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 156 Abstract, title insurance and escrow businesses.
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
       
WAC: 458-20-156   03/15/1983 Abstract, title insurance and escrow businesses.
         
       
RCW: 82.04.050   1997 "Sale at retail," "retail sale."
  82.04.290   1995 Tax on selected business services, financial businesses, or other business or service activities.
         
ETA: 3038.2009 2/2/09 Deeds of trust - Trustee fees
  288.04.156 11/18/66 DEEDS OF TRUST--TRUSTEE FEES Revised 2/2/09 See ETA 3038.2009
  387.08.156 6/19/70 TITLE INSURANCE COMPANIES' RETAIL SALES TAX LIABILITY UPON SUPPLIES Cancelled 1/29/09 This ETA states that title insurers must pay retail sales tax on their purchase of supplies. There is no need for this document as WAC 458-20-156 explains that retail sales tax applies to purchases of supplies by abstract, title insurance, and escrow businesses.
         
       
INDUSTRY GUIDES:      
         
         
SPECIAL NOTICES:      
Economic Nexus 05/28/2010 New "Economic Nexus" in Washington State May Impact "Foreign Corporations"
Economic Nexus 05/28/2010 New Apportionment Method
Economic Nexus 05/28/2010 Tax Attorneys and CPAs New "Economic Nexus" in Washington State May Impact Your Clients
Economic Nexus 05/28/2010 Registered Out-of-state Businesses Currently not Reporting Income from Service Activities - New Apportionment for Certain Income
Economic Nexus 09/10/2010 B&O Tax Reporting Requirement Continues After Business Activity Stops (Trailing Nexus)
IAG: 03.01   01/01/2001 Taxability of Credit Bureau Services Cancelled 06/30/05
         
       
DIRECTIVE: 8156.1   05/05/1987 Special Charges Related to EscrowsCancelled 07/17/02 Special Charges Related to Escrows--This directive explains that consistent with the holding in Det. 87-100, 2 WTD 433 (1987), charges by escrow businesses to complete a federal information return are retail sales.This information is no longer needed.
  8156.2   06/22/1988 Title Insurance Agents Cancelled 02/25/02
         
       
RPM: None      
         
       
WTD: 2 WTD 433 87-100   ESCROW BUSINESS.When an escrow business charges its customers for the preparation of an "information return" required by the IRS, the business is making a retail sale.
  4 WTD 241 49 Wn APP 662   BUSINESS AND OCCUPATION TAX -- CLASSIFICATIONS -- TITLE INSURANCE BUSINESS.A business which performs title records searches and produces title reports, with a very small part of its fee representing the cost of title insurance which it issues as agent for an insurer, is properly classified for business and occupation tax purposes as an abstract, title insurance, and escrow business under RCW 82.04.050(3).
  5 WTD 265 88-170   RETAIL SALE -- CREDIT BUREAU BUSINESS -- CHECK GUARANTEE AND VERIFICATION -- INFORMATION SERVICES DISTINGUISHED.A business's check guarantee and reporting service on bank checks for its merchant subscribers and its account screening service fordepository customers both fall within the definition of a "credit bureau business" as that term is used in RCW 82.04.050.
  7 WTD 316-7 89-237   DELIVERY CHARGES -- ESCROW BUSINESS - RUSH SERVICES -- GROSS PROCEEDS OF SALES -- SELLING PRICE:Charges for "rush services" are "delivery costs" which are to be included as part of the measure of both the B&O tax and the Retail Sales Tax.See Det. 88-21, 5 WTD 49 (1988).
  11 WTD 285 91-316   B&O TAX -- RETAILING -- SERVICE -- ESCROW AGENTS -- ATTORNEYS -- SEPARATE BUSINESS.Attorneys performing escrow services are performing legal services and taxable under the Service classification of the business and occupation tax.However, where the escrow services are performed by a completely separate department of a law firm, none of the services are performed by attorneys, and the client is specifically advised that the firm is acting as an independent escrow agent and not as attorneys, the services are escrow services and taxable under the Retailing classification of the B&O tax and retail sales tax.
  11 WTD 493 91-295   RETAIL SALES TAX -- TITLE PLANT -- TANGIBLE OR INTANGIBLE.Title plant microfiche records are tangible personal property subject to retail sales tax.
  11 WTD 493 91-295   RETAIL SALES TAX -- TITLE INSURANCE PRIORS -- RESALE.Sales tax paid for copies of prior title insurance policies or "priors" may not be credited against sales tax collected on sales of policies for which those priors are used.
  12 WTD 165 92-128   ESCROW -- EXCHANGE FACILITATOR.Fees paid to a facilitator to hold funds from sales of real estate to be used to purchase like kind property for tax deferred exchanges under I.R.C. 1031 are retail sales.THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 93-269ER, 14 WTD 153, (1995) & DET.NO. 99-032, 18 WTD 434 (1999).
  12 WTD 305 90-231A   ESCROW AGENTS -- ESCROW FEES -- TRUSTEE'S FEES -- DEEDS OF TRUST -- SERVICE AND RETAILING B&O TAX -- RETAIL SALES TAX.Amounts received by an escrow company from activities relating to deeds of trust are generally subject to Retailing classification of the B&O tax and are subject to Retail Sales Tax unless the escrow company is named trustee on the deed of trust and derives its fees from services rendered in that capacity.
  12 WTD 305 90-231A   ESCROW AGENTS -- ESCROW FEES -- TRUSTEE'S FEES -- DEEDS OF TRUST -- COLLECTION CONTRACTS -- SERVICE AND RETAILING B&O TAX -- RETAIL SALES TAX.Amounts received by an escrow company from activities relating to deeds of trust are generally subject to the retailing classification and are subject to retail sales tax unless such activities involve collection contracts that do not involve an escrow.
  18 WTD 194 98-160E   B&O TAX - RETAIL SALES TAX - ESCROW - ESCROW AGENT.Rule 156 adopts the RCW 18.44.010 statutory definition of "escrow" and "escrow agent" found in the Escrow Agent Registration Act, and this statutory definition is necessarily subject to further interpretation given it by courts and, because it is ambiguous, by the longstanding interpretations given to it by the agency charged with its administration and enforcement.
  18 WTD 194 98-160E   B&O TAX - RETAIL SALES TAX - ESCROW - ESCROW AGENT - DEFINITION.Generally, an escrow agent is an objective, expert "third party" who acts as a stakeholder for both the buyer and seller in a transaction and who is charged by the instructions of the principal parties with receiving the necessary legal instruments, funds, or properties and upon the occurrence of a specified event or performance of a prescribed condition, delivering the items to the parties entitled to receive them.
  18 WTD 194 98-160E   B&O TAX - RETAIL SALES TAX - ESCROW - FACTORS.When a taxpayer is not registered as an escrow agent under RCW 18.44.010, the Department will find that the taxpayer is engaging in escrow business activities when the following conditions exist: (a) Delivery of Instruments is conditional and based upon binding and enforceable underlying contracts, (b) Parties intended and agreed to form an escrow, and (c) Closing Instructions and deliveries into escrow are irrevocable.
  18 WTD 260 Withdrawn See ETA 3133.2012 98-101 10/31/2003

