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WAC170 Constructing and repairing of new or existing buildings or other structures upon real property.
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
WAC: 458-20-170   09/08/1987 Constructing and repairing of new or existing buildings or other structures upon real property.
RCW: 82.04.040   1961 "Sale", "casual or isolated sale"
  82.04.050   1993 "Sale at retail", "retail sale"
  82.04.051   1999 "Services rendered in respect to"--Taxation of hybrid or subsequent agreements.
  82.04.070   1961 "Gross proceeds of sales."
  82.04.090   1975 "Value proceeding or accruing."
  82.04.190   1998 "Consumer."
  82.04.220   1961 Business and occupation tax imposed.
  82.04.250   1993 Tax on Retailers
  82.04.270   1994 Tax on Wholesalers
  82.04.280   1998 Tax on Public Road Construction -- Government Contracting.
  82.04.290   1993 Tax on Selected Business Services, Financial Businesses, or Other Business or Service Activities.
  82.04.390   1961 Exemptions -- Amounts derived from sale of real estate.
  82.04.470   1993 Resale certificate--Burden of proof--Tax liability--Rules--Resale certificate defined.
  82.08.020   1992 Retail Sales Tax Imposed
  82.08.050   1993 Buyer to pay, seller to collect tax--Statement of tax--Exception--Penalties.
  82.12.020   1983 Use Tax imposed.
  82.14.030   1989 Sales and Use taxes authorized -- Additional taxes authorized -- Maximum rates.
  82.08.998   2008 Exemption - Weatherization of a residence
         
ETA: 3024.2011   10/03/2011 Public Works Contracts
  3170.2012 01/10/2012 Sales Tax Sourcing for Installed Manufactured and Modular Homes
  3111.201 06/24/2010

B&O Tax Exemption for Property Managers (RCW 82.04.394)-On-Site Personnel Working at Multiple Properties. RCW 82.04.394 provides a B&O tax exemption for amounts received by a property management company from the owner of a property for gross wages and benefits paid to on-site personnel.
ETA 3111 explains how this B&O tax exemption provided to property management companies applies when on-site personnel work at multiple properties.

The Department has updated this ETA to recognize provisions of 2ESSB 6143 Part XII (Chapter 23, Laws of 2010 1st Special Session). This legislation amended RCW 82.04.394 to restrict the exemption to those amounts received by:

A "non-profit property management company" from the owner of a property, or
A property management company from a "housing authority."

  3024.2009 2/2/09 Public works contracts
3053.2009 2/2/09 Form oil purchased by building contractors
3061.2009 2/2/09 Amounts awarded for costs not included in the contract
3062.2009 2/2/09 Amounts paid under a penalty clause
3067.2009 2/2/09 Business & occupation tax: Contract assignments
3075.2009 2/2/09 Condominiums
3138.2009 2/2/09 Measure of Retail Sales Tax on a Time and Materials Contract When the Contractor Includes the Retail Sales Tax Paid on Rented Equipment
3152.2009 2/2/09 Off-site component fabrication by speculative builders
17.04.170 7/1/66 LABOR AND SERVICES OF A SUBCONTRACTOR Cancelled effective 02/28/07 This document explains that where a taxpayer furnishing and installing concrete forms and form supports is contractually responsible for the quality of the finished concrete work, the taxpayer is subject to the wholesaling B&O tax as a subcontractor and is not in the business of “furnishing scaffolding.” There is no need for this document.
46.04.170 7/8/66 JOINT VENTURE AGREEMENT:  A PRIME CONTRACT OR A SUBCONTRACT Cancelled effective 02/28/07 This document states a series of facts and concludes that a joint venture existed. However, the ETA does not state the criteria for determining if a joint venture exists. Numerous Determinations have addressed the criteria to be treated as a joint venture. See, e.g. : Det. No. 87-93, 2 WTD 411, 416 (1987); Det. No. 88-14, 5 WTD 19, 24 (1988); Det. No. 88-155, 5 WTD 179 (1988); Det. No. 90-108, 9 WTD 231 (1990); Det. No. 98- 8, 17 WTD 236 (1998); Det. No. 98-214, 19 WTD 201 (2000); and Det. No. 05-0304, 26 WTD 021, (2006).
131.04.170 8/5/66 CONSTRUCTION COMPANY AS AGENT FOR OWNER Cancelled effective 02/28/07 This document addresses a situation where a taxpayer was hired to perform all construction work the owner might request over a three-year period. The owner deposited monies into special accounts, from which the taxpayer alone was authorized to make withdrawals to purchase materials and labor. The ETA explains that amounts paid by the owner to the taxpayer were a retail sale under RCW 82.04.050 (definition of “retail sale”), and only those amounts for purchases of materials and subcontract labor in the name of and for the account of the owner were excludable from tax. While the result of the ETA may be correct, it does not recognize or address RCW 82.04.051 (“services in respect to” constructing).
275.08.170 9/30/66 DEEDING OF LAND TO CONTRACTOR BUILDING HOUSE FOR LANDOWNER - This document explains that the charge for building a house is a retail sale even if the landowner first deeds the land to a contractor, who after construction then sells or deeds the property back to the original landowner.  This issue is specifically addressed in RCW 82.04.050 (2)(c) and WAC 458-20-170 (Constructing and repairing of new or existing buildings or other structures upon real property).  Cancelled by ETA 2003 -2s 6/30/00.
276.08.170 9/30/66 SALES TAX COMPUTED ON A CONTRACT PRICE INCLUDING SALES TAX PAID BY CONTRACTOR Revised 2/2/09 See ETA 3138.2009
374.08.170 6/12/70 FORM OIL PURCHASED BY BUILDING CONTRACTORS Revised 2/2/09 See ETA 3053.2009
376.08.170 6/12/70 SPECULATIVE BUILDERS IN JOINT VENTURES Cancelled 1/29/09. The ETA addresses a situation where a taxpayer alleged that a joint venture existed between the taxpayer (a land developer), a speculative builder, and three contract vendors. The ETA explains that a taxpayer must prove the existence of a joint venture, and in this case did not do so. This document does not provide any needed guidance. Other documents issued by the Department (e.g., Det. 05-0104, 26 WTD 001, and Det. 99-176, 19 WTD 456) provide more complete guidance on this subject, including recognition of the "common law" principles expressed by Washington's courts.
377.08.170 6/19/70 RETAIL SALES TAX:  CONTRACT REIMBURSEMENTS Revised 2/2/09 See ETA 3061.2009
414.04.109/170 3/1/93 AMOUNTS PAID UNDER A PENALTY CLAUSE Revised 2/2/09 See ETA 3062.2009
433.04.170.171 7/9/71 BUSINESS & OCCUPATION TAX:  CONTRACT ASSIGNMENTS Revised 2/2/09 See ETA 3067.2009
436.04.170 8/11/71 CONSTRUCTION ON LAND OWNED BY CONTRACTOR'S PRINCIPAL STOCKHOLDER -This document explains that construction by a corporation on land owned by a stockholder of the corporation is taxable as a retail sale. This issue is specifically addressed in WAC 458-20-170 (Constructing and repairing of new or existing buildings or other structures upon real property). Cancelled by ETA 2003 -2s 6/30/00.
