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WAC 174 Sales of motor vehicles, trailers, and parts to motor carriers operating in interstate or foreign commerce.          
SOURCE DOCUMENT DETER. NO DATE OF ISSUE DESCRIPTION  
         
WAC: 458-20-174   05/13/1997 Sales of motor vehicles, trailers, and parts to motor carriers operating in interstate or foreign commerce.  Effective 6/13/97.  
    07/21/2008 Sales of motor vehicles, trailers, and parts to motor carriers operating in interstate or foreign commerce explains the retail sales tax exemptions provided in RCW 82.08.0262 & 82.08.0263 for sales to for-hire motor carriers operating in interstate or foreign commerce.  This rule has been revised to recognize that effective July 1, 2008, a blanket exemption certificate continues as long as the seller has a recurring business relationship with the buyer, which is defined by law as making at least one purchase from the vendor within a period of 12 consecutive months.  The Department has also added a reference to the Department’s Internet site for locating standard Revenue forms.  
           
         
RCW 82.04.050   1998 "Sale at retail," "retail sale."  
  82.04.250   1993 Tax on Retailers  
  82.12.020   1983 Use Tax imposed  
  82.08.020   1992 Retail Sales Tax Imposed  
  82.08.0262   1998 Exemptions--Sales of airplanes, locomotives, railroad cars, or watercraft for use in interstate/s or foreign commerce.  
  82.08.0263   1998 Exemptions-- Sales of motor vehicles and trailers for use in transporting persons or property in interstate or foreign commerce.  
  82.12.0254   1998 Exemptions--Use of airplanes, locomotives, railroad cars, or watercraft used in interstate/s or foreign commerce.  
  82.14.030   1989 Sales and Use Taxes Authorized - Additional Taxes Authorized - Maximum Rates  
           
         
ETA:        
           
         
INDUSTRY GUIDES:        
           
           
SPECIAL NOTICES:        
Subject Title Reference:        
      09/29/1995 ICC Sales and Use Tax Exemption Requirements Eased  
      11/08/1999 "New Buyers" Retail Sales Tax Exemption Certificate  
           
         
DIRECTIVE: 8174.1   04/07/1992 Use Tax - Trucks and Trailers Used in Interstate Commerce Repealed 6/30/2000 - This document is no longer needed.  WAC 458-20-17401 (Use tax liability for motor vehicles, trailers, and parts used by motor carriers operating in interstate or foreign commerce) currently explains that in the absence of a readily available fair market value, the Department will accept a value based on depreciation schedules used by the Department of Licensing.  In addition, the depreciation schedules provided in AD 8174.1 are out of date.  
           
         
RPM: None        
           
         
WTD: 3 WTD 73 87-138   EXEMPTION -- USE TAX -- MOTOR VEHICLES  -- USED IN SUBSTANTIAL PART.  To be entitled to the use tax exemption for motor vehicles transporting property for hire across the state's boundaries, a taxpayer must show that the vehicles cross the state's borders at least 25 percent of the time.  UPS v. Department of Revenue, 102 Wn.2d 355 (1984).    
  4 WTD 97 87-299   USE TAX -- EXEMPTION -- INTERSTATE COMMERCE -- MOTOR VEHICLES -- USED IN SUBSTANTIAL PART.  To be entitled to the use tax exemption for motor vehicles transporting property for hire across the state's boundaries, a taxpayer must show that the vehicles cross the state's borders at least 25 percent of the time.  UPS v. Department of Revenue, 102 Wn.2d 355 (1984)   
  7 WTD 263 89-160   RCW 82.08.0263 -- RCW 82.12.0254 -- SALES TAX -- USE TAX -- EXEMPTION -- MOTOR VEHICLES -- INTERSTATE COMMERCE -- FOR HIRE CARRIER -- TITLE TO GOODS CARRIED--CONTRACT FOR CARRIAGE.  A seller/carrier transporting its own goods is not a "for hire" carrier. A seller/carrier transporting goods titled in the name of the purchaser with whom the seller/carrier has contracted for carriage is a "for hire" carrier.  Where taxpayer, holder of an ICC permit, transports boats it has manufactured across this state's boundaries and title to the boats passes to the purchaser when the boats leave the taxpayer's factory, the taxpayer is held not to be a "for hire" carrier where there is no contract of carriage between taxpayer/seller/carrier and the purchaser.  Use of motor vehicle by a "for hire" carrier is a requisite for sales/use tax exemption on purchase/use of the motor vehicle.  Weyerhaeuser Co. v. Dept. of Revenue, 106 Wn.2d 557 (1986).   
  7 WTD 263 89-160   RCW 82.12.025 -- USE TAX -- EXEMPTION -- MOTOR VEHICLES -- INTERSTATE COMMERCE -- USED IN SUBSTANTIAL PART. To be entitled to the use tax exemption for motor vehicles transporting property for hire across the state's boundaries, a taxpayer must show that the vehicles cross the state's borders at least 25 percent of its total trips in each year.  UPS v. Dept. of Revenue, 102 Wn.2d 355 (1984 ).   
  8 WTD 213 89-455   USE TAX -- VEHICLES USED SUBSTANTIALLY IN INTERSTATE COMMERCE -- 25% TEST REVENUE VS MILEAGE.  For determining whether a vehicle has been used "in substantial part in the normal and ordinary course of the user's business for transporting therein persons or property for hire across the boundaries of the state" the Department requires that the vehicle be used in actually transporting property or persons for hire across state boundaries at least 25% of the time.  Interstate usage by this business is best measured by the total percentage of miles traveled by each vehicle on such interstate line-crossing trips and not by the revenue generated by each vehicle's interstate line-crossing trips.      
  8 WTD 389 89-518   RETAIL SALES TAX -- USE TAX -- EXEMPTIONS -- INTERSTATE MOTOR CARRIERS -- COMPONENT PARTS -- FORKLIFT VEHICLES -- TRANSPORTING GOODS ACROSS STATE BOUNDARIES.  Where taxpayer's forklift vehicles do not transport goods across this state's boundaries, there is no use/deferred sales tax exemption on charges for component parts and retail taxable services with respect to the forklift vehicles.  ETB 197.  UPS v. Dept. of Revenue, 102 Wn.2d 355 ( 1984).   
  12 WTD 143 92-111   USE TAX  -- MOTOR CARRIERS -- PALLETS, TARPAULINS, BUNGE CORDS.  Pallets, tarps, and tie downs used by a Washington-based interstate carrier not designed for a specific vehicle are subject to use tax.   
  13 WTD 14 90-92   USE TAX -- VEHICLES USED SUBSTANTIALLY IN INTERSTATE COMMERCE -- 25% TEST APPLIED ON A VEHICLE BY VEHICLE BASIS.  For determining whether a vehicle has been used "in substantial part in the normal and ordinary course of the user's business for transporting therein persons or property for hire across the boundaries of the state" the Department requires that the vehicle be used in actually transporting property or persons for hire across state boundaries at least 25% of the time.  This test is to be applied on a vehicle by vehicle basis.  Accord:  UPS v. Department of Rev., 102 Wn.2d 355, (1984).   
  13 WTD 369 93-240   RETAIL SALES TAX -- EXEMPTION -- MOTOR VEHICLES -- TRAILERS -- USE IN INTERSTATE COMMERCE.  For the RCW 82. 08.0263 sales tax exemption to apply, 1) the purchaser must be the holder of a carrier permit issued by the Interstate Commerce Commission, 2) the vehicle or trailer must be purchased to transport persons or property for hire in interstate or foreign commerce, and 3) the vehicle or trailer must first move upon the highways of this state from the point of delivery in this state to a point outside of this state under the authority of a one-transit permit.    
  13 WTD 369 93-240   RETAIL SALES TAX -- EXEMPTION -- PROPERTY WHICH BECOMES A COMPONENT OF A MOTOR VEHICLE OR TRAILER.  For the RCW 82.08.0262 sales tax exemption to apply to the purchase of tangible personal property, 1) the property must become a component part of a motor vehicle or trailer, and 2) the motor vehicle or trailer will be used by the holder of a carrier permit issued by the Interstate Commerce Commission authorizing transportation by motor vehicle across the boundaries of this state.  "Components" must become an integral part of the vehicle or trailer.   
  13 WTD 369 93-240   RETAIL SALES TAX -- TRANSFER -- ADJUSTMENT OF BENEFICIAL INTEREST -- TRUCKS AND TRAILERS.  A change in the "mere  form  of ownership" of property under  Rule  106  is deemed not a "retail sale" as defined under RCW 82.04.050.  When trucks and vehicles are transferred in exchange for stock under Rule 106, a "sale" has not taken place.  The RCW 82.08.0262 requirements are therefore not required to further exempt the transfer from retail sales tax.   
  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 519 99-330   RETAIL SALES TAX—USE TAX—EXEMPTION FOR INTERSTATE CARRIERS—COMPONENT PARTS.  Retail sales tax and use tax exemptions are provided for component parts purchased by interstate motor carriers.  Included are such items as tires, engine repair parts, and items permanently attached to vehicles or held by brackets.  Tire chains are also exempt when they are stored in boxes permanently attached to the vehicles.  
  19 WTD 519 99-330   RETAIL SALES TAX—USE TAX—EXEMPTION FOR INTERSTATE CARRIERS—MOTOR VEHICLES AND TRAILERS—VALUATION WHEN USE NO LONGER INTERSTATE.  Purchases of motor vehicles by interstate motor carriers may be exempt from retail sales tax at the time of purchase, yet use tax may come due on subsequent use when a vehicle is no longer used in substantial part in transporting persons or property for hire across state boundaries.  When use tax becomes due, it is based on the fair market value of the vehicle at the time of first non-exempt use.  Mere speculation that a significant decline in value may have occurred upon first use of the vehicle is not sufficient evidence of a decline in fair market value.  
  22 WTD 262 02-0163   B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON.  When a truck or trailer is leased to motor carriers, the lessor may claim an interstate sales deduction against retailing B&O tax for the amount of the lease income attributable to the actual out-of-state use of the vehicles and trailers.  This deduction may be taken even if the vehicle is not used substantially in interstate hauls for hire.  The B&O tax is measured by the lessor's receipts for the use of the vehicle while it is in Washington, even if the usage is in connection with interstate hauls and the vehicle is used substantially in hauling for hire in interstate commerce.  
  22 WTD 262 02-0163   B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON.  When a truck or trailer is leased to a person other than a motor carrier, the result is the same as for motor carriers.  The taxable incident takes place in this state when the property is "used" in this state by the lessee.  
  22 WTD 262 02-0163   B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON.  Retailing B&O tax liability may be reduced by an interstate sales deduction if adequate records are maintained to substantiate the amount of use claimed outside this state.  
  22 WTD 262 02-0163   B&O TAX -- LESSOR -- VEHICLES/TRAILERS -- USE OUTSIDE WASHINGTON -- VEHICLE REGISTRATION FEE.  Because a passed-on charge representing the vehicle registration fee is considered as part of the lessee's lease payment, it is subject to an interstate commerce deduction for vehicle usage outside Washington just as normal lease payments are.    
  22 WTD 262 02-0163   RETAIL SALES -- USE TAX -- INTERSTATE FOR HIRE CARRIERS -- COMPONENT PARTS.  The retail sales and use tax exemption for the purchase of component parts of motor vehicles and trailers applies to the holders of interstate carrier permits as long as the motor vehicle or trailer to which the parts are attached will be used in hauling for hire, and even if it will not be used substantially in interstate hauls.  
  22 WTD 262 02-0163   B&O TAX -- VEHICLE/TRAILER LEASE -- LEASE PAYMENTS GENERATED OUTSIDE WASHINGTON.  Lease payments generating income for a Washington district of a vehicle/trailer lessor are not taxable in Washington to the extent the use of the vehicles or trailers are used outside of Washington.   
         
           
         
OTHER: