixed interconnected voice over Internet protocol services sold by certain specified providers as defined in SESSHB 1971.
WAC 458-20-228 Returns, payments, penalties, extensions, interest, stay of collection
- Recognize legislation that requires taxpayers to file and pay taxes electronically. Chapter 23, Laws of 2010, and chapter 24, Laws of 2011.
- Recognize legislation which imposes a 35% penalty for a tax deficiency resulting from a “disregarded transaction” under RCW 82.32.655. Chapter 23, Laws of 2010.
- Recognize legislation that updates language regarding the misuse of a reseller permit and “other documents” authorized by use under RCW 82.04.470. Chapter 112, Laws of 2010.
- Recognize legislation that adjusted how payments are applied to outstanding taxpayer liabilities, extended existing personal liability provisions to spirit tax trust funds collected from customers, and recognized the transfer of the administration of spirits taxes to the Department. Chapter 39, Laws of 2012.
- Update the time frames in interest calculation examples.
WAC 458-20-22801 Tax reporting frequency
- Provisions of Chapter 24, Laws of 2011. This legislation requires taxpayers to file and pay taxes electronically.
WAC 458-20-22802 Electronic filing and payment
Department revised this rule to reflect changes in the law resulting from Substitute Senate Bill 5571 as passed by the Legislature during the 2009 regular session (Chapter 176, Laws of 2009), Substitute House Bill 2620 (Chapter 111, Laws of 2010), Engrossed House Bill 1357 (Chapter 24, Laws of 2011), and House Bill 2758 (Chapter 39, Laws of 2012.) The legislation requires taxpayers with a monthly and quarterly tax reporting frequency to file and pay their excise taxes to the Department electronically. The legislation also required that refunds issued by the Department be paid electronically if the taxpayer is required to pay taxes electronically and the Department has the necessary account information.
WAC 458-20-10004 Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities
This new section will provide brief adjudicative proceedings to those impacted by agency actions of the Department of Revenue in the administration of RCW chapter 59.30 regarding the assessment of the one-time business license fee; assessment of the annual renewal application fee; assessment of the annual registration assessment fee; and assessment of the delinquency fee for manufactured and mobile home communities.
WAC 458-61A-102 Real Estate Excise Tax-Definitions
WAC 458-61A-102 provides definitions that apply throughout chapter 458-61A WAC. The Department is amending this rule to correct the definition of “governmental entity” (subsection (9)) so that it is consistent with state and federal law.
WAC 458-20-19401, 19402, 19403, 19404, 19405 Adopted Nexus/Apportionment Rules
WAC 458-20-19401 - Minimum nexus thresholds for apportionable activities;
WAC 458-20-19402 - Single factor receipts apportionment – Generally;
WAC 458-20-19403 - Apportionable royalty receipts attribution;
WAC 458-20-19404 - Financial institutions -- Income apportionment;
WAC 458-20-19405 - CPI-U Adjustments to Minimum Nexus Thresholds for Apportionable Activities
ETA 3181 2013 Paymasters and Employers of Record
This ETA 3181 clarifies when a taxpayer qualifies as a paymaster able to exclude amounts received to pay the employer obligations of its clients from gross income. This guidance also illustrates the difference between a paymaster that is also an employer of record and a taxpayer who is engaged in the business of selling labor or services performed by its own employees.
This ETA also refers readers to the Department’s website for additional information regarding ESSB 5882 (Chapter 13, Laws of 2013, 2nd Special Session), which provides a deduction for certain amounts received from an affiliated business by a “qualified employer of record” engaged in providing services to that affiliated business.
ETA 3176.2013 Digital Products-General Implementation
ETA 9001.2009 Digital Products – General Implementation was initially issued on July 24, 2009 and then reissued as ETA 9001.2011 on June 30, 2011. This ETA is readopted as ETA 3176.2013 so that it is renumbered in a manner consistent with other existing ETAs. This ETA continues to explain the Department’s initial phased process for implementing chapter 535, Laws of 2009 (ESHB 2075); that the phased implementation process ended June 30, 2011; and how to submit a “digital products” letter ruling request to the Department.
ETA 3177.2013 Digital Products-General Analysis of Tax Liability
The Department initially issued ETA 9003.2010 Digital Products – General Analysis of Tax Liability on November 30, 2010. This ETA is readopted as ETA 3177.2013 so that it is renumbered in a manner consistent with other existing ETAs. This ETA explains the overall process of digital products tax analysis; highlights key considerations in the analysis process; and directs taxpayers to other ETAs and rules for more information. This ETA has been amended to eliminate the table of analytic steps taxpayers use in determining the tax treatment of digital products, which represents subject matter that has been subsequently addressed in WAC 458-20-15503.
ETA 9002.2009 Taxation of digital songs, movies, books, and online games transferred electronically
ETA 9002.2009 addresses the proper interpretation the taxation of digital songs, digital movies, digital books, and online games. This ETA is being canceled because the matter it addresses is now covered by WAC 458-20-15502 and WAC 458-20-15503. This cancellation is effective September 3, 2013.
ETA 3139.2009 Urban Transportation--The Five Mile Standard
ETA 3139.2009 addresses the proper interpretation of the phrase "operating entirely within five miles of the corporate limits thereof" in the definition of "urban transportation business" under RCW 82.16.010. This ETA is being canceled because the matter it addresses is now covered by amended WAC 458-20-180 (Motor carriers), which became effective August 3, 2013. This cancellation is effective on the date the rule became effective.
ETA 3180.2013 Warehousing/Reselling Prescription Drug B&O Tax Preference
This ETA addresses the requirements to qualify for preferential tax treatment under RCW 82.04.272, and in particular the requirements for sellers and buyers relating to “engaging in the business of warehousing and reselling drugs for human use pursuant to a prescription.”
ETA 3024.2013 Public Works Contracts
This ETA 3024 explains retainage, when retail sales tax is due on the amount of the retainage and exclusions from contract retainage. This was initially issued October 3, 2011. In 2013, this ETA was updated to reflect a recent statutory change regarding an exclusion from contract retainage pursuant to Substitute House Bill 1420, chapter 113, Laws of 2013.
ETA 3113.2013 Computing Leasehold Excise Tax at Public Marinas
This ETA discusses the credit allowed where the leasehold excise tax (LET) amount paid by a private tenant exceeds the property tax that would have been due if the property were privately owned. The ETA also provides public marinas with an acceptable formula to compute the amount of the LET the marinas as lessors are required to collect from lessees.
ETA 3179.2013 Washington State Estate Tax Treatment of Same-Sex Spouses
This ETA addresses the estate tax benefits for same-sex spouses under Washington state estate tax law, including the marital deduction, the Washington state Qualified Terminal Interest Property Trust ("QTIP"), and Qualifying Domestic Trust ("QDOT") election. This ETA references Washington Referendum 74 (Chapter 3, Laws of 2012), a Washington state statute that defines spouse as gender neutral and applicable to spouses of the same sex.
WAC 458-20-10101 Business licensing service-Total fee payable-Handling of fees
The Department amended this rule to increase the business license application handling fee from $15.00 to $19.00 and the license renewal handling fee from $9.00 to $11.00.
WAC 458-30-262 Agricultural land valuation-Interest rate-Property tax component
To correct a transcription error resulting in the elimination of “San Juan” from the list of counties assigned a property tax component for purposes of valuing classified farm and agricultural lands.
WAC 458-20-179 Public utility tax; 458-20-17901 Public utility tax-Energy conservation and cogeneration deductions; 458-20-180 Motor carriers
The Department is amending WAC 458-20-179 and 180 for general updating and reorganization of the information in the rules. WAC 458-20-17901 is being repealed as no longer needed, as relevant deduction information has been incorporated into Rule 179. Information pertaining to legislation SSB 6614 (chapter 295, Laws of 2010) has been added to Rule 179. Log hauling examples have been removed from Rule 179, as they are now included in WAC 458-20-13501. Deduction information specific to motor carriers has been moved from Rule 179 to Rule 180.
ETA 3175.2013 Purchases made with Funds Provided by the Federal Government
The Department has issued ETA 3175.2013. This ETA provides guidance regarding the tax collection and reporting requirements when buyers use funds provided by the United States to pay for a purchase. This ETA identifies federal programs that have been reviewed by the Department of Revenue (Department), and are included to provide general context. A description of SSB 5072, which provides a retail sales tax exemption for purchases of physician prescribed add-on automotive adaptive equipment, installation and repair services for veterans, is included.
ETA 3178.2013 Domestic International Sales Corporations
The Department has issued ETA 3178.2013. This ETA provides guidance regarding the application of Washington's business and occupation (B&O) tax to Domestic International Sales Corporations (DISCs) after the adoption of Economic Nexus and Single Factor Receipts Apportionment, including application of WAC 458-20-19402.
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, 2013, which are the same as those for the previous year, and
- 2E2SHB 1971 (chapter 8, Laws of 2013 2nd spec. sess.), which, effective August 1, 2013, eliminates these taxes and funds the programs by biennial general fund appropriations
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 2013.
ETA 3174.2013 B&O Tax and Out-of-State Printers
The Department has issued ETA 3174.2013. This ETA explains the Department’s position regarding the business and occupation (B&O) and retail sales tax reporting responsibilities of out-of-state printers selling printed materials in Washington. This ETA does not address publishing activities or the taxability of advertising income.
ETA 3050.2013 Dump Truck Operators
The Department has issued ETA 3050.2013. This Excise Tax Advisory (ETA) explains the public utility (PUT), business and occupation (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators.
ETA 3043.2013 Low-density light and power utility deduction
The Department of Revenue has revised Excise Tax Advisory 3043 (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 2013 through June 2014.
ETA 3133.2013 Withdrawal of published determinations
The Department has re-issued this ETA to announce that it has withdrawn two Determinations:
Det. No. 00-064, 19 WTD 1013. The taxpayer in this determination was a private, for-profit transportation company that provided ride sharing services for persons with special transportation needs (“paratransit services”). It leased paratransit vehicles from a transit authority and requested a refund from PUT under RCW 82.16.047. The determination correctly found that the taxpayer could not claim an exemption from PUT because it was not a qualified paratransit provider. Further, the determination correctly required each provider to separately qualify for the exemption. However, the determination also concluded that the transit authority was not a qualified provider since it was not a public social service agency. This conclusion is in conflict with the findings in Det. No. 97-104R, 17 WTD 59 (1998) and Det. No. 00-064, 19 WTD 1013 (2000) and has caused taxpayers confusion
Det. No., 01-167E, 21 WTD 272. The taxpayer in this determination was a transit authority that provided paratransit services. The determination concluded that a transit authority does not qualify as public social service agency and, therefore, could not claim the PUT exemption under RCW 82.16.047.
These conclusions are in conflict with the findings in Det. No. 97-104R, 17 WTD 59 (1998) and
Det. No. 00-064, 19 WTD 1013 (2000) and have caused confusion.
WAC 458-12-342 New construction-Assessment
WAC 458-12-342 explains how new construction is assessed for property tax purposes. The Department is amending this rule to correct 2 citations:
- WAC 458-19-005(2)(q) is changed to 458-19-005(2)(p); and
- WAC 458-12-005(4) is changed to 458-12-(2)(d).
WAC 458-16A-120 Senior citizen, disabled person, and one hundred percent disabled veteran exemption-Determining combined disposable income
WAC 458-16A-120 describes how an assessor determines a claimant's combined disposable income. This rule has been amended to incorporate the following legislation, as well as to make non-substantive stylistic and grammatical changes.
2012 - SHB 2056. This legislation changed the term "boarding home" to "assisted living facility" throughout the Revised Code of Washington;
2010 - E2SHB 1597. This legislation extended the time period for exemption renewal under the senior property tax relief program from four to six years.
WAC 458-18 (3 Rules) Property Tax - Abatements, credits, deferrals and refunds
Rules from Chapter 458-18 WAC amended:
· WAC 458-18-010 Deferral of special assessments and/or property taxes -- Definitions. This section provides definitions of the terms most frequently used to administer the deferral program for special assessments and/or property taxes created by chapter 84.38 RCW.
· WAC 458-18-030 Deferral of special assessments and/or property taxes -- Declarations to defer — Filing — Forms.
This section explains the due date for filing the declaration to defer as well as the contents of the form.
· WAC 458-18-080 Deferral of special assessments and/or property taxes -- Duties of the department of revenue – State treasurer. This section explains the Department and State Treasurer’s responsibilities under the deferral program.
WAC 458-18A (4 Rules) Property Tax - Limited Income Deferral Program
Rules from Chapter 458-18A WAC amended:
· WAC 458-18A-010 Deferral of special assessments and/or property taxes -- Definitions. This section provides definitions of the terms most frequently used to administer the deferral program for special assessments and/or property taxes on residential housing created by chapter 84.37 RCW.
· WAC 458-18A-020 Deferral of special assessments and/or property taxes -- Qualifications for deferral. This section explains the qualification under which a person may defer payment of the second installment portion of special assessments and/or real property taxes included on the annual property tax statement and due on October 31 in any year.
· WAC 458-18A-060 Deferral of special assessments and/or property taxes -- Limitations of deferral – Interest. This section explains the limitation to the deferral program when liens created by the deferrals of special assessments and/or real property taxes equal or exceed forty percent of the claimant's equity value in said property.
· WAC 458-18A-080 Deferral of special assessments and/or property taxes -- Duties of the department of revenue -- State treasurer. This section explains various duties of the Department of Revenue and State Treasurer relating to the administration of the deferral program.
WAC 458-16A (4 Rules) Property Tax - Exemptions-Homes for the aging, Senior citizens and disabled persons
Rules from Chapter 458-16A WAC amended:
· WAC 458-16A-100 Senior citizen, disabled person, and one hundred percent disabled veteran exemption --
Definitions. This section contains definitions of the terms used for the senior citizen, disabled person, and one hundred percent disabled veteran exemption from property taxes contained in sections RCW 84.36.381 through 84.36.389.
· WAC 458-16A-135 Senior citizen, disabled person, and one hundred percent disabled veteran exemption – Application procedures. This section explains when and how a senior citizen, disabled person, or one hundred percent disabled veteran may apply for a property tax exemption on that person's principal residence. RCW 84.36.381 through 84.36.389.
· WAC 458-16A-140 Senior citizen, disabled person, and one hundred percent disabled veteran exemption – Exemption described -- Exemption granted -- Exemption denied -- Freezing property values. This section explains how county assessors process a claimant's application form for the senior citizen, disabled person, or one hundred percent disabled veteran property tax exemption. The rule describes the exemption and what happens when the exemption is granted or denied by the assessor.
· WAC 458-16A-150 Senior citizen, disabled person, and one hundred percent disabled veteran exemption --
Requirements for keeping the exemption. This section explains how and when a senior citizen, disabled person, or one hundred percent disabled veteran must file additional reports with the county assessor to keep the senior citizen, disabled person, or one hundred percent disabled veteran property tax exemption. This section also explains what happens when the claimant or the property no longer qualifies for the full exemption.
WAC 458-20-162 Stockbrokers and security houses
WAC 458-20-162 (Rule 162) explains the business and occupation (B&O) tax-reporting responsibilities of stockbrokers and security houses. The Department amended Rule 162 to recognize that stock brokers and security houses engaging in business in multiple states must apportion income for purposes of determining their B&O tax reporting responsibilities. For periods on and after June 1, 2010, the rule refers readers to WAC 458-20-19402 Single factor receipts apportionment – Generally. For periods prior to June 1, 2010, the rule refers readers to WAC 458-20-194 Doing business inside and outside the state.
WAC 458-20-155/15501/15502/15503 Computer Hardware, Software, and Digital Products
The Department engaged in this rule making to amend WAC 458-20-15501, and adopt two new rules (WAC 458-20-15502 and 15503) to explain the impacts of 2009 and 2010 legislation, and to address other tax issues related to computer hardware, computer software, and computer services below. WAC 458-20-155 is being repealed.
- Chapter 535, Laws of 2009 (ESHB 2075), made major changes to the taxation of certain products and services provided or furnished electronically (commonly referred to as "digital products"). This legislation specifically imposed sales and use tax on digital products such as: Digital goods, including digital audio works, digital audio-visual works, and digital books; digital automated services; digital codes used to obtain digital goods or digital automated services; and remote-access software. The legislation also provided a number of sales and use tax exemptions.
- Chapter 111, Laws of 2010 (SHB 2620), clarified ambiguities and corrected unintended consequences related to the 2009 legislation.
ETA 3173.2013 Distributor Discounts/Allowances to Grocery Stores
WAC 458-20-108 explains that a bona fide discount may be deducted from gross proceeds of sales for determining tax liability. The Department has issued ETA 3173 to clarify for taxpayers whether a discount is a bona fide discount. The Department’s long standing position has been that a discount is bona fide if it is not in exchange for a service or benefit. The Department has also issued ETA 3173 to provide examples of the types of documentation and activities that would qualify as bona fide discounts.
ETA 3151.2013 Taxable Transactions by Aircraft Dealers
The Department of Revenue has revised Excise Tax Advisory (ETA) 3151. This advisory explains how certain transactions by aircraft dealers are taxable.
Example 4 of the ETA incorrectly stated that the portion of monthly rental charges attributable to out-of-state use by the lessee can be deducted from the measure of tax. This information is out of date and incorrect. RCW 82.32.730 provides that tax is imposed on the entire rental or lease charge, based on the primary property location, and is not altered by intermittent use of the property at different locations.