Logging road construction is the activity of building roads directly related to a timber harvesting operation. Such activities include maintaining logging roads as well as the original road construction. The gross contract price is taxable under the extracting/extracting for hire B&O tax classification. Also, the contractor owes extracting/extracting for hire B&O tax and use tax on the value of materials extracted for the job. Private road construction in any other context is a sale at retail.
Logging road contractors are the consumers of any materials they incorporate into the roads. The contractor must pay retail sales or use tax on the value of the materials. If the contractor has not purchased the materials, he/she must pay use tax based on the value of the materials. For example, rock includes rip rap, pit run, crushed rock, and other rock products used in logging road construction. The value is based on the fair market value of the materials as provided in WAC 458-20-112. In the absence of sales of similar products as a guide to value, the value is determined by the total costs attributable to the extracted and processed rock, including raw material, extraction and processing costs, overhead, and any transportation costs between the extraction site and the processing site.