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WAC 171 Building, repairing or improving streets, roads, etc., which are owned by a municipal corporation
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION
       
WAC: 458-20-171   07/22/1971 Building, repairing or improving streets, roads, etc., which are owned by a municipal corporation or political subdivision of the state or by the United States and which are used primarily for foot or vehicular traffic.
         
       
RCW: 82.04.050   1993 "Sale at retail", "retail sale"
  82.04.250   1993 Tax on retailers.
  82.04.190   1986 "Consumer"
  82.04.270   1998 Tax on wholesalers, distributors.
  82.04.280   1994 Tax on printers, publishers, highway contractors, extracting or processing for hire, cold storage warehouse or storage warehouse operation, insurance general agents, radio and television broadcasting, consumer as defined in RCW 82.04.190(6)--Cold storage warehouse defined--Storage warehouse defined--Periodical or magazine defined.
  82.04.415   1965 Exemptions--Sand, gravel and rock taken from county or city pits or quarries, processing and handling costs.
  82.08.020   1992 Retail Sales Tax Imposed
  82.14.030   1989 Sales and Use Taxes Authorized - Additional Taxes Authorized - Maximum Rates
         
       
ETA:      
  3050.2013 05/24/2013 Dump Truck Operators
The Department has issued ETA 3050.2013. This Excise Tax Advisory (ETA) explains the public utility (PUT), business and occupation (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators.
  3052.r109 12/28/09 Retail sales tax: Road construction. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.
  3068.r109 12/28/09 Taxability of highway construction contract projects administered by Washington State Department of Transportation. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.
  3153.r109 12/28/09 Road construction - Contractors applying sand, gravel and rock - sales tax - use tax. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.
  3025.2009 2/2/09 Construction of private roads intended to be dedicated to the county
  3033.2009 2/2/09 Public road construction for private individuals
  3035.2009 2/2/09 Paving cuts
  3050.2009 2/2/09 Dump truck operators
  3052.2009 2/2/09 Retail sales tax: Road construction
  3053.2009 2/2/09 Form oil purchased by building contractors
  3067.2009 2/2/09 Business & occupation tax: Contract assignments
  3068.2009 2/2/09 Taxability of highway construction contract projects administered by Washington State Department of Transportation
  3071.2009 2/2/09 Public Road Construction Materials – Measure of Tax
  3134.2009 2/2/09 Transactions between related entities
  3148.2009 2/2/09 Public road construction included in a lump sum general construction contract
  3153.2009 2/2/09 Road construction -Contractors applying sand, gravel and rock - sales tax - use tax
  3154.2009 2/2/09 Public road construction -- Off-site activities
  4.8.12.171 12/28/82 ROAD CONSTRUCTION - CONTRACTORS APPLYING SAND, GRAVEL AND ROCK        SALES TAX - USE TAX Revised 2/2/09 See ETA 3153.2009
  16.12.171 7/1/66 JOB SITE PLANTS AND PUBLIC ROAD  CONSTRUCTION CONTRACTS Revised 2/2/09 See ETA 3071.2009
  49.04.171 7/8/66 PUBLIC ROAD CONSTRUCTION INCLUDED IN A LUMP SUM GENERAL CONSTRUCTION CONTRACT Revised 2/2/09 See ETA 3148.2009
  52.04.171 7/8/66 CONSTRUCTION OF HIGHWAY TUNNELS FOR PUBLICLY OWNED ROADS Cancelled Effective 03/28/08. This document explains that construction of tunnels for highways owned by the federal government is subject to the public road construction B&O tax classification, and a contractor installing linings in those tunnels is the consumer of the lining materials.  There is no need for this information as WAC 458-20-171 provides sufficient information about the tax-reporting responsibilities of persons building roads owned by the federal government.
  202.12.171 9/2/66 CONSTRUCTION OF PRIVATE ROADS INTENDED TO BE DEDICATED TO THE COUNTY Revised 2/2/09 See ETA 3025.2009
  255.04.171 9/23/66 PUBLIC ROAD CONSTRUCTION FOR PRIVATE INDIVIDUALS Revised 2/2/09 See ETA 3033.2009
  259.12.171 9/23/66 SALES TO PUBLIC ROADS CONTRACTOR FOR USE OUTSIDE THE STATE Cancelled Effective 03/28/08. This document explains that a construction company that purchases materials in Washington that will be incorporated into a publicly-owned road outside of Washington is not subject to use tax on the value of those materials.  While this is accurate, it is no longer necessary to have an ETA explaining it.

  264.12.171 9/23/66 PAVING CUTS Revised 2/2/09 See ETA 3035.2009
  330.12.171 12/28/67 ASPHALT MIXED AT PIT SITE Revised 2/2/09 See ETA 3071.2009
  366.04.171 3/21/1973 ROAD CONSTRUCTION UNDER FEDERAL TIMBER PURCHASE AGREEMENTS - This document provides incorrect tax-reporting information.  It states that a subcontractor performing logging road construction under the terms of a federal timber purchase agreement is considered a public road contractor.  This is incorrect.  Logging road construction, whether performed by the timber buyer or a subcontractor, is considered a part of the logging activity. (See also Lyle Wood Products vs. Dept. of Revenue, 91 Wn.2d 193, 588 P.2d 215.)   ETA 366 also incorrectly notes that a timber buyer is not a consumer of road materials provided by the federal government if the timber purchase agreement does not contain a separately stated allowance for road construction.  This is also incorrect.  Cancelled by ETA 2003 -2s  6/30/00.
  370.08.171 6/12/70 RETAIL SALES TAX:  OFF-SITE CONSTRUCTION Revised 2/2/09 See ETA 3154.2009
  372.04.171 6/12/70 RETAIL SALES TAX:  PUBLIC ROAD CONSTRUCTION Revised 2/2/09 See ETA 3052.2009
  373.08.171 6/12/70 Retail sales tax:  Logging performed as an incident to construction of privately owned roads -This document explains that the felling, bucking, and decking of logs while constructing a road is incidental to the road construction contracts.  This document is no longer needed. WAC 458-20-13501 explains the taxability of logging performed as an incident to construction. Cancelled by ETA 2003 -3s 07/16/01
  433.04.170.171 7/9/71 BUSINESS & OCCUPATION TAX: CONTRACT ASSIGNMENTS Revised 2/2/09 See ETA 3067.2009
  437.08.171 8/11/71 TAXABILITY OF HIGHWAY CONSTRUCTION CONTRACT PROJECTS ADMINISTERED BY WASHINGTON STATE DEPARTMENT OF HIGHWAYS Revised 2/2/09 See ETA 3068.2009
  484.04.171 7/31/74 CORPORATION AND STOCKHOLDER DISTINCT ENTITIES FOR BUSINESS AND OCCUPATION TAX               PURPOSES Revised 2/2/09 See ETA 3134.2009
  3050.2014 04/29/2014 ¬†Dump Truck Operators

This ETA explains the public utility tax (PUT), business and occupation tax (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators. This ETA previously issued on May 24, 2013, is being reissued in order to clarify how to distinguish the taxability of persons hauling for hire from persons hauling construction debris.

         
       
INDUSTRY GUIDES:     Construction Guide
         
         
SPECIAL NOTICES:      
         
       
DIRECTIVE: 8171.1   11/03/1987 Value of Rock from State or Federal Pits Cancelled 7/17/2002
  8171.2   11/04/1987 Paving Cuts
         
       
WTD: 1 WTD 353 86-292   USE TAX - ROAD CONSTRUCTION - EXTRACTED MATERIALS. The extraction and application upon the roadway of materials by a road builder is a use of those materials for use tax purposes.
  1 WTD 353 86-292   USE TAX - ROAD CONSTRUCTION - EXTRACTED MATERIALS - LOGGING ROADS - SALES TAX COLLECTED FROM CUSTOMER. Use tax will not be asserted on the use of extracted materials by persons building logging roads where those persons held a reasonable and good faith belief that they were performing a retail sale and they collected sales tax from their customers on the total charge.
  1 WTD 353 86-292   USE TAX - VALUE OF ARTICLE USED - ROAD CONSTRUCTION - MATERIALS EXTRACTED BUT NOT PROCESSED. Prior to December 28, 1982, under the terms of Excise Tax Bulletin (ETB) 4.8.12.171, use tax is not applied to materials extracted by road builders and used in building roads if the materials are not processed or manufactured. As of that date, under the terms of the ETB as revised, use tax is applicable. Under the ETB it is measured by the cost of extraction. Where cost figures are not available the tax is measured by the retail selling price, as nearly as possible, of similar products.
  5 WTD 147 88-147   B&O/RETAIL SALES TAX -- CLASSIFICATION -- PUBLIC ROAD CONSTRUCTION -- STORM SEWERS. Construction of storm sewers that serve a public road or street is taxable under the B&O category, Public Road Construction, even though portions of such construction extend outside the boundaries of the street right-of-way and even though the drain fields may also accommodate some sewage on an incidental basis.
  5 WTD 311 88-183   CANONS OF CONSTRUCTION--PUBLIC ROAD CONSTRUCTION -- CONTRACTOR -- "PILOT CAR" AND " FLAGGING". "Pilot car" and "flagging" activities do not fall within the Rule 171 definition of contractor.
  6 WTD 317 87-192A,85-125A   USE TAX--PUBLIC ROAD CONSTRUCTION -- USE TAX ON ROAD MATERIALS -- DEFAULTING SUBCONTRACTOR. A prime road construction contractor who undertakes a public road installation contract of a defaulting road subcontractor is itself the installing party who is liable for use tax upon materials installed in performance of the subcontract.
  6 WTD 465 88-389   B&O TAX -- CLASSIFICATION -- PUBLIC ROAD CONSTRUCTION -- DRAINAGE SYSTEM -- SURFACE RUNOFF. In order for the construction of a drainage system in a street or road to qualify as public road construction it must carry surface runoff from the streets and roads in which the system is constructed.
  7 WTD 299 89-197   RCW 82.04.280 -- RCW 82.04.050 -- PUBLIC ROAD CONSTRUCTION -- MASS TRANSIT FACILITY -- BUS MAINTENANCE AREA -- BUS STORAGE AREA. Bus maintenance and storage facilities are considered to be mass transit facilities and construction or modifications to such buildings are considered public road construction, because such buildings are directly related to foot and vehicular traffic.
  9 WTD 231 90-108   B&O TAX -- EXTRACTING -- LOGGING ROAD CONSTRUCTION -- CONSTRUCTION CREDITS. Where taxpayer/extractor has purchased a timber contract and builds logging roads, amounts received by the taxpayer as "road building credits" are not credits against the purchase price of the timber contract, but B&O taxable payments for building the logging roads benefiting the seller of the timber contract.
  10 WTD 25 90-232   RCW 82.04.280 & RCW 82.04.050 -- PUBLIC ROAD CONSTRUCTION -- MASS TRANSIT FACILITY -- PHASED CONSTRUCTION. Demolition contract for the site preparation for a transit mall taxed under the public road construction classification where the contract was done as part of an approved plan to build the transit facility.
  16 WTD 25 95-085   B&O TAX -- RETAIL SALES TAX -- PUBLIC ROAD CONSTRUCTION -- HOUSING DEVELOPMENTS. The construction of streets as part of a housing development will be considered public road construction if it is reasonably certain that the streets will be dedicated to a public body. Otherwise, such construction will be treated as a retail sale.
  17 WTD 278 95-052ER   PUBLIC ROAD CONSTRUCTION - MASS PUBLIC TRANSPORTATION - WHAT CONSTITUTES. The term mass public transportation refers to urban, public transportation systems"; citing, Municipality of Metropolitan Seattle v. O'Brien, 86 Wn.2d 339, 342, 544 P.2d 729 (1976).
  17 WTD 278 95-052ER   PUBLIC ROAD CONSTRUCTION - MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES - MUNICIPAL AIRPORT TERMINAL. An airport terminal owned and operated by a port district, which terminal does not serve an urban public transportation or transit function, is not included within the scope of the phrase mass public transportation terminal and parking facility. Mere ownership of an airport terminal by a municipality or a political subdivision of this state does not make the terminal a mass public transportation terminal.
  17 WTD 278 95-052ER   PUBLIC ROAD CONSTRUCTION -- MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES -- WHAT CONSTITUTES. The phrase mass public transportation terminals and parking facilities used in RCW 82.04.050(6), RCW 82.04.280, and RCW 82.04.190 grants public road construction tax treatment to those passenger terminals and parking facilities necessary for passenger and vehicular access to and from urban public transportation systems that are owned, or leased, and operated by municipalities as defined by RCW 35.95.020(2), and by RTAs formed under chapter 81.112 RCW, and those terminal and parking facilities necessary for such systems.
  17 WTD 278 95-052ER   PUBLIC ROAD CONSTRUCTION -- MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES -- PORT DISTRICT -- AIRPORT. Because a port district is not a municipality as defined by RCW 35.95.020, or an RTA, and because a port district is generally not authorized to engage in a transportation business, Taxpayer, as a port district, does not qualify for public road construction tax treatment when it builds, repairs, or improves an airport passenger terminal which does not serve an urban public transportation system.
  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.
  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 160 99-135E   RETAIL SALES TAX EXEMPTION PUBLIC ROAD CONSTRUCTION. Legally required mitigation work performed on wetlands does not qualify as public road construction when those wetlands are physically separate from the actual county road construction project and/or when the wetlands are owned by the state.
  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 447 99-147   PUBLIC ROAD CONSTRUCTION CONSUMER. Where a contractor performs road construction for a municipality, the contractor will be required to pay retail sales/use tax on the materials used. However, where the contractors activities on a project were limited to supplying labor, and the contractor neither purchased nor installed any materials, the contractor neither used nor consumed any materials on which to assess retail sales or use 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 385 00-170   B&O TAX PUBLIC ROAD CONSTRUCTION B&O TAX -- HOOK-UP FEE CREDITS. Taxpayer, as landowner, owed hook-up fees collected by the municipality as payment for the construction of a stormwater treatment plant. Taxpayer, as contractor, received hook-up fee credits as payment (income) for building the stormwater treatment plant. The income received as hook-up fee credits for building a stormwater treatment plant is subject to public road construction B&O tax.
  21 WTD 240 01-178   RCW 82.04.050, RCW 82.04.190, RCW 82.04.270: RETAIL SALES TAX RENTAL OF EQUIPMENT WITH OPERATOR -- PUBLIC ROAD CONSTRUCTION. A person hired by a county for his skill, knowledge, and expertise in bridge construction is not merely renting equipment with an operator to perform work under the specific direction of a lessee, but was acting as a subcontractor whose work was subject to contract specifications. The proper tax classification for such activities is public road construction.
  23 WTD 182 03-0269   RETAIL SALES TAX USE TAX PUBLIC ROAD CONSTRUCTION APPLICATION OF MATERIALS. A contractor that applies sand, gravel, rock, and similar materials in performance of a public road construction contract is the consumer of the materials, and is liable for retail sales tax on the purchase of the materials, or use tax if the materials were acquired under circumstances in which the retail sales tax was not paid. The fact that the public owner of the land later builds upon the surface created by the contractors application of the materials does not make the public owner the consumer of the materials.
  23 WTD 182 03-0269   USE TAX PUBLIC ROAD CONSTRUCTION USE OF MATERIALS TAKEN FROM A COUNTY STOCKPILE. A public road contractor is not exempt from use tax on its use of rock materials taken from a county stockpile. The provision in Rule 171 that partially excludes from the use tax the use of materials a county or city has taken from its own pit and stockpiled for placement on its own roadway is an exemption for cities and counties only.
  23 WTD 182 03-0269   USE TAX ROAD CONSTRUCTION JOB SITE DESIGNATED STOCKPILES. Where building materials or components are fabricated at a location off the job site, use tax is due on the use of the materials, measured by the value of the materials, including the labor of preparation. The exception that recognizes asphalt and concrete mixing plants that the contractor has temporarily located in the vicinity of the job as part of the job site, does not extend to off-site county stockpiles of materials designated by the county for use in the project.
  23 WTD 276 03-0236   RETAIL SALES TAX EXEMPTION PUBLIC ROAD CONSTRUCTION -- PARKING. Improvements to the portion of a right of way that parallels a primary arterial and is used for motor vehicle circulation, parking, and access for homes, businesses, and a pedestrian pathway qualify for the public road construction exemption.
  24 WTD 297 04-0093R   RETAIL SALES TAX USE TAX PUBLIC ROAD CONSTRUCTION TAILGATE SPREADING OF MATERIALS CONSUMER. A public road contractor that incorporates road materials into the roadway by having its materials supplier deliver the materials by tailgate spreading, is the consumer of the materials, and retail sales tax applies to the sale of the materials to the contractor. The manner of delivery, by tailgate spreading, does not, by itself, make the materials supplier the consumer of the materials. Mere hauling and tailgate spreading of materials on public road jobs is not public road construction. The public road contractor who consumes the materials in the performance of its contract to build the road is the person liable for retail sales tax or use tax on the materials.
  25 WTD 133 05-0162   RETAIL SALES TAX - PUBLIC ROAD CONSTRUCTION - BOAT RAMP. Because a boat ramp is not used primarily for foot or vehicular traffic, the ramps construction does not constitute public road construction, and charges for the ramp's construction are subject to retail sales tax
       
         
       
OTHER: