WAC 169

FRATERNAL BENEFIT SOCIETIES - RCW 48.36A.240 Cancelled 07/17/02.

Nonprofit Organizations Guide

Hospital Guide

Child Care Tax Guide

CHAMPUS - Employee Benefit Plan - Superior Court, Thurston County - Letter Opinion - Empire Health Services, et al v. State of Washington, Depart. of Revenue, et al Thurston County Cause No. 99-2-00312-5.

Gross proceeds of sales

Gross income of the business

Business and occupation tax imposed

Exemptions -- Adult family homes.

Exemptions — Day care provided by churches

Exemptions -- Child care resource and referral services by nonprofit organizations

Exemptions -- Camp or conference center -- Items sold or furnished by nonprofit organization.

Exemptions -- Amounts received by nonprofit organizations for fund-raising activities

Exemptions — Nonprofit organizations that are guarantee agencies, issue debt, or provide guarantees for student loans.

Exemptions -- Nonprofit organizations -- Credit and debt services

Exemptions - Certain fraternal and beneficiary organizations.

Exemptions -- Operation of sheltered workshops

Deductions--Fees, dues, charges.

Deductions -- Compensation from public entities for health or social welfare services -- Exception.

Exemptions -- Sales by a nonprofit organization for fund-raising activities.

Exemptions -- Sales used by health or social welfare organizations for alternative housing for youth in crisis.

Exemptions - Temporary medical housing

Exemptions -- Use of items by health or social welfare organizations for alternative housing for youth in crisis.

Nonprofit organizations. Effective 5/17/01.

These rules all refer to resale certificates. Proposed action is to add standard language to recognize reseller permits for sales made on or after January 1, 2010.

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.

Agricultural fair association exemption

BUSINESS AND OCCUPATION TAX - SALES TAX: NONPROFIT ORGANIZATION'S RETAILING MAGAZINES - This document fails to recognize subsequent legislation (Chapter 336, Laws of 1998) that provides B&O and retail sales tax exemptions for certain fund-raising sales. It also provides an incorrect definition of "newspaper", which is defined in RCW 82.04.214. Cancelled by ETA 2003-3s 02/15/2001

Taxability of Investment Income - Information is out of date. They fail to recognize that chapter 150, laws of 2002 (HB 2641), made substantial changes to the B&O tax deduction provided for certain investment income by RCW 82.04.4281. Cancelled 6/30/02.

GRANTS RECEIVED BY NONPROFIT OR GOVERNMENTAL ENTITIES - This document explains the Department’s position regarding the taxation of grants received by nonprofit or governmental entities from governmental or private sources. It explains that the B&O tax deduction available for bona fide contributions and donations is not lost if the person making the gift requires some accountability for how the gift is used as a condition of receiving the gift. While this information is correct, it is no longer needed.

B&O Tax Reporting Requirement Continues After Business Activity Stops (Trailing Nexus)

Tax Attorneys and CPAs New "Economic Nexus" in Washington State May Impact Your Clients

Nonprofit Fundraising

Fireworks Sales, Distributors and Retail Sales by Nonprofit Organizations Tax Registration and Reporting Requirements Information Notice

B&O Tax Deduction Related to Qualified Dispute Resolution Centers

Gambling Business and Occupation Tax (Nonprofit Organizations-Fundraising Exemption)

New "Economic Nexus" in Washington State May Impact "Foreign Corporations"

Tax Exemptions for Temporary Medical Housing Provided by Health or Social Welfare Organizations

Fireworks Sales: Distributors and Retail Sales by Nonprofit Organizations Tax Registration and Reporting Requirements Information Notice

B&O Tax Deduction Related to Qualified Dispute Resolution Centers

Registered Out-of-state Businesses Currently not Reporting Income from Service Activities - New Apportionment for Certain Income

Chemical Dependency Service Providers-Tax Change

Tax Exemptions for Temporary Medical Housing Provided by Health or Social Welfare Organizations

Purchase of Clay Targets by a Nonprofit Gun Club

Nonprofit Fundraising

Grants for Salmon Restoration -- Tax Change

New Apportionment Method

Important Changes for Non-Profit Org & Local Governments

Purchase of Clay Targets by a Nonprofit Gun Club

B&O TAX -- DEDUCTION -- HEALTH OR SOCIAL WELFARE SERVICES -- HEALTH OR SOCIAL WELFARE ORGANIZATION -- FOR-PROFIT GROUP HOME. Amounts received from federal, state or local governments are deductible from the measure of B&O tax under RCW 82.04.4297 if the recipient is a nonprofit health or social welfare organization. A for-profit group home, as such, is not a "health and social welfare organization" within the meaning of RCW 82.04.431, and therefore, does not qualify for the deduction. THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO.

NONPROFIT CORPORATION -- LIABILITY FOR B&O TAX. Washington's Revenue Act contains no general exemption from taxation for nonprofit corporations.

SERVICE B&O TAX -- HEALTH OR SOCIAL WELFARE ORGANIZATION -- DEDUCTION -- COMPENSATION FROM PUBLIC ENTITIES -- CONDITIONS FOR DEDUCTION. A "health or social welfare organization" may deduct amounts received from public entities for health or social welfare services if the organization meets the requirements of RCW 82.04.431. The requirements include having a minimum of eight members on its governing board, none of whom is a paid employee.

SERVICE B&O TAX -- HEALTH OR SOCIAL WELFARE SERVICES -- NEIGHBORHOOD REVITALIZATION -- LOW INCOME DEFINED. Health or social welfare services include neighborhood revitalization programs for home buyers who qualify for low-income housing assistance. Low income means income does not exceed eighty percent of the median income for the area.

B&O TAX -- EXEMPTION -- SHELTERED WORKSHOPS. The definition of "handicapped" under RCW 82.04.385 includes recovering substance abusers who have completed rehabilitation programs. A nonprofit organization operating a sheltered workshop which also includes among its clients "vocationally-disadvantaged" persons who do not qualify as handicapped will not lose entitlement to the exemption if it otherwise meets the statutory requirements, including proving its "primary purpose" is to provide training and employment to clients who qualify as "handicapped" under the statute.

B&O TAX -- HEALTH OR SOCIAL WELFARE SERVICES -- COMPENSATION FROM PUBLIC ENTITIES -- CONDITIONS FOR DEDUCTION. A health or social welfare organization may deduct amounts received from public entities for health or social welfare services if the organization's structure and activities meet the statutory requirements. Regional community action council established by law to plan for and coordinate emergency medical and trauma services may deduct income received from state, federal, and local sources. ACCORD: Det. No. 91-090, 11 WTD_ (1991), 86-302A, 4 WTD 39 (1987).

HEALTH OR SOCIAL WELFARE ORGANIZATION -- OFFICERS -- PAID EMPLOYEES. A nonprofit corporation with a governing board of eight individuals, five of whom are officers indirectly paid through another entity does not qualify as a health or social welfare organization.

HEALTH AND SOCIAL WELFARE ORGANIZATION -- BLOOD BANK -- TISSUE BANK --HEALTH CARE ACTIVITIES. As long as a blood/tissue/bone bank meets the requirements of RCW 82.04.431 for a health and social welfare organization, including being a nonprofit corporation and having at least eight seats on its board, it will qualify for the B&O tax deduction for amounts sold to federal, state, and municipal entities. The activity of obtaining and selling blood, tissue, and bone is a health care activity.

B&O TAX -- EXEMPTION -- SHELTERED WORKSHOPS. The definition of "handicapped" under RCW 82.04.385 includes recovering substance abusers who have completed rehabilitation programs. A nonprofit organization operating a sheltered workshop which also includes among its clients "vocationally-disadvantaged" persons who do not qualify as handicapped will not lose entitlement to the exemption if it otherwise meets the statutory requirements, including proving its "primary purpose" is to provide training and employment to clients who qualify as "handicapped" under the statute.

B&O TAX -- HEALTH OR SOCIAL WELFARE ORGANIZATION DEFINED. A health or social welfare organization must be a nonprofit entity governed by a board of directors of at least eight individuals none of whom may be an employee. If any director, regardless of the number of members of the board, is an employee, then the entity does not qualify as a health or social welfare organization.

B&O TAX -- EXEMPTION -- DONATION -- GRANTS FOR MEDICAL RESEARCH. A grant received by the corporate affiliate of a VA Hospital for medical research may be excluded from the measure of the affiliate’s B&O tax if the three requirements of ETB 572.04.169 are met. Amounts excluded include those used to defray administrative expenses, as well as amounts used directly for the qualifying charitable purpose.

B&O TAX – EXEMPTIONS – HEALTH OR SOCIAL ORGANIZATIONS – PRIVATE PAYORS. RCW 82.04.4297 provides an exemption from B&O tax for payments that qualifying health or social organizations receive from governmental agencies. In the absence of a provision that exempts payments that a qualifying health or social organization receives from private individuals, such payments are subject to B&O tax.

B&O TAX – NONPROFIT ORGANIZATIONS – AMOUNTS RECEIVED TO ADMINISTER QUALIFIED CHARITABLE PURPOSES. B&O tax does not apply to amounts received from a grantor by a qualifying nonprofit organization for use in offsetting the administrative expenses of administering the grants and carrying out the nonprofit’s charitable purpose.

SALES TAX -- USE TAX -- COMMUNITY ACTION AGENCY -- MATERIALS USED IN WEATHERIZATION FOR LOW INCOME PERSONS. The purchase of materials by a community action agency is exempt of sales and use tax where the agency installs the materials into the homes of low income persons.

MINISTERS -- RELIGIOUS ORGANIZATIONS -- SERVICE B&O TAX. There is no general exemption from B&O tax for religious organizations. Fees received by a minister for performing wedding ceremonies are taxable as B&O Service.

RETAIL SALES TAX -- FUNDRAISING ACTIVITIES – NONPROFITS. A nonprofit high school’s sale of course books to students is not a fundraising activity.

USE TAX -- EXEMPTION FOR DONATED ITEMS. Printing charges for coupons used to track and quantify a subsequent donation to a non-profit organization were properly subject to retail sales tax. The use tax exemption for donated items does not provide a basis for refund of retail sales tax properly paid when purchasing items.

RCW 82.04.4297 -- B&O TAX -- COMPENSATION FROM PUBLIC ENTITIES FOR HEALTH OR SOCIAL WELFARE SERVICES. A health or social welfare organization, as defined in RCW 82.04.431, may deduct amounts received from public entities for health or social welfare services if the organization's structure and activities meet the statutory requirements. Local community action council established by law to oversee and manage emergency medical and trauma services, as well as to train emergency medical and trauma personnel, may deduct income received from state, federal, and local government sources.

RCW 82.04.080: GROSS INCOME OF BUSINESS – PAYMENTS TO A NON-PROFIT ORGANIZATION. There is no specific deduction or exemption for income received by a non-profit organization. B&O tax is imposed on the business income of non-profit organizations, unless a specific deduction or exemption applies.

RCW 82.04.4282: DEDUCTION FOR CONTRIBUTIONS AND DONATIONS. Payments do not qualify as “contributions” or “donations” if the funds are not provided for a gratuitous purpose and the party providing retains control over the funds.

RCW 82.08.050(3); RULE 169 – RETAIL SALES TAX – CONSTRUCTION WORK -- NONPROFIT CORPORATION. Nonprofit organizations are not exempt from the payment of retail sales taxes on construction work.

RETAIL SALES TAX -- HEALTH AND SOCIAL SERVICE ORGANIZATIONS -- HEALTH AND SOCIAL SERVICES -- WEATHERIZATION ASSISTANCE -- GRANTS. Qualified health and social service organizations which perform health and social services by providing weatherization assistance or minor home repair for low income homeowners or renters are not making "retail sales", notwithstanding that the work entails constructing, repairing, decorating or improving homes. Grants received from the Federal or State government to provide such services are not subject to retail sales tax in any part.

B&O TAX -- DEDUCTION -- HEALTH OR SOCIAL WELFARE SERVICES -- HEALTH OR SOCIAL WELFARE ORGANIZATION -- HOSPITAL CLINICS AND DEPARTMENTS. Compensation for health care services provided by a hospital department or clinic are entitled to the deduction of RCW 82.04.4297 if the hospital is a health or social welfare organization and the compensation is from the state or federal government.

B&O TAX -- EXEMPTION -- SHELTERED WORKSHOPS -- JANITORIAL SERVICES. Income of a non-profit corporation whose handicapped workers provide janitorial services is exempt under the sheltered workshop statute, so long as the taxpayer complies with all other requirements of that statute, RCW 82.04.385.

B&O TAX -- EXEMPTION -- SHELTERED WORKSHOPS. Income of a non-profit corporation is exempt from B&O tax liability if manufacturing or handiwork is carried on at the rehabilitation facility and if the facility is operated for the purpose of providing gainful employment or services to the handicapped or is providing evaluation and work adjustment services for handicapped individuals.

RETAILING B&O TAX -- RETAIL SALES TAX -- EXEMPTION -- NONPROFIT ORGANIZATION -- FUND RAISING DRIVE -- DURATION -- GROSS INCOME. The gross receipts of a fund raising activity conducted by a non-profit organization is not exempt from the B&O tax and sales tax liability where the activity extends over a period of more than two days and/or the gross income exceeds one thousand dollars.

B&O TAX -- SALES TAX -- EXEMPTION -- BENEVOLENT ORGANIZATIONS -- CONCESSION SALES. The sale of concession food items by a nonprofit theater group for 45 minutes per performance exceeds the two day limit for excise tax exemption.