The taxpayer in this determination is engaged in the business of escrow and closing of vessel sale transactions. Standard practice had been that upon closing of a transaction involving a vessel dealer the taxpayer would remit the sales tax collected on the sale to the selling vessel dealer. The taxpayer requested a ruling that it be permitted to collect and pay sales or use tax directly to the Department of Licensing when the vessel dealer was acting as an agent or broker for a vessel owner. This would relieve the vessel dealer of the duty to remit the collected retail sales tax to the Department of Revenue. The determination granted the taxpayer's request on the basis that there was no legal bar to the taxpayer collecting and remitting sales tax on behalf of dealers, as their agent.

This determination has been cancelled because the conclusion is incorrect. The Department of Licensing is by law only authorized to collect use tax on behalf of the Department of Revenue. Thus, in a transaction not involving a vessel dealer and where the owner/seller is not registered with the Department, the taxpayer as agent of the buyer may remit use tax to the Department of Licensing at the time of vessel registration. There is no statutory authority for remitting collected retail sales tax to the Department of Licensing. Consistent with RCW 82.08.040 and WAC 458-20-159 (Consignees, bailees, factors, agents and auctioneers), the selling vessel dealer as agent of the vessel owner is responsible for collecting and remitting retail sales tax to the Department of Revenue.

  18 WTD 372 99-018   BUSINESS AND OCCUPATION TAX - RECONVEYANCE FEES PAID TO TRUSTEE.The receipt of a reconveyance fee by a trustee under a deed of trust is subject to the business and occupation tax under the service and other activities classification.This rule applies whether the trustee was the original named trustee or is a substituted trustee.
  18 WTD 372 99-018   RETAIL SALES TAX - RECONVEYANCE FEES PAID TO A TITLE INSURANCE OR ESCROW COMPANY.When a title insurance company or escrow company receives reconveyance fees it was not entitled to receive because it was not the named trustee, the receipt of those fees is subject to the retail sales tax and retailing business and occupation tax.
  18 WTD 434 99-032   B&O TAX - RETAIL SALES TAX - ESCROW - ESCROW AGENT.Rule 156 adopts the RCW 18.44.010 statutory definition of "escrow" and "escrow agent" found in the Escrow Agent Registration Act, and this statutory definition is necessarily subject to further interpretation given it by courts and, because it is ambiguous, by the long-standing interpretations given to it by the agency charged with its administration and enforcement.
  18 WTD 434 99-032   B&O TAX - RETAIL SALES TAX - ESCROW - ESCROW AGENT - DEFINITION.Generally, an escrow agent is an objective, expert "third party" who acts as a stakeholder for both the buyer and seller in a transaction and who is charged by the instructions of the principal parties with receiving the necessary legal instruments, funds, or properties and, upon the occurrence of a specified event or performance of a prescribed condition, delivering the items to the parties entitled to receive them.
  18 WTD 434 99-032   B&O TAX - RETAIL SALES TAX - ESCROW - FACTORS.When a taxpayer is not registered as an escrow agent under RCW 18.44.010, the Department will find that the taxpayer is engaging in escrow business activities when the following conditions exist: (a) Delivery of instruments is conditional and based upon binding and enforceable underlying contracts, (b) Parties intended and agreed to form an escrow, and © Closing instructions and deliveries into escrow are irrevocable. [OVERRULES 12 WTD 165 in part]
  32 WTD 1 10-0344 01/10/2013 RULE 156; RCW 82.04.050(3)(b) RCW 82.08.020: RETAIL SALES TAX – RETAILING B&O TAX – ESCROW SERVICES. An escrow business’s charges for courier services, reconveyances of deeds of trust, wire transfers, and similar escrow services are subject to retail sales tax and retailing B&O tax when the escrow business orders those services from third parties on its own account and incurs liability for them.
  32 WTD 198 12-0374 09/09/2013 RULE 156; RCW 82.04.050:  B&O TAX – RETAIL SALES TAX –
ESCROW SERVICES – RECONVEYANCE FEES – DOCUMENT PREPARATION CHARGES.  Reconveyance fees and document preparation charges received by an escrow company were subject to the retail sales tax and retailing business and occupation tax.
       
       
         
       
OTHER: