Motor transportation and urban transportation

A business that performs hauling for hire within the state of Washington is subject to the Public Utility Tax (PUT) under either the Motor Transportation or the Urban Transportation classifications. Motor and urban transportation include the operation of motor-driven vehicles, upon public roads, used in transporting persons or property belonging to others, on a for hire basis. The PUT on transportation is generally computed only on those trips that originate and terminate within this state.

Definition of hauling for hire

The term “hauling for hire” means the business of operating any motor propelled vehicle by which persons or property of others are conveyed for hire. The term includes, but is not limited to, the operation of any motor propelled vehicle as an auto transportation company, common carrier or contract carrier.

It includes the business of hauling for hire any extracted or manufactured material, over the highways of the state and over private roads. The term “hauling for hire” does not include:

  • The transportation of logs or other forest products exclusively upon private roads;
  • The hauling of any earth or other substance excavated or extracted from or taken to the right of way of a publicly owned street, place, road or highway, by a person taxable under the classification of public road construction of the business and occupation tax (under the same contract).

The terms “motor transportation” and “urban transportation” include the business of renting or leasing trucks, trailers, busses, automobiles and similar motor vehicles to others for use in the conveyance of persons or property when as an incident of the rental contract such motor vehicles are operated by the lessor or by an employee of the lessor. These terms include the business of operating the following:

  • Taxicabs
  • Armored cars
  • Contract mail delivery vehicles

Motor transportation and urban transportation do not include the businesses of operating auto wreckers or towing vehicles, school busses, ambulances, or the collection and disposal of refuse and garbage.

Definition of carrier for hire

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. A seller/carrier transporting its own goods is not a “for hire” carrier.

The motor and urban transportation classifications of the public utility tax have different tax rates. The rates are:

Motor Transportation 1.926% (.01926)
Urban Transportation 0.642% (.00642)

The urban transportation classification applies when the origin and destination of a haul are within:

  • The corporate limits of the same city;
  • 5 miles of the corporate limits of the same city; or
  • 5 miles of the corporate limits of any two cities whose corporate limits are no more than five miles apart.

(Mileage between cities, pickup points and delivery points are determined not in road miles, but rather as a straight line distance or as the crow flies.)