449.12.170 7/3/72 TURNKEY PROJECTS SOLD TO HOUSING AUTHORITIES - This document includes incorrect information. Referring to turnkey contracts to build for housing authorities, this document explains that the landowner/contractor is taxed as a speculative builder if the right of possession does not transfer at the time the parties enter into the construction contract. These persons are generally subject to the government contracting tax classification.  Cancelled by ETA 2003 -2s 6/30/00.
458.08.170 8/20/73 CONDOMINIUMS Revised 2/2/09 See ETA 3075.2009
488.04.170.105 7/31/74 CONDITIONS UNDER WHICH A CONTRACTOR-OWNER RELATIONSHIP EXISTS Cancelled effective 02/28/07 This document addresses the situation where a contractor and an owner enter into an agreement to transfer employees from the contractor to the owner during the period of construction, and when the construction was completed transfer the employees back to the contractor. The ETA explains that it is the Department’s position to examine the conduct of the parties and the agreement between them to determine whether an employer-employee relationship exists. In this case, the Department held that the amounts paid to the employees were part of the measure of tax for the construction project. While the conclusion is correct, the ETA doesn’t consider the employer-employee relationship criteria of City of Tacoma v. William Rogers Co., 148 Wn.2d 169, 178, 60 P.3d 79 (2002), nor those stated in WAC 458-20-105.
489.04.170 7/31/74 LESSEE AS SPECULATIVE BUILDER -Cancelled effective December 29, 2006. This document quotes language from the statutory definitions of “consumer” (RCW 82.04.190) and “retail sale” (RCW 82.04.050) as the basis for determining that a lessee who constructs a building on property to which the lessee holds a thirty year lease is a speculative builder. It is not needed. More detailed information for determining whether a person is a speculative contractor is available in WAC 458-20-170, which explains the attributes of ownership of real estate for distinguishing between a speculative and prime contractor, as well as other documents issued by the Department (e.g., Det. 94-154,
15 WTD 046).
490.04.170.111 7/31/74 INTEREST ON CONSTRUCTION LOAN TAXABLE AS PART OF CONTRACT PRICE Cancelled effective 02/28/07 This document explains that mounts received by a contractor that are attributable to interest the contactor owes on a construction loan must be included in the measure of tax for the construction activity. The interest expense is a part of the contractor’s cost of business. Such amounts are excluded from the measure of tax only if they meet the requirements of WAC 458-20-111 (Advances and reimbursements). This document is not needed.
499.12.170/178 8/15/75 TAX LIABILITY ON MATERIALS PURCHASED BY CONTRACTORS IN IDAHO FOR USE IN WASHINGTON - This document explains that Idaho vendors are not permitted to accept resale certificates from Washington contractors because under Idaho law all construction contractors are defined as consumers of construction materials.  The document further provides that the construction contractor can avoid the Idaho tax only by taking delivery of the materials outside Idaho.  This information is incorrect as Idaho law now provides a tax exemption under certain circumstances for materials sold to contractors who subsequently incorporate those materials into real property.  Cancelled by ETA 2003 -2s  6/30/00.
INDUSTRY GUIDES:   Oct-05 Construction Guide
SPECIAL NOTICES:      
Subject Title Reference:      
Property Management 07/18/2011 New Law Expands Property Management B&O Tax Exemption
Property Management 05/13/2010 New Law Limits Property Management B&O Tax Exemption
Tax Avoidance 05/27/2010 Department Authority to Disregard Tax Avoidance Transactions
Manufactured Housing     10/16/1998 Sales Tax Collection Requirement on Sales of Manufactures Housing
Agricultural     05/02/2000 Farm Worker Drinking Water Special Notice
Agricultural     08/06/2001 The Tax Application for Tree and/or Stump Removal from Existing Orchards
      06/23/2003 Environmental Remedial Action Sunsets
Solar Water Systems     05/30/2006 Solar Water Systems - Tax Exemption
DIRECTIVE: 7170.1 7170.2 7170.2A   07/17/2002 Cancelled 7/17/2002 - Use Tax on Government Contracting Projects--The United States Supreme Court sustained the government contracting tax applications for Washington in 1983, even though the ultimate economic burden of the tax is borne by the United States Government (Washington v. US, 75 L.Ed 2d 264, (1983)). These directives were issued while the Department was negotiating with federal agencies regarding direct payment of use tax owed by contractors on contracts awarded prior to October 1, 1983. Their purpose was to provide guidance to Audit personnel to ensure uniformity for tax-reporting instructions provided to and audit examinations of contractors performing construction services for the U.S. Government during this period. This information is no longer needed. They are being formally cancelled because copies of these directives have been included in the instructional materials used to train auditors on tax issues related to the construction industry.
  8170.1   10/12/1987 Proper Tax Classification For Concrete Pumping Repealed 6/30/2000 - This document is out of date and no longer serves a useful purpose. It explains that the Thurston County Superior Court in Sunnen Crane Service, Inc. v. Department of Revenue, Cause No. 85-2-01075-0 found that crane-lifting operations directly related to construction are wholesale or retail activities. It then states that concrete pumping is to be similarly treated. The Sunnen Crane decision is an inappropriate basis upon which to determine the taxability of either crane lifting or concrete pumping. Chapter 25, Laws of 1993, sp. sess, amended RCW 82.04.050(4) to specifically include the rental of equipment with operator to the definition of retail sale. This document also fails to recognize the 1996 amendment of WAC 458-20-211(Leases or rentals of tangible personal property, bailments).
RPM: None      
WTD 2 WTD 19 86-296   RETAILING B & O -- RETAIL SALES TAX -- PRIME CONTRACTOR -- SUBCHAPTER S CORPORATION -- CONSTRUCTION ON LAND OWNED BY CORPORATION'S SOLE SHAREHOLDER -- ETB 436. Construction by a corporation on land owned separately by its sole shareholder is a sale at retail, not speculative building.
  2 WTD 201 87-42   RETAIL SALES TAX -- SPECULATIVE BUILDER -- NO PROFIT -- FORECLOSURE -- DEPRESSED ECONOMY. There is no provision in the law for a speculative builder's exemption from the retail sales tax merely because the building which has been constructed is not resold as planned, because the investment does not yield a profit, or because the project is an entire loss because of bank foreclosure. As an administrative agency, the Department of Revenue is empowered only to uphold law which has been enacted by the legislature, and accordingly is unable to grant exemptions for which the statutes do not provide. Likewise, there is no authority in the law for exemption from tax because a business has provided employment through depressed economic times.
  2 WTD 275 87-61   SALES TAX -- CONTRACTOR -- SPECULATIVE BUILDER -- ALLOCATION -- CLARIFIED. When speculative builder sells or contracts to sell property upon which he is presently constructing a building, the rule provides that retail sales tax applies to "that portion of the sales price allocable to construction done after the agreement." "Allocable" does not mean "as may be allocated by the parties in their agreement," but refers to the portion of the sales price actually related to construction that occurs after the agreement.
  2 WTD 361 87-71   RETAIL SALES TAX -- CONSTRUCTION CONTRACT -- SETTLEMENT- AGREEMENT -- MEASURE OF TAX. Retail sales tax due on lump-sum settlement award paid to contractor in contract dispute. Taxable amount reduced by amount of sales tax separately state on unpaid invoices.
  2 WTD 361 87-71   RETAIL SALES TAX -- CONSTRUCTION CONTRACT -- SETTLEMENT- AGREEMENT -- MEASURE OF TAX -- INTEREST. Interest paid to a contractor because of late payments is not included as part of the selling price subject to retail sales tax. Where settlement award did not show how much, if any, of an award was for interest, retail sales tax due on total amount as part of the contract costs.
  2 WTD 411 87-93   CONSTRUCTION CONTRACT -- JOINT VENTURE -- FACTS INDICATING. The following facts indicated the taxpayer and another party constructed a house as a joint venture rather than as "prime" and "sub" contractors or as an employer and a employee: 1) both parties had met with the architect and owner to discuss the plans; 2) both of the parties' names were on the contract itself; 3) draws from the bank had both of the parties' names on them; and 4) the parties split the profit.
  2 WTD 411 87-93   JOINT VENTURE -- NATURE OF RELATIONSHIP. A joint venture is in the nature of a partnership, and the rights, duties, and liabilities of the parties are generally tested by the same rules. ( Barrington v. Murry cited.)
  2 WTD 411 87-93   JOINT VENTURE -- TAX LIABILITY OF EACH PARTY TO JOINT VENTURE. Joint venturers are jointly and severally liable for everything chargeable to the joint venture.
  2 WTD 411 87-93   CONSTRUCTION CONTRACT -- JOINT VENTURE -- REGISTRATION OF CONTRACTORS -- ETB 46. A joint venture is deemed registered under chapter 18.27 RCW if any one of the parties to the joint venture is registered.
  2 WTD 411 87-93   CONSTRUCTION CONTRACT -- JOINT VENTURE -- TAX CONSEQUENCES OF. The tax consequences applicable to joint ventures are proper when: 1) the joint venture was specifically formed to perform the contract work, 2) the formation of the joint venture occurred before any of the work required by the contract had been undertaken, 3) the contract work was in fact performed by the joint venture, 4) the funds were handled as a joint venture rather than as separate funds of any party to the joint venture agreement, and 5) there is a contribution of money, property and/or labor so that any profit or loss incurred by the joint venture is proportionately shared by all joint venturers.
  3 WTD 91 87-143   B&O TAX -- SERVICE V. WHOLESALING -- CRANE SERVICES -- CONSTRUCTION PROJECT. Persons who rent or lease equipment with an operator for construction purposes to prime or subcontractors are deemed themselves to be subcontractors. A provider of a crane with an operator for construction projects is B&O taxable under Wholesaling. Use of the crane must be reasonably related to construction, but the actual installation/attachment requirement of previous determinations is rejected. To the extent that Determinations 82-45, 85-65, 85-65A, and 85-151 conflict with this ruling, they are hereby overruled.
  3 WTD 91 87-143   MISCELLANEOUS -- STATUTORY CONSTRUCTION -- "INCLUDES" -- MEANING. The term "includes" is a term of enlargement, not one of limitation. Band of Indians vs. State, 102 Wn.2d 1,682 P.2d 909 (1984).
  4 WTD 21 87-270   RCW 82.04.050 AND RCW 82.04.190 -- RETAIL SALES TAX -- RETAILING B&O -- CONSTRUCTION CONTRACT -- SALE -- SPECULATIVE BUILDER -- RIGHT TO POSSESSION -- ETB 449. When a speculative builder sells or contracts to sell property upon which he is presently constructing a building, all construction done subsequent to the date of such sale or contract constitutes a retail sale. The "sale" does not take place when a purchase agreement is executed, but when the purchasers have the "right of possession" to the real property being constructed . (Riley Pleas v. State and Rigby v. State cited.)
  4 WTD 293 87-354   RETAIL SALES TAX -- PRIME CONTRACTOR. Prime contractors are required to collect retail sales tax from consumers, measured by the full contract price.
  5 WTD 19 88-14   B&O TAX--RETAIL SALES TAX--RE JOINT VENTURE -- CONSTRUCTION CONTRACT -- FORMATION -- TAX CONSEQUENCES. A joint venture was found not to exist where no evidence of its creation was presented. A subsequent written joint venture agreement was not given retroactive effect. The transactions were thus treated as custom construction rather than speculative building. The guidelines set forth in 2 WTD 411 (1987) applied.
  5 WTD 125 88-39   CONSTRUCTION AND SERVICES CONTRACTS -- "IN RESPECT TO" CONSTRUCTION. When a construction and service (feasibility) contract are awarded to the same contractor, the Department looks to a number of factors to determine whether the service contract was "in respect to" construction and taxable as a retail sale.
  5 WTD 205 88-156   SPECULATIVE BUILDERS -- RETAIL SALES TAX -- INDEPENDENT CONTRACTOR -- LABOR. Speculative builders must pay retail sales tax to independent contractors performing labor and services on speculative construction projects.
  5 WTD 205 88-156   SPECULATIVE BUILDER -- INDEPENDENT CONTRACTOR -- LABOR AND SERVICES. Person performing labor and services on speculative building projects held to be an independent contractor and sales tax due on the charges therefore. The fact that the independent contractor was the builder's son found to be irrelevant since billings and payments to this individual were treated like any other independent contractor performing work on the projects.
  5 WTD 311 88-183   SUBCONTRACTOR -- "IN RESPECT TO" -- "EJUSDEM GENERIS" -- " PILOT CAR" AND "FLAGGING". Using the "ejusdem generis" canon of construction, where general words follow specific enumerations, the general words will be construed as applying only to things of the same general class. Thus, taxpayer's activities of "flagging" and " pilot car" are not included in Rule 170 as services rendered in respect to construction.
  5 WTD 373 88-199   RETAIL SALES TAX -- SPECULATIVE BUILDER -- WHAT CONSTITUTES -- JOINT VENTURERS -- ETB 275.08.170. A "speculative builder" means a person who constructs buildings for sale or rental upon real estate owned by the builder. The deeding of a half interest in land owned by one joint venturer to a co-venturer, a contractor, for security purposes only did not make the contractor or their joint venture the owner of the land.
  5 WTD 373 88-199   RETAIL SALES TAX -- CONSTRUCTION CONTRACT --JOINT VENTURE -- FACTORS DETERMINING. The tax consequences applicable to joint venturers are proper when: 1) the joint venture was specifically formed to perform the contract work, 2) the formation of the joint venture occurred before any of the work required by the contract had been undertaken, 3) the contract work was in fact performed by the joint venture, 4) the funds were handled as a joint venture rather than as separate funds of any party to the joint venture agreement, and 5) there is a contribution of money, property and/or labor so that any profit or loss incurred by the joint venture is proportionately shared by all joint venturers. Sale treated as retail sale between a contractor joint venturer to a co-venturer where the funds were not handled as joint venture funds and the contractor was guaranteed payment from the co-venturer.
  6 WTD 39 88-224   RETAIL SALES TAX -- SPECULATIVE BUILDER -- CUSTOM CONTRACTOR -- DISTINCTION. A speculative builder is one who builds homes for sale or rent on land it owns. A custom contractor is one who builds homes for consumers on their land.
  6 WTD 73 88-239   RETAIL SALE -- SERVICES RENDERED IN RESPECT TO CONSTRUCTION. Charges for designing testing and furnishing tangible personal property and charges for engineering services for monitoring the installation of the property by a third-party contractor are subject to retail sales tax where the charges are part of one contract awarded to the same contractor. Such services are rendered "in respect to" the construction. Washington Water Power Co. and Chicago Bridge & Iron cited.
  6 WTD 113 88-250   SALES TAX--SETTLEMENT -- CLAIM FOR WORK PERFORMED -- CLAIM FOR TORTUOUS DAMAGES. The taxpayer is liable for sales tax on the amount of a law suit settlement paid to a contractor. The contractor made a claim against the taxpayer for both extra work performed and destruction of business, a tort. There was no basis for determining that any portion of the settlement was attributable to tortuous damages. Therefore, the entire amount of the settlement was attributed to the claim for work performed and held subject to sales tax. Excise Bulletins 413.04.109 and 444.08.170.
  6 WTD 133 88-256   RETAIL SALES TAX -- DEDUCTION -- CONTRACTOR -- BUILDING PERMIT FEES -- REIMBURSEMENT OF. The reimbursement of building permit fees to a construction contractor is not deductible from the measure of the contractor's retail sales tax absent a showing that the contractor has no primary or secondary liability for such fees.
  6 WTD 179 111WN2D154   Business and Occupation Tax--Deduction for Retainage. When, pursuant to RCW 60.28.010, a government retains a portion of the contract price owed a contractor as security for payment of subcontractors, materialmen, and taxes, the amount retained is not deducted from gross income for purposes of computing the contractor's business and occupation tax liability.
  6 WTD 427 88-373   RETAIL SALES TAX -- RECORDS -- SEPARATELY STATED -- PRESUMPTION. Retail sales taxes paid to a builder must have been separately stated on the invoice, and the invoice be made available to the Department, before a determination can be made that the tax has been paid. Otherwise, under the provisions of RCW 82.32.070 and 82.08.050, it is conclusively presumed that the tax has not been paid.
  7 WTD 1 88-352   RETAIL SALES TAX -- LEASE OF CRANE WITH OPERATOR -- RENTAL PAYMENTS. Inasmuch as the Court of Appeals has found that the rental of a crane or similar equipment with operator can be a lease just as is the rental such equipment without an operator, the former situation, if established, like the latter, is a retail sale and the rental payments are subject to sales tax.
  7 WTD 79 88-459   RETAIL SALES TAX--ENGINEERING SERVICES--SERVICES RENDERED IN RESPECT TO CONSTRUCTION--SUPERVISORY SERVICES. Engineering services rendered in Washington in respect to the installation of turbines, even though the services were only supervisory services, are sufficient to subject the entire contract charge to retailing B&O tax. Accord: Det. No. 88-239, __ WTD __, (1988).
  7 WTD 157 89-58   RETAIL SALES TAX -- USE TAX -- BUILDING -- CONSTRUCTION OF -- BY OWNER. An owner of real property on which a building is constructed is a consumer and is required to pay retail sales tax to the building contractor.
  7 WTD 163 89-63   CONTRACTING -- GENERAL CONTRACTOR -- AGENCY -- BOISE CASCADE -- REQUIREMENTS. The requirements of agency in tort and/or contract law are not the same as those necessary in tax. In order to be considered an agent for state tax purposes, a contractor must be " so assimilated" into the owner as to be considered one of its constituent parts. Boise Cascade Corp. v. State, 3 Wn.App. 78 (1970), review denied, 78 W.2d 995 (1970).
  7 WTD 163 89-63   CONTRACTING -- SERVICES IN RESPECT TO CONSTRUCTION -- PROFESSIONAL SERVICES. When services are rendered in respect to construction, and arranged by the general contractor, they will be considered part of the contract and subject to retailing B&O and retail sales tax, even though performed before the contract was signed.
  7 WTD 201 89-112   USE TAX -- SUBCONTRACTORS -- CONSUMABLE SUPPLIES -- CONCRETE FORM COATING. Concrete form coating found to be consumed in the process of curing concrete after it was poured in the coated forms and not a component part of the finished structure.
  7 WTD 325 89-252   CONSTRUCTION -- ACTING AS TRUSTEE FOR BUYER. A transfer between a contractor and a buyer is not the "mechanical performance of the obligation" of a trust, it is a retail sale under the law of the state of Washington. Senfour Investment Company v. King County, 66 Wn.2d 67, 401 P.2d 319 (1965).
  8 WTD 45 89-328   RETAIL SALES TAX -- LEASE OF CRANE WITH OPERATOR -- RENTAL PAYMENTS. Inasmuch as the Court of Appeals has found that the rental of a crane or similar equipment with operator can be a lease just as is the rental of such equipment without an operator, the former situation, if established, like the latter, is a retail sale and the rental payments are subject to sales tax.
  8 WTD 451 89-548   RETAIL SALES TAX -- TANGIBLE PERSONAL PROPERTY -- SPECULATIVE BUILDER -- PURCHASE FOR RESALE -- TURN KEY PROJECT. Retail sales or use tax does not apply to the purchases of tangible personal property, as furniture, equipment, etc., purchased by a speculative builder as part of a "turn key" project, if the property was purchased solely for resale in the regular course of business without intervening use by the builder.
  9 WTD 45 90-4   RETAILING B&O TAX--WHOLESALING B&O TAX--PRIME CONTRACTOR--SUBCONTRACTOR--PRINCIPAL/ AGENCY RELATIONSHIP--JOINT VENTURE. Where one entity bids and wins a construction contract and retains another entity to perform the work, a contractor/subcontractor relationship is established with Retailing/Wholesaling B&O tax consequences respectfully. Principal/agency relationship between the parties or joint venture status not found to be present.
  9 WTD 71 90-34   B&O TAX -- GOVERNMENT CONTRACTING -- MAINTENANCE OF LAWNS AND GROUNDS -- GOLF COURSE. A person who mows and waters the grass and otherwise maintains the grounds and golf course at a U.S. Army base is a landscape gardener B&O taxable under the Service category. (Changed by 1993 Legislation)
  9 WTD 143 90-74   RETAILING B&O TAX -- RETAIL SALES TAX/USE TAX -- CONSTRUCTION -- ACTING AS A PARTNER OR PRIME CONTRACTOR. When taxpayer supervises construction, etc., on a project owned by a partnership of which it is a member, it is acting as a partner when it receives no compensation for its efforts other than its partner share of the profits. Where the taxpayer receives an amount for its efforts otherwise, it is subject to tax as would be any other independent provider of materials or services. Accords: 87-254, 3 WTD 431 (1987); ETB 73.
  10 WTD 149 90-366   RETAILING B&O TAX--SALES TAX LIABILITY--ARCHITECTURAL SERVICES -- RENDERED IN RESPECT TO CONSTRUCTION--SEPARATE CONTRACTS FOR SAME CONSTRUCTION PROJECT--PURE ARCHITECTURAL SERVICES--DESIGN WORK ONLY--SERVICE B&O TAX. Where the taxpayer performs architectural services and construction services contemporaneously on the same project pursuant to separate contracts for each type of service, the income is subject to Retailing B&O tax and sales tax consequences even if the customer is separately billed for each type of service. Pure architectural services, that is, design work only and not part of a construction contract and not rendered contemporaneously at the construction site, is subject to Service B&O tax.
  10 WTD 282 89-248   RCW 82.04.050 -- RETAIL SALES -- SERVICES "IN RESPECT TO" CONSTRUCTION. The statute does not require that services rendered " in respect to" construction be rendered within a written contract for construction in order to be taxable as retail sales; therefore the Department of Revenue cannot impose that requirement.
  10 WTD 282 89-248   RETAIL SALES -- AMOUNTS PAID BY CONTRACTOR AND "REIMBURSED" BY BUYER -- SUBJECT TO SALES TAX. Amounts subject to sales tax, that are paid by a contractor and "reimbursed" by the buyer are properly subject to sales tax, and such tax cannot be credited against the sales tax due on the contractor's fee.
  10 WTD 406 91-051   CONTRACTOR -- PERFORMANCE BOND--GROSS CONTRACT PRICE--PAID BY OWNER. Where the owner pays the performance bond for a construction contract, and the contract states a gross contract price that does not include the bond, the payment is not subject to the sales or use tax and is not part of the construction contract.
  11 WTD 45 90-123   WHOLESALING/RETAILING B&O TAX -- ENGINEERING SERVICES -- WHEN RENDERED IN RESPECT TO CONSTRUCTION. Engineering services rendered "in respect to construction," that is, as part of a construction contract or contemporaneously applied and rendered at the construction site, are subject to Wholesaling or Retailing B&O tax, not Service B&O tax.
  11 WTD 515 91-321   RCW 82.04.050 -- SALES TAX -- USE TAX -- CONSTRUCTION CONTRACTOR -- SUPPLIES CONSUMED. Items such as drill bits and blades used by a contractor in a construction project are considered consumed by the contractor, not resold to the contractor's customer. Sales tax is owed by the contractor on such consumables, notwithstanding the fact that the project owner pays sales tax on the total contract price which includes the consumable supplies. ACCORD: ETB 276, Det. No. 89-248, 10WTD282 (1991), Det. No. 89-112, 7WTD201 (1989).
  12 WTD 29 91-313   RETAILING B&O TAX--USE TAX--REPAIRS OF REAL PROPERTY FOR CONSUMERS. The repair of real property for consumers is an activity taxable as a retail sale. The use of property by the contractor in performing that function is subject to use tax, despite the fact that the repairs are a retail sale and subject to the retail sales tax.
  12 WTD 391 92-204   SPECULATIVE BUILDERS--USE TAX. Substantive ownership interest in land as a matter of record and notice to the whole world is the decisive factor to be determined under Rule 170. Actually acquiring title by deed clearly constitutes ownership under the rule. Housing construction on land owned by the taxpayer is subject to sales or use tax. Speculative builders must pay the tax upon all materials they purchase and on all charges made by their subcontractors. Accord: Reliable Builders, Inc. v. Department of Revenue, Docket No. 17074 (BTA 1978) THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 94-154,
15 WTD 46 (1995).
  12 WTD 571 93-022   SALES TAX -- USE TAX -- ASBESTOS ABATEMENT CONTRACTOR -- SUPPLIES USED BY. Bags used by an asbestos abatement contractor for the disposal of hazardous materials are supplies consumed by that contractor. They are not resold to the contractor's customer. The contractor is liable for sales tax on its purchase of such supplies. Partial Accord: Det. No. 89-112, 7 WTD 201 (1989)
  13 WTD 316 93-159   CONSTRUCTION MANAGEMENT SERVICES -- SERVICES IN RESPECT TO CONSTRUCTION -- RETAIL SALE. A taxpayer who contracts to perform construction management services for a consumer, and who provides an on-site crew to supervise construction, who reviews the progress of construction, who has the authority to agree to on-site change orders on behalf of the owner and who performs some construction work itself on the same project, provides services in respect to construction, as well as actual construction itself, and as such makes a retail sale of those services to the consumer. Those services will be taxed at the retailing B&O rate and are subject to retail sales tax.
  14 WTD 22 93-166   RETAILING B&O TAX -- PRIME CONTRACTOR. Taxpayer corporation which contracted with a real property owners and subcontractors to construct buildings was a prime contractor when the taxpayer provided construction supervision, labor and accounting services; issued resale certificates as a general contractor; required subcontractors to provide it insurance coverage as contractor; and identified itself in contracts and correspondence as the contractor with contractor duties.
  14 WTD 22 93-166   RETAILING B&O TAX -- PRIME CONTRACTOR -- PAYMENT TO THIRD PARTIES BY OWNER -- GROSS INCOME. Taxpayer is a prime contractor subject to assessment based on the total amount of construction costs even if the owner paid the third party suppliers and subcontractors directly. The taxpayer benefited from such payments because they reduced or eliminated the taxpayer's personal liability from the debts. The owner's payments were part of the contract's consideration received by the taxpayer and are considered gross income to the taxpayer.
  15 WTD 46 94-154   SPECULATIVE BUILDERS -- RETAIL SALES TAX -- USE TAX -- OWNERSHIP OF PROPERTY. When determining "ownership" of real property for purposes of distinguishing between "prime contractors" and "speculative builders," record title is but one of the factors to be considered, together with the "attributes of ownership" set forth in Rule 170(2)(a). Overruling Det. No. 92-204, 12 WTD 391 (1993) to the extent inconsistent herewith.
  17 WTD 99 97-227   SERVICES RELATED TO CONSTRUCTION -- EXAMPLE IN RULE. An example or illustration in an administrative rule is a model to help taxpayers understand the application of a rule. Rule 170 does not require services to be contained in a construction contract in order for those services to be "retail sales".
  17 WTD 99 97-227   CONSTRUCTION MANAGEMENT SERVICES -- CLASSIFIED AS RETAIL SALES. Construction management services are classified as retail when those services are provided in respect to construction, which means that construction of new or existing buildings or other structures either has begun or the consumer has obligated itself to build them or to have them built.
  17 WTD 148 97-189   RETAIL SALES TAX -- RETAILING B&O TAX -- CUSTOM CONSTRUCTION -- SPECULATIVE CONSTRUCTION -- BENEFICIAL OWNERSHIP -- ATTRIBUTES OF OWNERSHIP. The mere holding of bare title to property is not determinative of ownership. Ownership is to be determined by the intent of the parties as evidenced by objective factors. Where title holder held title merely for security purposes, and all parties dealt with property as though taxpayers were the owners, taxpayers qualified as speculative builders.
  17 WTD 322 97-115   SALES TAX -- TRUST FUND ACCOUNTABILITY ASSESSMENT -- PUBLIC WORKS CONTRACT -- RETAINAGE -- APPLICATION OF. Retainage paid the Department from a public works contract must first be applied to tax, interest, and penalty liability arising directly out of the project for which it was withheld before it may be used for other state tax arrearages.
  17 WTD 322 97-115   SALES TAX -- TRUST FUND ACCOUNTABILITY ASSESSMENT -- PENALTIES AND INTEREST. A trust fund accountability assessment may include penalties and interest that accrue on the tax debt of a defunct corporation.
  17 WTD 384 98-087   B&O TAX -- SALES/USE TAX -- SPECULATIVE BUILDER -- LICENSING OF. For excise tax purposes, ones status as a speculative builder is not determined by whether that person has been conferred a contractors license by the Department of Licensing.
  18 WTD 378 95-078R   RETAIL SALES TAX RESALE CERTIFICATES CONSTRUCTION: When a contractors customers use the contractors resale certificate to purchase materials and/or labor for use in home construction and pay the vendors directly, the contractor is liable for retail sales tax due on the transactions if the customers fail to pay retail sales tax to the vendors. Such transactions are considered retail sales of materials and/or labor by the contractor to the customers because of the use of the resale certificate.
  18 WTD 420 99-001   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT ARCHITECTURAL 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.
  18 WTD 420 99-001   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT ARCHITECTURAL 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 architectural, administration, inspection, 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.
  18 WTD 420 99-001   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT ARCHITECTURAL SERVICES. Services that involve what are commonly identified as contract administration services under standard AIA contracts, without more, do not constitute services in respect to constructing.
  19 WTD 9 98-194   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING DEVELOPMENT FEES FUNCTIONALLY INTEGRATED. When a taxpayer agrees from a construction projects inception that the taxpayer will develop and construct the project, the development activities are considered functionally integrated with the construction activities. Under such circumstances, the fees from the development and construction phases of the project are subject to retail sales and retailing B&O taxes. In contrast, when the general partner of a limited partnership incurs development costs on a speculative basis, prior to securing investors for the project, those services are not functionally integrated with the construction activity and the development fees are subject to service and other activities B&O tax.
  19 WTD 9 98-194   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT. 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. When a general partner of a limited partnership is paid amounts variously identified as a management fee or a construction supervision fee for providing services customarily performed by a general contractor, those amounts are subject to retail sales and retailing B&O taxes for 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 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 122 98-165   RETAIL SALES TAX -- WHOLESALING -- SERVICES RENDERED IN RESPECT TO CONSTRUCTION -- PUBLIC ROAD CONSTRUCTION -- GOVERNMENT CONTRACTING. A person hired for his skill, knowledge, and expertise in operating a water truck to compact soils at construction sites is rendering services in respect to construction. The person is not merely renting equipment with an operator to perform work under the specific direction of a lessee. The proper tax classification for such activities depends on whether the person is a prime contractor or a subcontractor, and/or whether the construction project is normal retail sale, or public road construction, or government contracting.
  19 WTD 201 98-214   RETAIL SALES TAX -- SPECULATIVE BUILDER JOINT VENTURE PROFIT AND LOSS. Joint ventures can be taxed as speculative builders provided the parties meet the joint venture requirements including the right to share profits and losses as well as control. If one party agrees to be liable to the other party for all of the losses, they are not sharing losses, and not operating as a joint venture.
  19 WTD 201 98-214   RETAIL SALES TAX B&O TAX SPECULATIVE BUILDER TITLE SECURITY. A speculative builder means a person who constructs buildings for sale on land owned by the builder. To determine ownership of the land, record title is only one factor to consider. Legal title to secure financing may be considered a mortgage. Det. No 97-189, 17 WTD 148 (1997) and Det. No. 94-154, 15 WTD 46 (1994).
  19 WTD 270 99-159   COST PLUS CONSTRUCTION CONTRACTS INCLUDABLE EXPENSES Where the entity providing the cost plus services is liable for an expense, that amount is included in the total project cost even if the expense is paid by another individual.
  19 WTD 307 99-263   RETAILING B&O TAX VS. PUBLIC ROAD CONSTRUCTION B&O TAX SERVICES IN RESPECT TO CONSTRUCTING -- WATER DRAINAGE SYSTEMS -- Contractor who installs lines that collect water from downspouts on houses to drain the downspouts into sewer catch basins properly taxed under the retailing classification. Such lines handle runoff from roofs, not the streets and roads in which the lines are constructed.
  19 WTD 385 99-311   DEFERRED RETAIL SALES/USE TAX -- SERVICES NOT RENDERED IN RESPECT TO CONSTRUCTION. An independent contractor hired to manage an office for a construction company was not rendering services in respect to construction because her services did not directly relate to constructing. For example, she did not work at construction sites and did not perform construction activities. Further, she was not responsible for the performance of the constructing; i.e. she did not supervise or direct the constructing. Therefore, payments for her services were not subject to deferred retail sales tax/use tax.
  19 WTD 385 99-311   RETAIL SALES TAX RETAILING B&O TAX FULL CONTRACT PRICE REAL ESTATE COMMISSIONS. A real estate commission paid by a homebuyer to a real estate broker employed by the contractor/seller is included in the full contract price of the house, and seller is liable for retail sales tax and retailing B&O tax on the commission amount unless the seller can show it was not obligated to pay the commission.
  19 WTD 398 99-109   SERVICES IN RESPECT TO CONSTRUCTING ADMINISTRATIVE SERVICES ARCHITECTURAL SERVICES. The review of the progress of capital upgrades is not a service in respect to constructing where the service is included within the overall management service provided because the review was not the predominant activity performed under the management services contract. Where services received were in the nature of professional services normally offered by architectural firms and the degree to which the architects were involved in actual construction was de minimus, the payments to the architects were not subject to retail sales tax.
  19 WTD 423 (Part 1 of 2) 99-011R (Part 1 of 2)   RETAIL SALES TAX RETAILING B&O TAX SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT. 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. To be rendered in respect to construction the services must directly relate to the constructing, the provider of the services must be responsible for the performance of the constructing, and the predominant activity must involve services in respect to constructing. In general, construction management services are directly related to the physical activity of constructing itself. A person who either supervises or directs the work, such as a construction manager, is also considered responsible for the performance. The predominant activity is the one having the greatest importance, influence, authority, or significance.
  19 WTD 423 (Part 2 of 2) 99-011R (Part 2 of 2)   In this case, although some of the projects involved administrative and other services not directly related to the construction, the most significant, important, or predominant activities involved the supervision or direction of the constructing activity. Because the predominant activities were directly related to the constructing activity and the taxpayers agent was responsible for the performance, services rendered on those projects were subject to retail sales tax.
  19 WTD 456 99-176   RETAIL SALES TAX -- RETAILING B&O TAX JOINT VENTURE SPECULATIVE BUILDING. Taxpayers and their co-venturers formed joint ventures because they acquired and contributed land, money, skill, knowledge, and experience to their home-building enterprises while sharing profits and losses without receiving absolute payments for services they respectively rendered. Consequently, retail sales tax and retailing B&O tax were not due on the full contract prices of houses the taxpayers and their co-venturers sold because they were speculative builders.
  19 WTD 643 99-152   RETAIL SALES TAX -- RETAILING B&O TAX -- SERVICES IN RESPECT TO CONSTRUCTING -- CONSTRUCTION MANAGEMENT FOR COMMERCIAL TENANTS. Construction management services provided to tenants in commercial construction projects, that are limited to review, inspection, advising the tenant, and acting as a facilitator in promoting the tenants interests, and do not include performance, supervision, direction, or responsibility for the performance of the constructing activities, do not constitute services in respect to constructing.
  19 WTD 891 99-346   RETAILING VS. SERVICE SERVICES IN RESPECT TO CONSTRUCTING CONSTRUCTION MANAGEMENT SERVICES. Where the taxpayers construction management services were necessary for the timely completion of the renovation but did not entail the direction or management of the actual construction process or actual building activities, the taxpayer was not responsible for constructing. As such, the taxpayers gross income was subject to service, rather than retailing B&O tax .
  20 WTD 32 00-028   USE TAX PUBLIC ROAD CONSTRUCTION vs. CUSTOM CONSTRUCTION DUTY TO KEEP AND PRESERVE RECORDS. Whether a contractor/taxpayer who performed work on road projects was engaged in custom construction or in public road construction depended on whether the road projects were done on state-owned land or on land owned by a city, county, or other political subdivision of the state or the federal government. The taxpayer failed to keep and preserve records to support his claim that the road projects were custom construction.
  20 WTD 514 01-028   JOINT VENTURE TAX LIABILITY OF EACH PARTY TO JOINT VENTURE. Members of a joint venture engaged in speculative construction are jointly and separately liable for payment of retail sales tax on obligations of the joint venture, and the fact that one member managed the project and ordered materials and subcontract work in that members name does not relieve the other members of liability for unpaid sales tax on the materials and subcontracts when the managing member incurred the third-party expenses in the capacity of a partner.
  21 WTD 157 01-077   [1] RULE 170; RCW 82.04.250, RCW 82.04.050, RCW 82.08.020: RETAIL SALES TAX RETAILING B&O TAX PRIME CONTRACTOR CONSTRUCTION UPON LAND OWNED BY A CORPORATE OFFICER. Where a construction company performed construction services on land owned by its corporate office, it was deemed a prime contractor.
  21 WTD 157 01-077   [2] RULE 170, RULE 223; RCW 82.04.250, RCW 82.04.050, RCW 82.08.020; ETA 276: RETAIL SALES TAX RETAILING B&O TAX MEASURE OF TAX --PRIME CONTRACTOR. Payment by a consumer of a contractors liability is includable in the contractors tax measure. When a contractor rents certain equipment, the contractor is acting as a consumer and is personally liable for retail sales tax on the equipment rental. However, a prime contractors purchase of labor and materials to construct a building for a consumer is a purchase for resale, and retail sales tax is not due on those purchases. Where retail sales tax was improperly paid on the contractors purchases, it should not be included in the measure
  21 WTD 169 01-077R   RETAIL SALES TAX RETAILING B&O TAX PRIME CONTRACTOR CONSTRUCTION UPON LAND OWNED BY A CORPORATE OFFICER. Where a construction company performs construction services on land owned by its corporate office, it is deemed a prime contractor.
  21 WTD 169 01-077R   RETAIL SALES TAX RETAILING B&O TAX MEASURE OF TAX --PRIME CONTRACTOR FORM OVER SUBSTANCE. Payment by a consumer of a contractors liability is includable in the contractors tax measure. Taxpayers are free to choose the form of their business relationship, and where their conduct is consistent with that form, there is no reason to disregard the form chosen by the taxpayers.
  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 partnerships business is the action of the partnership itself, binding the partnership, even if the general partner executes the agreement in his own name.
  22 WTD 26 01-140   RCW 82.04.051: RETAIL SALES TAX CONSTRUCTION MANAGEMENT SERVICES SERVICES RENDERED IN RESPECT TO CONSTRUCTION. To be rendered in respect to construction activities, the services themselves must directly relate to the constructing and the provider of the services must be responsible for the performance of the constructing.
  22 WTD 26 01-140   RCW 82.04.220: B&O TAX -- GROSS INCOME OF THE BUSINESS PARTNERSHIP DISTRIBUTION. Partners need not pay tax on payments received from the partnership as distribution of contributions or profits. Payments partners receive for providing services are subject to tax. Det. No. 90-74, 9 WTD 143 (1993).
  22 WTD 37 01-140R   RETAIL SALES TAX CONSTRUCTION MANAGEMENT EARNED INCOME v. PARTNERSHIP DISTRIBUTION INTERPRETATION OF A PARTNERSHIP AGREEMENT. Extrinsic evidence may be considered only to elucidate the meaning of the words of a contract, and not for the purpose of showing intention independent of the document. In re Marriage of Scweitzer, 132 Wash.2d 318, 937 P.2d 1062 (1997).
  22 WTD 56 01-196   RETAIL SALES TAX -- DEFINITION OF RETAIL SALE -- JANITORIAL SERVICES -- CONSTRUCTION CLEAN-UP. Cleaning services billed to a speculative builder for re-cleans of finished homes held for sale were janitorial services and not subject to retail sales tax.
  22 WTD 90 02-0142   B&O TAX AND RETAIL SALES TAX CONSTRUCTION AND DESIGN BUSINESS SERVICES RENDERED IN RESPECT TO CONSTRUCTION. A determination of whether services were rendered in respect to construction is made on a case by case basis and requires looking at the six factors enumerated in Det No. 88-39, 5 WTD 125 (1988).
  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 waters 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.
  22 WTD 206 02-0123   RETAIL SALES TAX LIMITED LIABILITY COMPANY (LLC) -- GENERAL CONTRACTOR LIABILITY ON LLC PAYMENTS. A general contractor who is a member of a limited liability company (LLC) and who seeks to avoid taxation on a payment it receives from the LLC must establish that the payment was a profit-sharing payment, a pass-through payment deductible in accordance with WAC 458-20-111 (Rule 111), or is otherwise exempt.
  22 WTD 238 01-184   RETAILING B&O TAX RETAIL SALES TAX CONSTRUCTION CONTRACT DESIGN FEES. A contract for services, such as design work, will be combined with a construction contract and taxed as a single activity if at the time of the first contract it was contemplated by the parties that the same person would be awarded both contracts.
  23 WTD 229 03-0350   B&O TAX -- EXCLUSION -- ON-SITE PERSONNEL HIRED BY PROPERTY MANAGEMENT COMPANIES. The RCW 82.04.394 exclusion from the B&O tax for amounts received by property management companies and used to pay on-site personnel is not ambiguous and applies only when the on-site personnel primarily perform services at a single owner's property.
  24 WTD 21 04-0081   B&O TAX -- RETAIL SALES TAX -- DEFAULT BY PRIME CONTRACTOR -- DIRECT PAYMENT BY CUSTOMER TO SUBCONTRACTOR. If a customer invokes a right to pay subcontractors directly in the event of insolvency by the prime contractor pursuant to terms in the customers contract with the prime, any payments made to the subcontractors on behalf of the prime remain wholesale sales from the subcontractors to the prime.
  24 WTD 134 02-0154R   RETAIL SALES TAX LIABILITY FOR TEMPORARY WORKERS SPECULATIVE BUILDERS. The taxpayers, speculative builders, are liable for retail sales tax with respect to amounts paid for temporary workers because the workers performed labor classified as retailing.
  24 WTD 283 04-0004   CUSTOM CONSTRUCTION -- SPECULATIVE BUILDER INDICIA OF OWNERSHIP OF LAND. The issue of ownership of property is determined by an analysis more rigorous than a simple search of record title. Looking at all the attributes of ownership contained in Rule 170(2)(9) we conclude that Taxpayer 1 performed construction activities on real property owned by Taxpayer 2 and thus acted as a custom contractor.
  24 WTD 433 05-0060   RETAIL SALES TAX -- SPECULATIVE BUILDER -- CONSTRUCTION -- TITLE. The holder of record title is one of the factors considered in conjunction with other the attributes of ownership in identifying the owner of real property in construction cases.
  24 WTD 433 05-0060   RETAIL SALES TAX -- SPECULATIVE BUILDER -- PRIME CONTRACTOR -- CONSTRUCTION -- TAX PAID AT SOURCE. Contractors may deduct the construction purchases on which retail sales tax had been paid when they report the resale of those purchases.
  24 WTD 433 05-0060   RETAIL SALES TAX -- PRIME CONTRACTOR -- CONSTRUCTION -- GROSS SALES PRICE. Lacking better evidence of a prime contractor's construction charges, the measure of sales tax is the gross sales price of the property less non construction costs (land and real estate selling costs).
  26 WTD 1 05-0104   RETAILING B&O TAX -- RETAIL SALES TAX -- JOINT VENTURER VS. PRIME CONTRACTOR. Where the preponderance of evidence showed that the parties did not intend to form a joint venture, the parties did not have equal control over the construction project, and the parties did not share project profits and losses, a joint venture was not created.
  28 WTD 89 08-0222 08/18/09 RULE 170; RCW 82.04.030, RCW 82.04.050: JOINT VENTURE – CUSTOM CONSTRUCTION.  The taxpayers created joint ventures with various landowners in five of the seven agreements at issue, because those arrangements meet the five elements of a joint venture established by common law.  The other two projects at issue are not joint ventures, because the contracts provided demonstrate a lack of intent to form a joint undertaking between the parties.  In these two projects, the taxpayers are subject to retail sales tax because they built homes on land owned by their consumers.
  28 WTD 76 08-0197 5/27/09 RCW 82.04.050(2)(b); RCW 82.08.020: RETAIL SALES TAX – RETAILING B&O TAX - PRIME CONTRACTOR.  An LLC construction business (the taxpayer) was a prime contractor and not a speculative builder when it constructed residential buildings on land owned by other separately registered and organized LLCs, which were also owned by the taxpayer’s principals.
  30 WTD 40 10-0062 11/30/2011 Rule 170: SPECULATIVE BUILDER – ATTRIBUTES OF OWNERSHIP.  A speculative builder is defined as a person who constructs buildings for sale or rental on land owned by the speculative builder. A construction company that builds on land purchased by the company’s shareholders, paid for by the shareholders with financing guaranteed personally by the shareholders is not a speculative builder, because it is building on land owned by its shareholders and not on land that it owns.  
  30 WTD 89 10-0167 12/20/2011 RULE 170; RCW 82.08.020; RCW 82.04.070: RETAIL SALES TAX – RETAILING B&O TAX – GROSS INCOME – FULL CONTRACT PRICE - NO DEDUCTIONS: As the prime contractor, the taxpayer was required to report retailing B&O tax on the gross contract prices it charged its customers and collect retail sales tax from its customers measured by their full contract prices.  There is no authority that allows the taxpayer to deduct amounts it paid the subcontractors from the gross or full contract prices it charged it customers when it reported its B&O tax and sales tax.  
  32 WTD 107 11-0280 06/27/2013 RCW 82.08.050: RETAIL SALES TAX – BUYER'S LIABILITY. When a
retail sale is made and the retail sales tax is not paid by the buyer, the Department may proceed against the buyer or seller for payment of unpaid sales tax. The buyer is the person who is legally obligated to pay the seller in any transaction. Where a taxpayer retained construction and labor services and was identified as the purchaser on sales invoices, the taxpayer was the buyer and liable for payment of retail sales tax due on the sales even though a corporate entity made payment on the invoice.
  32 WTD 107 11-0280 06/27/2013 RCW 82.08.050: RETAIL SALES TAX – CORPORATE DISREGARD –
ALTER EGO DOCTRINE. Where a corporate shell with no function beyond holding title to assets that are for the exclusive benefit of its only shareholders, has operated as the mere alter ego of the shareholders, and regarding it as separate from its shareholders would aid in the consummation of a wrong on the State, the Department may look beyond the legal fiction of distinct corporate existence, disregard the corporate entity, and hold the shareholders responsible for unpaid retail sales tax on purchases for which the corporate entity made payment.
  32 WTD 107 11-0280 06/27/2013 RCW 82.08.050: RETAIL SALES TAX – CORPORATE DISREGARD –
ALTER EGO DOCTRINE -- PROTECTIVE ASSESSMENT. Where a corporate entity is disregarded and shareholders are held liable for unpaid retail sales tax on purchases for which the corporate entity made payment, the Department may also issue a protective assessment for the unpaid taxes against the corporate entity.
  32 WTD 238 13-0076 10/04/2013 RULE 170:  SPECULATIVE BUILDER – ATTRIBUTES OF OWNERSHIP.  A speculative builder is a person who constructs buildings or structures on land it owns.  A contractor that builds homes on land owned by a subsidiary is not a speculative builder.
  32 WTD 260 12-0284 10/29/2013 RULE 170; RCW 82.04.050, RCW 82.04.051:  RETAIL SALE – SERVICES
RENDERED IN RESPECT TO CONSTRUCTION. “Services rendered in respect to” construction means those services directly related to construction that are performed by a person who is responsible for the performance of the construction. Here, the evidence established that a developer was responsible for the performance of the construction.
         
OTHER: