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WAC 134 Commercial or industrial use.  
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
WAC: 458-20-134 04/26/10 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.

  458-20-134   09/23/1986 Commercial or industrial use.
RCW: 82.04.100   1987 Extractor.
  82.04.110   1971 Manufacturer.
  82.04.130   1967 Commercial or industrial use.
  82.04.190   1995 Consumer.
  82.04.210   1961 Byproduct.
  82.04.280   1994 Tax on printers, publishers, highway contractors, extracting or processing for hire, cold storage warehouse or storage warehouse operation, insurance general agents, radio and television broadcasting, consumer as defined in RCW 82.04.190(6)--Cold storage warehouse defined--Storage warehouse defined--Periodical or magazine defined.
  82.12.010 (1)   06/16/1905 Definitions.
ETA: 3152.2009 2/2/09 Off-site component fabrication by speculative builders
  21.12.134 7/1/66 VALUE OF MATERIALS USED BY PRODUCER IN PERFORMANCE OF PUBLIC ROAD CONTRACT -Cancelled effective December 29, 2006 This document addresses a situation where a taxpayer produces and sells asphalt mix to a county and also uses asphalt mix as a consumer in performing public road contracts. It explains that the measure of tax for the mix used by the taxpayer as a consumer is not necessarily the price at which the taxpayer sells mix to the county. Where there is no evidence to show an established retail selling price for a purchaser like
the taxpayer, the value of the mix produced by the taxpayer may be determined on a cost basis. The
issues in this ETA are adequately addressed in WAC 458-20-112.
  98.12.134 7/29/66 OVERHEAD COSTS IN COMPUTING VALUE ON A COST BASIS - Cancelled effective December 29, 2006 This document addresses the measure of use tax for catalogs manufactured by a department store and sent to its customers. It explains that where a retail selling price of similar products is not available, the use tax is due on a cost basis, including direct and indirect overhead costs. This issue is adequately addressed in WAC 458-20-112, 458-20-134, and other documents (e.g., WTDs) issued by the Department.
  240.12.134 9/16/66 USE AND MANUFACTURING TAX ON PRODUCTION OF MOLDS USED TO PRODUCE FINISHED PRODUCT Cancelled Effective 03/28/08. This document explains that a manufacturer who manufactures a single-use mold is subject to the manufacturing B&O tax and use tax on the value of the mold.  While this document accurately reflects the Department’s interpretation of the law, it fails to recognize the exemption from retail sales and use tax for manufacturing machinery and equipment (WAC 458-20-13601).  The applicability of the manufacturing B&O tax is fully addressed in WAC 458-20-136 and the retail sales and use tax application to one-time use mold is adequately discussed in WAC 458-20-13601. 
  404.04.134 7/24/70 OFF-SITE COMPONENT FABRICATION BY SPECULATIVE BUILDERS Revised 2/2/09 See ETA 3152.2009
INDUSTRY GUIDES:      
SPECIAL NOTICES:      
Forest-Derived Biomass 08/20/2013 Business and Occupation Tax Credit for Harvesters of Forest-Derived Biomass Continues
Hog Fuel 08/20/2013 Sales/Use Tax Exemption on Purchases of Hog Fuel Extended: Annual Tax Incentive Survey Required
Forest-Derived Biomass   6/23/09 Tax Incentive on Sales and Purchases of Hog Fuel and Forest-Derived Biomass
Hog Fuel   6/23/09 Tax Incentive on Sales and Purchases of Hog Fuel and Forest-Derived Biomass
DIRECTIVE: None      
RPM: None      
WTD: 2 WTD 219 87-45   BUSINESS AND OCCUPATION TAX - MANUFACTURING - COMMERCIAL OR INDUSTRIAL USE - SIGNS.A taxpayer primarily engaged in retailing, which internally produces signs and other display materials for use in its stores, is engaged in manufacturing under the business and occupation tax.
  2 WTD 219 87-45   USE TAX - MANUFACTURED PROPERTY - COMMERCIAL OR INDUSTRIAL USE - SIGNS - DISPLAY MATERIALS.A taxpayer which manufactures signs for its own use in its retail stores is liable for use tax on the "value of the articles so used."
  2 WTD 219 87-45   BUSINESS AND OCCUPATION TAX - MANUFACTURING - COMMERCIAL OR INDUSTRIAL USE - MEASURE - "VALUE OF PRODUCT" - COSTS.When it is not possible to determine with any reasonable accuracy the "gross proceeds from other sales at comparable locations in this state of similar products of like quality and character," the Department may determine the "value of product" on cost basis.The fact that salaries and other overhead may be a substantial portion of those costs does not render the tax to be a tax on salaries and other intangibles.
  2 WTD 219 87-45   USE TAX - MANUFACTURED PRODUCTS - COMMERCIAL OR INDUSTRIAL USE - MEASURE - "VALUE OF THE ARTICLES USED" - COSTS.When it is not possible to determine the "retail selling price, at the place of use, of similar products of like quality, quantity and character," under the provisions of Rule 178, the standard of determining value on a cost basis as set forth in Rule 112 may be used.The fact that salaries and other overhead may account for a substantial portion of such costs does not render the tax to be a tax on salaries or other intangibles.
  4 WTD 351 87-364   B&O -- MANUFACTURING -- COMMERCIAL OR INDUSTRIAL USE.In order to be taxed as a manufacturer of an article for the manufacturer's own commercial or industrial use, there must be a distinct and separate use of the article after the manufacturing has been completed.The very act of manufacturing an article is not using that article for commercial or industrial purposes.
  5 WTD 107 88-37   B&O -- MANUFACTURING -- MEASURE OF TAX -- VALUE.The value of an article manufactured for commercial use is the total cost attributed to the article, at the time the manufacturing is completed.
  7 WTD 43 88-440   USE TAX -- EXEMPTION -- FUEL USED BY ITS MANUFACTURER -- ICE USED FOR COOLING. The use of ice by its manufacturer to cool a product or a work area is not use as a fuel.Such use is not exempt of use tax.
  8 WTD 69 89-349   USE TAX -- MANUFACTURING FOR OWN USE -- BONA FIDE SALE -- RETAIL SELLING PRICE -- ARMS LENGTH TRANSACTION -- VALUATION.Where the taxpayer manufactures molds for industrial use, a bona fide sale of the molds has not been made to the user of the item manufactured.Therefore use tax is computed at the retail selling price of similar products of like quality and character provided that such sales price results from an arms length transaction which is separately and independently negotiated.Where it is not possible to obtain the selling price of similar products of like quality and character, cost may be used.
  8 WTD 157 89-406   MANUFACTURING TAX-- DEFINITION -- REMANUFACTURING ENGINES -- INTERSTATE DEDUCTION.The activity of remanufacturing used engine cores into remanufactured engines was found to constitute manufacturing within the definition of RCW 82.04.120 and WAC 458-20-136 (Rule 136). Therefore sales of remanufactured engines sold and delivered outside the state could not be deducted as interstate sales.
  8 WTD 445 89-546   USE TAX -- MEASURE OF -- PRINTED MATERIALS.A county government which makes and uses printed materials is liable for use tax on the total value of such materials which value includes labor and overhead costs expended in the printing thereof.
  10 WTD 71 90-275   USE TAX -- B&O TAX -- TOOLING-COMMERCIAL OR INDUSTRIAL USE.Tooling made by a manufacturer who uses it to make airplane parts is subject to Use Tax and Manufacturing B&O tax.
  12 WTD 73 92-032   USE TAX -- WINERY -- WINE SAMPLES -- DEFECTIVE BOTTLES -- MEASURE OF TAX.The measure of use tax on damaged or "off condition" bottles of wine used to pour samples at the tasting room of a winery is the retail selling price, if it can be determined, of such "off condition" bottles as opposed to the retail selling price of undamaged bottles of the same wine.
  12 WTD 509 92-352   MFG TAX -- USE AND/OR DEFERRED SALES TAX -- MANUFACTURING FOR OWN USE -- INTERMEDIATE STEPS -- SILK-SCREENING.The creation of silk-screens by a sign maker was found to be an intermediate step in the printing process.Therefore, manufacturing B&O tax was not due on the value of the screens and use and/or deferred sales tax was due only on the materials consumed.
  19 WTD 753 98-157   B&O & USE TAX -- COMMERCIAL OR INDUSTRIAL USE-- SMELTING POTS A manufacturer owes additional manufacturing B&O taxes and use taxes on steel smelting pots manufactured for commercial or industrial use even though some materials used to line the pots were exempt ingredients or components or chemicals used in processing.
  19 WTD 753 98-157   MANUFACTURING AND USE TAXES -- COMMERCIAL OR INDUSTRIAL USE -- DEPT. OF DEFENSE CONTRACTOR -- VALUATION.Smelting pots manufactured for commercial and industrial use by an aluminum company were not entitled to the lower Department of Defense contractor valuation when the pots were used to manufacture only raw materials which were then transferred to another division for manufacture into products and only a very small percentage of those products were sold to the Department of Defense.
  22 WTD 193 01-072   MANUFACTURING B&O TAX - USE TAX - STEVEDORING COMPANY - DOCKSIDE RAMP.Where a stevedoring company that leases a port facility adjacent to a navigable body of water builds a large ramp on the leased property, moves the ramp to the water's edge, and attaches it to the realty, it has not engaged in a taxable manufacturing activity.Use tax is due only on the materials used to construct the ramp.
       
OTHER: