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Below are rule and interpretive statement actions. For information regarding how these rules and interpretive statements may affect you, email us or call 1-800-647-7706. Also, see more information regarding the Department's rule making process, including rule making currently in progress and how to participate.


Pursuant to RCW 34.05.330, you have the right to petition the Department to adopt, amend, or repeal any administrative rule. Obtain a copy of the petition online, or call call 1-800-647-7706. The petition process is governed by the Office of Financial Management (Chapter 82-05 WAC).


NOTE:
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Rules:
WAC - Washington Administrative Code

Interpretive Statements:
ETA - Excise Tax Advisory
PTA - Property Tax Advisory
IAG - Interim Audit Guideline

October 2014

September 2014

August 2014

June 2014

May 2014

April 2014

March 2014

February 2014

January 2014


October 2014

WAC 458-20-17802 (Rule 17802) Collection of use tax by county auditors and department of licensing – Measure of tax. .  The Department of Revenue authorizes county auditors and the Department of Licensing to collect the use tax when a person applies to transfer a certificate of title of a vehicle under the authority of RCW 82.12.045.  This rule explains how county auditors, their subagents, and the Department of Licensing determine the measure of the use tax.

The Department of Licensing has an automated system that provides a vehicle’s average retail value to help determine the measure of use tax due at the time of transfer.  Previously if the vehicle’s average retail value, as provided by the system, was less than $3,000 the purchase price was presumed to represent the vehicle’s true value.  The rule has been revised to raise the threshold of $3,000 to $5,000.  Other general updating has also been completed.

(ETA 3192.2014) Professional Employer Organizations

This ETA explains when a professional employer organization (PEO) providing employer services is eligible for a business and occupation tax deduction from gross income for qualifying costs paid to or on behalf of covered employees under RCW 82.04.540 and includes examples. 

WAC 458-12-010

This rule incorrectly cited to WAC 458-12-080 and 458-12-080(2). The department corrected these citation to WAC 458-12-060 and 458-12-060(4), respectively.

WAC 458-61A-202 (REET Rule 202), WAC 458-61A-303 (REET Rule 303)

WAC 458-61A-202 (REET Rule 202) explains the exemption from Real Estate Excise Tax (REET) for inheritance transfers. WAC 458-61A-303 (REET Rule 303) explains the REET affidavit requirements. Second Engrossed Substitute House Bill 1117 (ESHB 1117), effective on June 12, 2014, provides a new REET exemption for transfers pursuant to a transfer on death deed and substantiation requirements to claim that exemption, as well as a change to the affidavit requirements for transfer on death deed transfers. REET Rules 202 and 303 are amended again to reflect this new exemption and accompanying substantiation and affidavit requirements for transfers pursuant to transfer on death deeds. This is the second emergency rule filing for these rules while the Department works on permanent rules, which can be found on the Rules Agenda.

September 2014

ETA 3188.2014 (1st Revision) Grain Elevator

Excise Tax Advisory (ETA) 3188 explains the proper rate of tax remittance when a grain elevator is expanded pursuant to RCW 82.08.820. Initially issued on February 19, 2014, ETA 3188 is being amended to delete language in the ETA providing guidance on the Department’s interpretation of what a grain elevator “structure” is for purposes of RCW 82.08.820.  The language is being eliminated because the Department has reconsidered its interpretation in the matter and determined that prior the interpretation was too narrow.

WAC 458-20-267 Annual Reports for Certain Tax Adjustments

WAC 458-20-267, titled: “Annual reports for certain tax adjustments” (Rule 267) is amended at the introduction in section (1) of the rule by changing the phrase “aerospace manufacturing” for clarity to “aerospace industry” and adding the phrase “government funded mental health services.” Rule 267 is also amended to add the government funded mental health services tax preference to the annual report requirement. Further, section (3) of the rule is amended to update the filing requirements and correct caption grammatical errors.  Last, subsection (4)(b)(ii)(B) is amended to update the department’s contact address to obtain written approval to consolidate manufacturing sites.

