| WAC 198 |
Installment
sales, method of reporting. |
| SOURCE |
DOCUMENT |
DETER. NO |
DATE OF ISSUE |
DESCRIPTION |
| WAC: |
458-20-198 |
|
02/27/2005 |
Installment sales, method
of reporting. |
| RCW: | 82.04.040 |
|
2004 |
"Sale," "casual
or isolated sale," "lease or rental." |
| |
82.04.090 |
|
1975 |
"Value proceeding or
accruing." |
| |
82.04.250 |
|
1993 |
Tax on retailers. |
| |
82.04.270 |
|
2004 |
Tax on wholesalers. |
| |
82.08.020 |
|
2006 |
Tax imposed -- Retail sales --
Retail car rental. |
| |
82.08.090 |
|
1975 |
Installment sales and leases. |
| |
82.08.100 |
|
2004 |
Cash receipts taxpayers -- Bad
debts. |
| |
82.12.060 |
|
2003 |
Installment sales or leases. |
| |
82.12.070 |
|
2004 |
Cash receipts taxpayers -- Bad
debts. |
| |
82.14.030 |
|
2008 |
Sales and use taxes
authorized-Additional taxes authorized-maximum rates. |
| |
82.32.050 |
|
2008 |
Deficient tax or penalty
payments--Notice--Interest--Limitations. |
| ETA: | |
|
|
| |
574.08.198 |
|
3/15/96 |
FINANCIAL INSTITUTIONS INCURRING BAD DEBTS ON CONTRACT ASSIGNMENTS This Excise Tax Bulletin explains the Department's position regarding contract assignments and retail sales tax bad debt credits as a result of the decision of the Washington State Supreme Court in Puget Sound National Bank v. Department of Revenue, 123 Wn.2d 284, 868 P.2d 127 (1994). Cancelled effective March 1, 2005. The information was incorporated consistent with recent amendments in the revision of WAC 196 (which was effective 2/27/05). |
| INDUSTRY GUIDES: |
|
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| SPECIAL
NOTICES: |
|
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| Subject
Title Reference: |
|
|
|
| Manufactured
Housing | |
10/16/1998 |
Sales Tax Collection Requirement
on Sales of Manufactured Housing |
| DIRECTIVE: |
None |
|
|
|
| RPM: |
None |
|
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| WTD: |
4 WTD 289 |
87-352 |
|
RETAIL
SALES TAX -- SELLING PRICE -- INSTALLMENT SALE AND LEASE DISTINGUISHED. Used
car dealer found to be making sales and financing the sales where the
documents used included a bill of sale and promissory note and the purchaser
owned the cars after all payments were made.The fact that the dealer wrote "lessor" by its name and
"lessee" by the purchaser's name on the documents and that the
dealer intended the transaction to be a lease did not make the transaction a
lease. |
| |
4 WTD 289 |
87-352 |
|
B&O
TAX -- RETAIL SALES TAX -- INSTALLMENT SALE --LEASE -- IMPROPER FORMS. Where
taxpayer intended to lease vehicles but used forms which indicated it was
making sales and financing the sales, it cannot re-document the transactions
on lease agreements and have the transactions treated as leases for purpose
of retailing and retail sales tax. |
| |
4 WTD 289 |
87-352 |
|
RETAIL
SALES TAX -- INSTALLMENT SALES -- CREDIT FOR TAXES PAID ON INSTALLMENTS.
Persons making installment sales of tangible personal property must report
the total selling price of such sales in the tax period in which the sale is
made. Where taxpayer did not properly report installment sales at time of
sales, but alleged it subsequently collected and remitted tax on all of the
installment payments, it can receive a credit for the taxes paid if its
records support its claim. |
| |
7 WTD 75 |
88-458 |
|
RETAIL
SALES TAX -- LEASES -- CONDITIONAL SALES DISTINGUISHED.A contract designated as lease will be
regarded as a sale and controlled by WAC 458-20-198 where the lessee has the
option at the end of the term to purchase the property for a nominal amount.
Courtright Cattle Co. v. Dolson Co. followed. |
| |
7 WTD 75 |
88-458 |
|
RETAIL
SALES TAX -- SERVICE B&O TAX -- LEASES REGARDED AS FINANCING ARRANGEMENTS
-- ALLOCATION OF INTEREST AND PRINCIPAL --REQUIREMENTS FOR. When a contract
designated as a lease is regarded as a financing price in the tax period in
which the sale is made. The payments may be apportioned between interest and
principal if the seller complies with Rule 109 and the principal amount
represents the fair market value of the property purchased. |
| |
8 WTD 52-1 |
89-329 |
|
B&O
TAX -- DEDUCTION -- REPOSSESSIONS. A manufacturer who resells its goods after
they have been repossessed from its dealer by a lender may not deduct the
difference between the list price of the goods and the resale price from the
measure of its B&O tax. |
| |
9 WTD 175 |
90-87 |
|
SALES
TAX -- INSTALLMENT CONTRACT -- ASSIGNMENT --DEFAULT -- REFUND. The assignment
of an installment contract from an auto dealer to a bank does not include a
right of the bank to obtain a refund of sales tax from the Department in the
event the auto buyer defaults and the car is repossessed. |
| |
9 WTD 175 |
90-87 |
|
This
determination has been overruled in part by Det. No. 91-263, 11 WTD 263 |
| |
11 WTD 515 |
91-321 |
|
SALES TAX -- USE TAX --
INSTALLMENT PURCHASES --WHEN TAX DUE. The Department may proceed directly
against a buyer for the full sale/use tax on an installment purchase at any
time. This is true even though the seller may opt to allow the purchaser to
pay sales/use tax on the installments as they fall due. Any tax paid in
installments may be credited toward the full amount of tax owed. |
| |
19 WTD 37 |
99-021 |
|
USE
TAX – FINANCING LEASE.In light of the
factors in Rule 211(2)(g), the taxpayer, as “lessee”, had a “financing lease”
rather than a “true lease” of tangible personal property.Thus, sales tax is due on the total selling
price at the time a sale of tangible personal property is made on an
installment basis.If sales taxes are
not collected and remitted, the Department may pursue the buyer/lessee for
use tax on the total selling price. |
| |
19 WTD 212 |
98-224 |
|
USE TAX -- LIMITATION FOR
ASSESSMENTS -- TIME AND PLACE OF SALE -- DELIVERY -- TITLE TRANSFER.Use tax was not due on the plate-making
machine originally sold and delivered in 1988 even though title did not
actually transfer until 1991. |
| |
19 WTD 1023 |
00-072 |
|
RETAIL SALES TAX -- FINANCING
LEASE.Financing leases are treated as
installment sales.The Department
considers all the factors set out in WAC 458-20-211(2)(g), and other critical
portions of the lease documents, to determine whether an arrangement is a
financing lease rather than a true lease. |
| |
19 WTD 1023 |
00-072 |
|
RETAIL SALES TAX --
SALE/LEASEBACK -- INTERVENING USE.The
Department may determine there was no “intervening use” for purposes of RCW
82.04.050, and therefore no retail sales tax was due on the initial purchase
of equipment that was subsequently sold and leased back under a financing
lease, when the documentary evidence and the parties’ course of dealing
establish that the taxpayer and the buyer/lessor agreed to the terms of a
sale and leaseback before the taxpayer purchased the equipment, and the
purchases were handled in accordance with that agreement. |
| |
22 WTD 228 |
01-168E |
|
B&O
TAX – APPORTIONMENT – BORROWING OF FUNDS -- DEFERRED INSTALLMENT SALES BY
RETAILER.When a retailer did not lend
money, but sold its products on a deferred installment basis to its credit
card customers, the retailer’s costs of borrowed funds used to replace
inventory constituted an expense of its retailing activity, and cannot be
used in calculating cost apportion of its credit card finance charge
income. |
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