Generally, if you generate income from transporting agricultural products for others, the income is subject to either public utility tax (PUT) or B&O tax.
- Motor/urban transportation PUT: Any income from transportation that takes place on public roads.
- Service and other activities B&O tax: Any income from transportation that takes place on private roads.
PUT exemptions for certain agricultural hauling
- Hauling for related persons: Beginning July 1, 2007, persons that haul agricultural products or farm machinery or equipment for a farmer or person performing custom farming services are exempt from PUT when the person that does the hauling and the farmer or custom farmer are “related.” The term “related” means having any of the relationships described in section 267(b) (1), (2), and (4) through (13) of the Internal Revenue Code, as amended and renumbered as of January 1, 2007. See the Special Notice “Services for Farmers – B&O and Public Utility Tax Exemption” for the specific relationship list. RCW 82.04.625