ETA 3182.2013 Trade Shows, Conventions, and Educational Seminars Sponsored by Nonprofit Trade and Professional Organizations

This ETA explained when a trade show, convention, or educational seminar is considered open to the general public for purposes of the business and occupation (B&O) tax deduction in RCW 82.04.4282 (Deductions - Fees, dues, charges).  The Department and stakeholders have reexamined the need for this ETA and agree that existing WAC 458-20-256 is sufficiently clear and the additional explanation contained in the ETA is not needed and has therefore cancelled ETA 3182.2013.  This action does not represent a change to the Department’s understanding or interpretation of the current statutory requirements to qualify for the deduction. 

ETA 3191.2014 Rewards Programs-Retail Sales Tax

This ETA explains the application of “sales price” to selected types of rewards program awards for retail sales tax purposes under RCW 82.08.010.  The ETA provides guidance and examples clarifying: (1) when awards must be included in the sales price of a customer’s purchase, or (2) when the awards represent a discount excluded from sales price. 

 

August 2014

WAC 458-20-168 Hospitals, nursing homes, assisted living facilities, adult family homes, and similar health care facilities.

WAC 458-20-168 (Rule 168). This rule explains the B&O, retail sales, and use tax responsibilities of persons operating hospitals, nursing homes, and similar health care facilities.
Rule 168 has been revised to include legislative changes, the repeal of the quality maintenance fee, and the expiration of the hospital safe patient handling credit. The rule has also been reformatted to make it easier to find specific information.

WAC 458-20-18801 Medical substance, devices, and supplies for humans - Drugs prescribed for human use - Medically prescribed oxygen - Prosthetic devices - Mobility enhancing equipment - Durable medical equipment

WAC 458-20-18801 (Rule 18801). This rule explains the B&O and retail sales tax reporting responsibilities of persons selling medical products such as prescription drugs, over-the-counter drugs, prosthetic devices, and durable medical equipment.
Rule 18801 has been revised to update statute information, reorganize the rule into five parts (Introduction, Medical products, Applicable taxes, Common sales and use tax exemptions, and bundled transactions). Five tables have been added to the Medical products part that provide examples of Durable medical equipment, Drugs, Mobility enhancing equipment, Over-the-counter drugs, and Prosthetic devices.

 

June 2014

WAC 458-61A-202 (REET Rule 202), WAC 458-61A-303 (REET Rule 303)

WAC 458-61A-202 (REET Rule 202) explains the exemption from Real Estate Excise Tax (REET) for inheritance transfers. WAC 458-61A-303 (REET Rule 303) explains the REET affidavit requirements. Second Engrossed Substitute House Bill 1117 (ESHB 1117), effective on June 12, 2014, provides a new REET exemption for transfers pursuant to a transfer on death deed and substantiation requirements to claim that exemption, as well as a change to the affidavit requirements for transfer on death deed transfers. REET Rules 202 and 303 are amended to reflect this new exemption and accompanying substantiation and affidavit requirements for transfers pursuant to transfer on death deeds.

PTA 12.3.2014 Classification of Land Used for Christmas Tree Production

The purpose of this advisory is to clarify the statutory guidelines for designation of Christmas tree lands under Chapter 84.33 RCW.

WAC 458-20-261 Commute trip reduction incentives

The Department amends WAC 458-20-261 (“Rule 261”) to recognize provisions of ESSB 5024, Chapter 306, Laws of 2013, Sections 718 and 719, 2013 Regular Session; and ESSB 6001, Passed Legislature, Section 707, 2014 Regular Session. The commute trip reduction incentives provided by chapter 82.70 RCW were extended to June 30, 2015. The law was also amended to reduce the fiscal year limitation on the credit for the fiscal year periods beginning July 1, 2013, through June 30, 2016 from $2.75 million to $1.5 million for these final fiscal years.

Other language changes include removing language from the rule that reference the pre-2005 tax periods.  After these changes and the removal of the language describing the pre-2005 periods from the rule, the remaining section designations in the rule consisting of letters and roman numerals were adjusted as necessary.

WAC 458-20-15503 Digital Products

The Department proposes to amend WAC 458-20-15503 to recognize the provisions of Engrossed Substitute Senate Bill (ESSB) 5882, Part VII [Chapter 13, Laws of 2013, 2nd Special Session].  This legislation established an exemption from retail sales tax and use tax for purchases of standard financial information by qualifying international investment management companies.

WAC 458-20-169 Nonprofit Organizations

Nonprofit organizations explain how the business & occupation tax, retail sales tax and use tax apply to activities often performed by nonprofit organizations. 
Rule 169 has been revised to:

  • Add information pertaining to 2013 legislation that provides a use tax exemption for items valued at less than $10,000 and purchased or received as a prize from a nonprofit organization or a library.
  • Replace resale certificate language with reseller permit language.
  • Change references pertaining to “nonprofit boarding homes” to “nonprofit assisted living facilities.”
  • Include reference to RCW 82.08.02573 that provides a retail sales tax exemption for the sales exempt under RCW 82.04.3651.
  • Add language that health or social welfare organizations qualify for a deduction for compensation received for providing mental health services, and child welfare services, when under a government-funded program.
  • Add that temporary medical housing qualifies under health or welfare services when criteria are met

WAC 458-20-10004 Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities

WAC 458-20-10004 “Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities” is a new rule to provide brief adjudicative proceedings to those impacted by agency actions of the Department of Revenue in the administration of RCW chapter 59.30.  These brief adjudicative proceedings are authorized by RCW 34.05.482 through 34.05.494. This rule explains the process by which a taxpayer may seek administrative review of agency actions of the Department of Revenue in the administration of RCW chapter 59.30 regarding the assessment of the one-time business license fee; assessment of the annual renewal application fee; assessment of the annual registration assessment fee; and assessment of the delinquency fee for manufactured and mobile home communities.

WAC 458-20-101 Tax Registration and Tax Reporting

The changes relate to the recent legislation SB 5715, Chapter 309, Section 1, Laws of 2013.  Section 1 of this legislation amended RCW 82.32.215 adding language that the Department of Revenue may, by order, revoke the certificate of registration of a taxpayer for specific reasons concerning the non-payment of taxes.

WAC 458-20-268 Annual surveys for certain tax adjustments

This amendment adds language to WAC 458-20-268 relating to ESSB 5882, chapter 13, section 1503, Laws of 2013, 2013 2nd Special Session requiring an annual survey for the tax exemption for sales and use of machinery and equipment used directly in generating electricity from a qualifying renewable energy source. 

Further, section (3) of the rule is amended to update the filing requirements.  Amended subsection (3)(a) describes the required electronic filing; subsection (3)(b) describes the required paper form used if the department waives the electronic filing requirement upon a showing of good cause; and subsection (3)(c) explains that the department’s taxpayer account administration division is now handling these annual survey filings with updated contact information.

WAC 458-29A-600 Leasehold Excise Tax - Collection and administration

The Department amended this rule to implement SSB 5444, Chapter 235, Laws of 2013, which eliminated the leasehold excise credit for certain leasehold interests for the amount, if any, that the tax exceeds the property tax applicable if the property were privately owned.

WAC 458-14-056 Petitions-Time Limits-Waiver of Filing Deadline for Good Cause

WAC 458-14-056 incorporates ESHB 1826 (2011), which requires a Board of Equalization to waive the filing deadline for valuation appeals when certain criteria are met.

WAC 458-19-045 Levy Limit-Removal of limit (lid lift)

Incorporates 2SSB 5433 (2009), which allows property tax resulting from levy lid lifts to be used to supplant existing funds in certain counties in certain years; ESB 6641 (2008), which clarifies that all single year and multiple year lid lifts are considered temporary unless the ballot proposition approved by voters make the increase permanent; ESB 5498 (2007), which extended the ability to request multiple year lid-lifts to all taxing districts; and 2ESSB 5659 (2003), which allowed counties, cities, and towns to approve lid lifts for a six-year period with one vote.

WAC 458-19-055 Levy Limit-Proration of Earmarked Funds

Incorporates ESHB 1432 (2013), which provides that the Veteran's Assistance Levy and Developmental Disability and Mental Health Levy may be increased or reduced in the same proportion as the regular county property tax levy, as approved by the county legislative authority. This authorization includes situations where the county legislative authority has decided to not levy the full amount of property tax revenue otherwise allowed under the law and bank the unused levy capacity for future use.

WAC 458-19-060 Emergency Medical Service Levy

Incorporates SSB 5381 (2012), which adjusts the voter requirements for the “uninterrupted continuation” renewal of a 6-year or 10-year EMS levy to only require a majority vote and does not contain any validation requirements; also incorporates SB 5628 (2011), relating to a limited property tax exemption for part of a city from a county’s emergency medical services levy.

WAC 458-19-070 Five Dollars and Ninety Cents Statutory Aggregate Limit Calculation

Incorporates 2ESB5638 (2011), which allows certain Metropolitan Park Districts to protect a portion of its levy rate outside of the $5.90 limitation with voter approval; also incorporates EHB 1969 (2011), which allows a Flood Control Zone District in certain counties to protect a portion of its levy rate outside of the $5.90 limitation.

WAC 458-19-075 Constitutional one percent limit calculation

Incorporates 2ESB 5638 (2011), which allows certain Metropolitan Park Districts to protect a portion of its levy rate outside of the $5.90 limitation with voter approval; also incorporates EHB 1969 (2011), which allows a Flood Control Zone District in certain counties to protect a portion of its levy rate outside of the $5.90 limitation.

WAC 458-19-085 Refunds-Procedures-Applicable Limits

Incorporates SHB 5705 (2013), which provides that taxes may be levied within a taxing district in order to reimburse a taxing district for taxes that were abated or cancelled, offset by any supplemental tax, in the next levy cycle. Any tax received to reimburse the taxing district for taxes that were abated or cancelled does not reduce the levy authority of that taxing district.

WAC 458-20-245 Taxation of competitive telephone service, telecommunications service, and ancillary service

The rule-making effort amended WAC 458-20-245, presently entitled: “Telephone business, telephone service”
and to update it to present technology with the new title of: “Taxation of competitive telephone service, telecommunications
service, and ancillary service.” This updating of the rule also incorporates the legislative changes from Chapter 8, Laws of
2013, 63rd Legislature 2013 2nd Special Session.

This rulemaking identifies what constitutes competitive telephone services, telecommunications services, and ancillary
services; how these products are taxed; and the statutes that apply for determining if the sales of these products are subject to
taxation in Washington state, including issues of sourcing and apportionment. This rule applies to tax periods commencing
on or after July 1, 2008

WAC 458-20-255 Carbonated beverage syrup tax

This rule explains the carbonated beverage syrup
tax imposed by chapter 82.64 RCW. The syrup tax is an excise tax on the syrup, sold in this state, for use in making
carbonated beverages. Syrup tax.

Rule 255 has been revised to delete language in the introduction that has caused confusion now that beverage syrups are
being sold to consumers for use in home soda machines. Examples have been added under the subsection “Taxation
prohibited under the United States Constitution” that show if syrup tax is owed when sales involve Indian country.

WAC 458-20-210 Sales of tangible personal property for farming – Sales of agricultural products by farmers

This rule explains the application of business and occupation, retail sales, and use taxes to the sales of tangible personal
property to farmers. It also explains the application of taxes to the sale of agricultural products by farmers.

Rule 210 has been revised to:
Update information to conform to existing law on the taxability of manufacturing fresh fruits and vegetables; manufacturing
dairy products; purchasing nutrient management equipment and facilities; and use of reseller permits. Information pertaining
to a B&O tax credit for alternatives to field burning that expired January 1, 2006, has been removed.

WAC 458-20-263 Exemptions from retail sales and use taxes for qualifying electric generating and thermal heat producing systems using renewable energy sources

This is the interpretive rule for RCW 82.08.962, 82.08.963, 82.12.962, and 82.12.963 that provide retail sales and use tax exemptions for machinery and equipment used directly in generating electricity or producing heat using qualified renewable energy sources. The amendment of this rule was to incorporate legislative changes, including the most recent at Chapter 13, 2013 Laws, 2nd Special Session and to generally update this rule by recognizing new technology.

WAC 458-40-660 Timber excise tax – Stumpage value tables – Stumpage value adjustments

This rule is being revised to provide the stumpage values to be used during the second half of 2014

WAC 458-57-105, 115, 125, 175 Estate Tax Rules

This estate tax rulemaking is to amend three existing rules and adopt a new rule to incorporate changes from 2013 legislation. These changes include adding new language for the:

  • Qualified family-owned business interest deduction;
  • Applicable exclusion amount;
  • Increases for the top four marginal tax rates;
  • Handling of certain “transfers” regarding Qualified Terminal Interest Property (“QTIP”);
  • Examples explaining the apportionment of estate taxes;
  • Definition of “spouse;” and
Definition of the “Washington taxable estate” to specifically include an interest in QTIP included in the gross estate under IRC §2044 prospectively and retroactively to decedents dying on or after May 17, 2005


 

 

 


 

 

May 2014

ETA 3190.2014 Hazardous Substance Tax, Biodiesel (B100), and B99.9/B99 Biodiesel Blend

B99.9/B99 biodiesel blend that meets the ASTM D6751 specifications is not considered a hazardous substance for HST purposes and is not subject to the HST.

ETA 3043.2014 Low-density Light and Power Utility Deduction

The Department of Revenue has revised Excise Tax Advisory 3043. This ETA explains the public utility tax deduction provided by RCW 82.16.053 to qualifying power and light businesses. 

RCW 82.16.053 requires that the Department determine the state average electric power rate each year and inform taxpayers of this rate.  This rate is used by the power and light businesses to compute the amount of the deduction.  The revised ETA 3043 updates the information to provide the rate to be used for the period of July 2014 through June 2015.

 

April 2014

WAC 458-61A-208 Foreclosure-Deeds in lieu of foreclosure-Sales pursuant to court order

The Department amended WAC 458-61A-208 to (1) make the documentation requirements discretionary for the counties and (2) edit certain rule language consistent with the statute.

WAC 458-20-178 Use Tax

WAC 458-20-178 (Rule 178) Use tax.  This rule explains who is responsible for remitting use tax, and when and how to remit the tax. It also explains the imposition of use tax as it applies to the use of tangible personal property within Washington when the property was not subject to retail sales tax at the time of acquisition.

Rule 178 has been revised to: update and clarify information to conform to existing law; add examples; remove the incomplete and outdated listing of exemptions; reformat the presentation of information in a more useful manner; and provide references to other rules that may be helpful to readers.

ETA 3050.2014 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.

ETA 3019.2014 How are Port Charges for Dockage, Berthage, and Moorage of Ocean Vessels Taxed

This ETA explains the application of the Stevedoring Business and Occupation Tax to dockage, berthage, or moorage of ocean going vessels that is a part of a port’s functions, and alternatively, the application of the Public Utility Tax to ocean vessels docked for other purposes. This ETA was previously issued on February 2, 2009, has been reissued to address stevedoring; to include “dockage;” and to direct businesses to WAC 458-20-118 for reporting instructions for recreational moorage.

March 2014

PTA 1.1.2014 Taxation of Permanent Improvements on Tribal Trust Land

This PTA explains the property tax treatment of permanent improvements built on land owned by the United States and held in trust for an Indian tribe or tribal member.

WAC 458-02-100 to 300 (New) For Repeal: 458-20-10101 & Chapter 308-300 Consolidated Licensing Service Business Licensing Service Rules

Chapter 298, Laws of 2011 and Chapter 144, Laws of 2013 transferred the administration of the master license service (MLS) program from the department of licensing to the department of revenue, effective July 1, 2011 and renamed the master license service program to business license service (BLS) program. See Chapters 19.02, 19.80 RCW.  The department of revenue adds the new rule chapter WAC 458-02 to replace the former BLS rules under Chapter 308-300 WAC and WAC 458-20-10101.

WAC 458-20-10004 Brief adjudicative proceedings for matters related to assessments and warrants for unpaid fees issued under chapter 59.30 RCW for manufactured and mobile home communities

This new section will provide brief adjudicative proceedings to those impacted by agency actions of the Department of Revenue in the administration of RCW chapter 59.30 regarding the assessment of the one-time business license fee; assessment of the annual renewal application fee; assessment of the annual registration assessment fee; and assessment of the delinquency fee for manufactured and mobile home communities.

ETA 3189.2014 Taxation of Alarm Monitoring

This ETA explains the taxation of a single alarm monitoring service. The ETA discusses alarm monitoring services that qualify as digital automated services (DAS) under RCW 82.04.192, including instances where services are not considered DAS. The ETA further explains the application of the primarily human effort exclusion from DAS in this context, providing related examples.

February 2014

WAC 458-61A-105, 202, 205, 206, 207, 210, 213, 215, 301, 303, 304 Multiple REET Rules

The Department amended WAC 458-61A-105, -202, -205, -206, -207, -210, -213, -215, -301, -303 and -304 to (1) amend REET affidavit documentation requirements for certain rules, (2) correct usage of certain terms in the rules, (3) make rule language consistent with the statutory language upon which the rules are based, and (4) edit typographical and grammatical errors in the rules.

ETA 3183.2014 International Investment Management Services

This ETA explains the qualification and application of the lower tax rate imposed under RCW 82.04.290(1) for international investment management services as defined in RCW 82.04.293. This ETA provides guidance on how to determine whether a person is primarily engaged in the business of providing investment management services and whether a person's clients qualify them as engaged in international investment management services.

ETA 3188.2014 RCW 82.08.820 provides an exemption in the form of a refund (or remittance) of sales tax for wholesalers and third-party warehousers who own or operate grain elevators.

This Excise Tax Advisory (ETA) explains what a grain elevator is under RCW 82.08.820(1) and the application of the proper rate of tax remittance under RCW 82.08.820(3) when a grain elevator is expanded.

January 2014

ETA 3185.2014 Sourcing and Attribution of Income on Leases and Rentals of Tangible Personal Property

This ETA explains the business and occupation (B&O) and retail sales tax responsibilities of a seller (lessor) leasing tangible personal property to a consumer (lessee).  The ETA clarifies that the lease of tangible personal property to a consumer is a retail sale subject to retailing B&O tax and retail sales tax unless a specific exemption applies; the measure upon which theses taxes are due; and how these taxes are sourced and attributed under Washington law. The ETA addresses both leasing arrangements that require recurring periodic payments and those that do not as they relate to:

  • Tangible personal property (other than transportation equipment or motor vehicles, trailers, semitrailers, and aircraft that do not qualify as transportation equipment);
  • Transportation equipment; and
  • Motor vehicles, trailers, semitrailers, and aircraft that do not qualify as transportation equipment.


ETA 3186.2014 Use Tax Liability for Lessees on Leased Tangible Personal Property

This ETA explains a lessee’s use tax payment responsibility when a lessee brings leased tangible personal property into Washington from outside the state.  The ETA clarifies that lessees are responsible for paying Washington’s use tax on the value of the article used unless a specific exemption or credit applies.

WAC 458-20-273 Renewable energy system cost recovery

WAC 458-20-273 Renewable energy system cost recovery explains the renewable energy incentive program created by the enabling statutes found at RCW 82.16.110 through 82.16.130. Senate Bill 5526 (Chapter 179, Laws of 2011) amended RCW 82.16.110 through RCW 82.16.120 adding solar stirling converters manufactured in Washington to the list of qualified renewable energy devices or components. This rule-making effort was to recognize these statutory changes and to address and clarify other issues that have been identified during the Department's administration of this program.