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WAC 138 Personal services rendered to others.          
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION  
WAC: 458-20-138   05/29/1970 Personal services rendered to others.Effective 7/1/70  
         
RCW: 82.04.040   1961 "Sale," "casual or isolated sale."  
  82.04.050   1997 "Sale at retail," "retail sale."  
  82.04.190   1995 Consumer  
  82.04.290   1995 Tax on selected business services, financial businesses, or other business or service activities.  
  82.14.030   1989 Sales and use taxes authorized--Additional taxes authorized--Maximum rates.  
         
ETA:        
         
INDUSTRY GUIDES:   2002 Beauticians  
           
SPECIAL NOTICES:        
Subject Title Reference:        
Director Fees 06/22/2010 Director Fees are Subject to the Business and Occupation (B&O) Tax  
Economic Nexus 05/28/2010 Tax Attorneys and CPAs New "Economic Nexus" in Washington State May Impact Your Clients  
Dental Industry     10/01/1998 Tax Changes on Dental Laboratories and Products  
      01/11/2001 Use Tax Reminder for Accountants  
      01/11/2001 Use Tax Obligation of Accountants  
    04/11/2001 Use Tax Reminder for Architects  
    04/11/2001 Use Tax Obligation of Architects  
Incentives/ International Service Districts   04/23/2000 Questions and Answers about the International Services Districts Business and Occupation Tax Credit  
    01/10/2002 Use Tax Obligations of Providers of Business Services  
Dental Industry   01/16/2002 Dental Industry Update  
Aerospace/ Incentives   06/06/2006 Non-manufacturer Aerospace Tax Incentives  
Aerospace   06/13/2008 Non-manufacturer Aerospace Tax Incentives  
         
DIRECTIVE:        
RPM: None        
           
         
WTD: 3 WTD 135 87-157   SERVICE -- RETAIL SALE -- PIANO TUNING.Piano tuning is not a retail sale.Any alteration or improvement to tangible personal property is minor.The primary nature of the activity is service.  
  5 WTD 369 88-197   B&O TAX -- SERVICE -- PYRAMIDING OF -- GOLF COURSE -- MANAGEMENT OF -- DOUBLE TAXATION.Where the independent manager/operator of a city-owned golf course receives a percentage of greens fees for its services, such commission is service B&O taxable to the operator notwithstanding the fact that the city also owes Retailing B&O on the same fees.  
  6 WTD 15 88-216   RETAIL SALES TAX -- TANGIBLE PERSONAL PROPERTY -- ARCHITECTURAL RENDERINGS.When a taxpayer subject to tax under the "Service and Other" category contracts with an artist to produce colored architectural renderings, such renderings are sales oftangible personal property to the taxpayer and subject to retail sales tax.  
  6 WTD 15 88-216 ` RETAIL SALES TAX -- TANGIBLE PERSONAL PROPERTY -- VALUE.It is not necessary that tangible personal property have resale value.Tangible personal property is any tangible item that is not real property.  
  6 WTD 33 88-221   B&O/SALES TAX -- CLASSIFICATION -- MACHINERY -- REPAIR -- ENGINEERING -- SEPARATION.Where engineering services are readily separable from the repair of portable machinery, the two activities will be judged independently for purposes of the B&O and retail sales tax.Here, the basis for such separation is found in two different contracts.  
  9 WTD 280-1 90-128   INFORMATION AND COMPUTER SERVICES -- FURNISHING TELEPHONE LINES FOR DATA TRANSMISSION -- SERVICE B&O TAX.Charges to customers for "dedicated" telephone lines furnished by taxpayers for use in connection with on-line data processing services rendered by taxpayer are subject to Service B&O tax.Providing telephone lines is incidental to service activity and is not "network telephone service" as defined by RCW 82.04.065 and Rule 245.  
  10 WTD 327 90-139A   SALES TAX -- USE TAX -- DENTAL PRACTICE -- PATIENT FILES -- PATIENT RECORDS --SALE OF.The sale of patient files and records by one dentist to another as part of the purchase of a dental practice is not a purchase of tangible personal property subject to sales or use tax.(Det. 90-139 overruled.)  
  11 WTD 219 91-177   SALES TAX -- USE TAX -- CUSTOM FILMS OR VIDEOS.The production of a customized training film or video is a service activity as opposed to a retail sale.  
  12 WTD 609 93-090   SERVICE B&O -- RECYCLE.Amounts received to take products to be recycled are subject to service business and occupation tax.  
  13 WTD 302 93-158   RETAIL SALE -- USE/DEFERRED SALES TAX -- CANNED SOFTWARE -- COMPUTER TELEPHONE SUPPORT SERVICES -- COMPUTER TRAINING -- WARRANTY -- MAINTENANCE --MIXED AGREEMENTS -- SEGREGATION OF CHARGES.Payments to a vendor of canned software for the training of employees are not subject to sales tax if separately stated from the charges for software maintenance.However, charges for maintenance of canned software are subject to use/deferred sales tax.Where payments are not adequately segregated, the combined charge will be subject to use/deferred sales tax.  
  12 WTD 115 92-060   GROSS INCOME -- COURT COSTS.Recovery of costs awarded in court action are not subject to tax, because they are a type of indemnity not included within the definition of gross income of the business.  
  15 WTD 118 95-020   GROSS INCOME OF THE BUSINESS.Where a collection agency's fee is a fixed percentage of the amounts collected on behalf of its client, the collection agency is subject to B&O tax on the entire fee.This is true even though the collection agency contracts with a second collection agency to share in the work and agrees to pay the second agency a portion of the fee.  
  17 WTD 318 96-189   B&O TAX -- SELECTED BUSINESS SERVICES CLASSIFICATION -- STENOGRAPHER -- MEDICAL TRANSCRIPTION.Transcribing medical recordings constitutes stenographic, secretarial, or clerical services taxable at the selected business services rate.  
  19 WTD 26 98-215   RETAIL SALES TAX - RETAILING B&O TAX - SERVICES IN RESPECT TO CONSTRUCTING - CONSTRUCTION MANAGEMENT - CONSULTING SERVICES.In addition to services that involve the actual physical construction of buildings and structures, services in respect to such constructing activity are subject to retail sales tax and retailing B&O tax.In general, services that are directly related to or in direct reference to the activity of constructing a building constitute services in respect to constructing activity.  
  19 WTD 26 98-215   RETAIL SALES TAX - RETAILING B&O TAX - SERVICES IN RESPECT TO CONSTRUCTING - CONSTRUCTION MANAGEMENT - CONSULTING SERVICES.In general, supervisory, management, or other services that direct or control how or when constructing activity take place are directly related to the activity of constructing buildings and structures.In contrast, most design, contract administration, inspection, accounting, educational, or other related services--which may be related to the general process of construction--are not directly related to the physical activity of constructing itself.Accordingly, they would not be considered services in respect to constructing activity, except when they are functionally integrated with a building or installation activity.  
  19 WTD 26 98-215   RETAIL SALES TAX - RETAILING B&O TAX - SERVICES IN RESPECT TO CONSTRUCTING - CONSTRUCTION MANAGEMENT - CONSULTING SERVICES.Services that solely involve consulting with and educating owners on acting as their own general contractors do not constitute services in respect to constructing.  
  19 WTD 94 99-126   B&O TAX - ADVANCE OR REIMBURSEMENT - ORAL UNDERSTANDING.An informal understanding between employee-placement consultants that an employer-client is liable for either consultant‘s portion of a placement fee is not enough to support exclusion under Rule 111.Payments were not excludable where taxpayer and its co-consultants had understanding, sometimes oral and sometimes written, that the client alone would be liable; where co-consultants understood that failure of the client to pay would not result in the other consultant being liable for payment; but where co-consultants did not bill or collect directly from clients and the client was not a party to the contract or arrangement.  
  19 WTD 262 99-136E   B&O TAX - EXEMPTION - CREDIT COUNSELING SERVICES - BANKRUPTCY TRUSTEE.A bankruptcy trustee's duties include advising and assisting debtors in performing under debt repayment plans.Accordingly, the trustee provides some services similar to the services provided by nonprofit consumer credit counselors.However, a bankruptcy trustee's duties and activities are far broader than the services provided by such counselors.Because most of the trustee's duties exceed the scope of the exemption, the trustee is not entitled to claim the exemption from B&O tax.  
  19 WTD 618 99-345   RETAIL SALE -- USE/DEFERRED SALES TAX -- CANNED SOFTWARE -- COMPUTER TELEPHONE SUPPORT SERVICES -- COMPUTER TRAINING -- WARRANTY -- MAINTENANCE --MIXED AGREEMENTS -- SEGREGATION OF CHARGES.Charges for mixed services to canned software are subject to use/deferred sales tax.Software maintenance includes "extended warranty" of installed software; annual software releases to fix "bugs"; new codes, security records, and tables; written documentation on the changes made, including installation instructions; and testing and distribution of system software upgrades.These services include both warranty and maintenance services.Under Rules 107 and 257, mixed agreements are taxed as maintenance agreements, subject to sales or use tax.Where payments are not adequately segregated, the combined charge will be subject to use/deferred sales tax.  
  19 WTD 947 00-027   SERVICE B&O TAX - PASS-THROUGHS - APPORTIONMENT - PROPERTY MANAGEMENT SERVICES.A foreign corporation/taxpayer providing real property management services was subject to service B&O tax on its gross income without the right to deduct reimbursements it received from the owners for on-site personnel salaries and other expenses.The taxpayer did not meet all requirements of Rule 111 and ETA 90-1.However, the taxpayer was entitled to apportion its gross income because the taxpayer maintained places of business both within and without Washington that contributed to the rendition of services within Washington.  
  20 WTD 20 99-280R   USE TAX - DEFERRED SALES TAX --VALUE - GIFT - CELLULAR PHONES:Use tax on cellular phones given away to promote cellular service commissions is measured by the donor's arm's length purchase price of the phones.  
  21 WTD 90 01-121   B&O TAX - GROSS INCOME - ADVANCE & REIMBURSEMENT - CONSULTANTS -- INDEPENDENT THIRD-PARTY CONTRACTORS -- PAYMASTER.A Rule 111 pass-through was not allowed where a consultant was hired by clients to provide business consulting services, actually performed some of those consulting services himself, and billed clients in his own name for all consulting services provided.  
  21 WTD 184 99-029   PARTNERSHIP - ABILITY OF A GENERAL PARTNER TO BIND THE PARTNERSHIP.The action of a general partner who enters into an agreement within the scope of the partnership's business is the action of the partnership itself, binding the partnership, even if the general partner executes the agreement in his own name.  
  23 WTD 198 04-0022E   B&O TAX - EXEMPTIONS -- LEASE VS. LICENSE TO USE REAL PROPERTY - ASSISTED LIVING - BOARDING HOMES -- 30 DAY PRESUMPTION.The statutory presumption that occupancy of real property for a continuous period of one month or more constitutes a lease of real property does not apply to assisted living facilities.  
  23 WTD 198 04-0022E   B&O TAX -EXEMPTIONS -- LEASE VS. LICENSE TO USE REAL PROPERTY - ASSISTED LIVING -- BOARDING HOMES -- EXCLUSIVE CONTROL - PRIMARY PURPOSE.Although some indicia of a lease are present in the assisted living context, the primary purpose of the taxpayer's assisted living facilities is to provide daily living assistance and care to the aged or infirm.Accordingly, the rental of real estate exemption does not apply.  
  23 WTD 198 04-0022E   CONGREGATE CARE CASES OVERRULED.In published determinations, we previously held that two congregate care facilities were entitled to the rental of real estate exemption for amounts attributable to lodging if they could segregate with reasonable accuracy the amounts received from real estate rental from amounts received for personal and professional services.Det. No. 90-252, 10 WTD 41 (1990); Det. No. 90-297, 10 WTD 87 (1990).We hereby overrule these determinations to the extent those determinations stand for the proposition that assisted living facilities can bifurcate income and treat part of the income as subject to the rental of real estate exemption.  
  23 WTD 206 04-0023E   SERVICE B&O TAX - B&O TAX EXEMPTION -- LEASE VS. LICENSE TO USE REAL PROPERTY - ASSISTED LIVING - 30 DAY PRESUMPTION.The statutory presumption that occupancy of real property for a continuous period of one month or more constitutes a lease of real property does not apply to assisted living facilities.  
  23 WTD 206 04-0023E   SERVICE B&O TAX -B&O TAX EXEMPTION -- LEASE VS. LICENSE TO USE REAL PROPERTY - ASSISTED LIVING-EXCLUSIVE CONTROL VS. RIGHT TO USE - PRIMARY PURPOSE.Although some indicia of a lease are present in the assisted living context, the primary purpose of the taxpayer's assisted living facilities is to provide daily living assistance and care to the aged.Accordingly, the rental of real estate exemption does not apply.  
  23 WTD 206 04-0023E   CONGREGATE CARE CASES OVERRULED.In published determinations, we previously held that two congregate care facilities were entitled to the rental of real estate exemption for amounts attributable to lodging if they could segregate with reasonable accuracy the amounts received from real estate rental from amounts received for personal and professional services.Det. No. 90-252, 10 WTD 41 (1990); Det. No. 90-297, 10 WTD 87 (1990).We hereby overrule these determinations to the extent those determinations stand for the proposition that assisted living facilities can bifurcate income and treat part of the income as subject to the rental of real estate exemption.  
           
         
OTHER: