Interstate and/or foreign commerce carriers

Interstate and/or foreign commerce carriers

Exemption requirements

Sales of motor vehicles and trailers used for transporting persons or property for hire in interstate or foreign commerce are exempt from retail sales tax if one of the following requirements is met:

  1. The customer is the holder of a motor carrier (MC) permit issued by the Interstate Commerce Commission (ICC) or its successor agency.
  2. The customer operates under contract with the holder of a motor carrier (MC) permit issued by the ICC or its successor agency.


Exemption certificate

The seller, at the time of sale, must obtain a fully completed exemption certificate. An alternative to the exemption certificate found in WAC 458-20-174 is the Buyers' Retail Sales Tax Exemption Certificate (pdf). Either certificate may be used.


Reporting

Sales to MC carriers are reported under the Retailing of Interstate Transportation Equipment classification of the B&O tax. This would include all of the following:

  1. Sales of motor vehicles, trailers, and component parts.
  2. Leases of motor vehicles and trailers without operators.
  3. Charges for labor and service rendered in respect to cleaning, repairing, altering, or improving vehicles and trailers or component parts thereof.


A deduction may be taken for sales to out-of-state buyers when delivery is made out-of-state. This deduction should be shown on the deduction detail sheet under the Interstate and Foreign Sales category.


Repair

Charges made for repairs of MC carrier vehicles or the installation of parts are specifically exempt from the retail sales tax also. This includes charges for constructing, repairing, cleaning, altering, or improving the vehicles. The vehicles must be used for hauling for hire under the MC permit to be eligible for this exemption.

The "Buyers' Retail Sales Tax Exemption Certificate" or certificate as described in WAC 458-20-174 must be fully completed and must be retained by the seller.


Component parts

The "Buyers' Retail Sales Tax Exemption Certificate" or certificate as described in WAC 458-20-174 must be fully completed and must be retained by the seller.

See Parts for additional information.


References

Washington Administrative Code (WAC) 458-20-174
Revised Code of Washington (RCW) 82.04.250
Revised Code of Washington (RCW) 82.08.0262
Revised Code of Washington (RCW) 82.08.0263
Buyers' Retail Sales Tax Exemption Certificate (pdf)