home home Find a law or rule home Tax Research Index home Research Index Files home TRI140-168_files home Tax Research Index Tax Research Index
WAC 15503 Digital Products
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
WAC: 458-20-15503 06/17/2014 Digital Products

The Department proposes to amend WAC 458-20-15503 to recognize the provisions of Engrossed Substitute Senate Bill (ESSB) 5882, Part VII [Chapter 13, Laws of 2013, 2nd Special Session].  This legislation established an exemption from retail sales tax and use tax for purchases of standard financial information by qualifying international investment management companies.

  458-20-15503 02/25/13

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  WAC 458-20-155 is being repealed.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. 

         
RCW:        
         
         
ETA: 3189.2014 03/07/2014

Taxation of Alarm Monitoring

This ETA explains the taxation of a single alarm monitoring service. The ETA discusses alarm monitoring services that qualify as digital automated services (DAS) under RCW 82.04.192, including instances where services are not considered DAS. The ETA further explains the application of the primarily human effort exclusion from DAS in this context, providing related examples.

  3177.2013 09/03/2013

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.

         
       
INDUSTRY GUIDES:      
       
         
         
SPECIAL NOTICES:      
Subject Title Reference:      
Incentives 01/09/2014 Exemptions Extended for Certain Purchases by Eligible Data Centers
Incentives 01/09/2014 Exemptions Extended for Certain Purchases by Eligible Data Centers
         
DIRECTIVE:        
         
TAX TOPICS:      
         
RPM:        
         
         
WTD:        
  32 WTD 46 11-0081 02/27/2013 RCW 82.04.192, RCW 82.04.050: RETAIL SALE – DIGITAL AUTOMATED
SERVICES. Domain name registration services purchased from a domain name registrar are “digital automated services” under RCW 82.04.192(3)(a).
  32 WTD 46 11-0081 02/27/2013 RCW 82.04.050, RCW 82.04.190: RETAIL VS. WHOLESALE SALE –
CONSUMER – END USER. Computer data center’s purchase of digital automated services from a domain name registrar for resale to its own customers is a wholesale sale.
  32 WTD 46 11-0081 02/27/2013 RCW 82.04.050, RCW 82.04.190: RETAIL VS. WHOLESALE SALE –
CONSUMER – END USER. Computer data center’s sales of digital automated services to its customers are “retail sales” under RCW 82.04.050(8)(a).
  33 WTD 372 13-0339 07/31/2014 RCW 82.04.(2)(g): B&O TAX –– “DIGITAL GOODS” -- DIGITAL ENHANCEMENT – BUSINESS PURPOSES. “Photoshop enhancement” of digital photographs for businesses for use in their online advertising is the “altering” or “improving of digital goods subject to the retailing classification of the B&O tax.
  33 WTD 372 13-0339 07/31/2014 RCW 82.08.02087: RETAIL SALES TAX – “DIGITAL GOODS” – DIGITAL ENHANCEMENT – BUSINESS PURPOSE. “Photoshop enhancements” performed on digital photographs that will be used for solely business purposes are exempt from retail sales taxes when customers provide Digital Products and Remote Access Software Exemption Certificates.
         
OTHER: