WAC 171

(Directive)
Document Reference Description Date of Issue Status
8171.1

Value of Rock from State or Federal Pits Cancelled 7/17/2002

8171.2

Paving Cuts

(Industry Guides)
Document Reference Description Date of Issue Status
N/A

Construction Guide

Revised Codes of Washington (RCW)
Document Reference Description Date of Issue Status
82.04.050

"Sale at retail", "retail sale"

82.04.190

"Consumer"

82.04.250

Tax on retailers.

82.04.270

Tax on wholesalers, distributors.

82.04.280

Tax on printers, publishers, highway contractors, extracting or processing for hire, cold storage warehouse or storage warehouse operation, insurance general agents, radio and television broadcasting, consumer as defined in RCW 82.04.190(6)--Cold storage warehouse defined--Storage warehouse defined--Periodical or magazine defined.

82.04.415

Exemptions--Sand, gravel and rock taken from county or city pits or quarries, processing and handling costs.

82.08.020

Retail Sales Tax Imposed

82.14.030

Sales and Use Taxes Authorized - Additional Taxes Authorized - Maximum Rates

Washington Administrative Codes (WAC)
Document Reference Description Date of Issue Status
458-20-171

Building, repairing or improving streets, roads, etc., which are owned by a municipal corporation or political subdivision of the state or by the United States and which are used primarily for foot or vehicular traffic.

Excise Tax Advisories (ETA)
Document Reference Description Date of Issue Status
16.12.171

JOB SITE PLANTS AND PUBLIC ROAD CONSTRUCTION CONTRACTS Revised 2/2/09 See ETA 3071.2009

202.12.171

CONSTRUCTION OF PRIVATE ROADS INTENDED TO BE DEDICATED TO THE COUNTY Revised 2/2/09 See ETA 3025.2009

255.04.171

PUBLIC ROAD CONSTRUCTION FOR PRIVATE INDIVIDUALS Revised 2/2/09 See ETA 3033.2009

259.12.171

SALES TO PUBLIC ROADS CONTRACTOR FOR USE OUTSIDE THE STATE Cancelled Effective 03/28/08. This document explains that a construction company that purchases materials in Washington that will be incorporated into a publicly-owned road outside of Washington is not subject to use tax on the value of those materials. While this is accurate, it is no longer necessary to have an ETA explaining it.

264.12.171

PAVING CUTS Revised 2/2/09 See ETA 3035.2009

3025.2009

Construction of private roads intended to be dedicated to the county

3033.2009

Public road construction for private individuals

3035.2009

Paving cuts

3050.2009

Dump truck operators

3050.2013

Dump Truck Operators The Department has issued ETA 3050.2013. This Excise Tax Advisory (ETA) explains the public utility (PUT), business and occupation (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators.

3050.2014

Dump Truck Operators This ETA explains the public utility tax (PUT), business and occupation tax (B&O), and retail sales tax reporting responsibilities for various services commonly provided by dump truck operators. This ETA previously issued on May 24, 2013, is being reissued in order to clarify how to distinguish the taxability of persons hauling for hire from persons hauling construction debris.

3052.2009

Retail sales tax: Road construction

3052.r109

Retail sales tax: Road construction. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

3053.2009

Form oil purchased by building contractors

3067.2009

Business & occupation tax: Contract assignments

3068.2009

Taxability of highway construction contract projects administered by Washington State Department of Transportation

3068.r109

Taxability of highway construction contract projects administered by Washington State Department of Transportation. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

3071.2009

Public Road Construction Materials – Measure of Tax

3134.2009

Transactions between related entities

3148.2009

Public road construction included in a lump sum general construction contract

3153.2009

Road construction -Contractors applying sand, gravel and rock - sales tax - use tax

3153.r109

Road construction - Contractors applying sand, gravel and rock - sales tax - use tax. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

3154.2009

Public road construction -- Off-site activities

330.12.171

ASPHALT MIXED AT PIT SITE Revised 2/2/09 See ETA 3071.2009

366.04.171

ROAD CONSTRUCTION UNDER FEDERAL TIMBER PURCHASE AGREEMENTS - This document provides incorrect tax-reporting information. It states that a subcontractor performing logging road construction under the terms of a federal timber purchase agreement is considered a public road contractor. This is incorrect. Logging road construction, whether performed by the timber buyer or a subcontractor, is considered a part of the logging activity. (See also Lyle Wood Products vs. Dept.

370.08.171

RETAIL SALES TAX: OFF-SITE CONSTRUCTION Revised 2/2/09 See ETA 3154.2009

372.04.171

RETAIL SALES TAX: PUBLIC ROAD CONSTRUCTION Revised 2/2/09 See ETA 3052.2009

373.08.171

Retail sales tax: Logging performed as an incident to construction of privately owned roads -This document explains that the felling, bucking, and decking of logs while constructing a road is incidental to the road construction contracts. This document is no longer needed. WAC 458-20-13501 explains the taxability of logging performed as an incident to construction. Cancelled by ETA 2003 -3s 07/16/01

4.8.12.171

ROAD CONSTRUCTION - CONTRACTORS APPLYING SAND, GRAVEL AND ROCK SALES TAX - USE TAX Revised 2/2/09 See ETA 3153.2009

433.04.170.171

BUSINESS & OCCUPATION TAX: CONTRACT ASSIGNMENTS Revised 2/2/09 See ETA 3067.2009

437.08.171

TAXABILITY OF HIGHWAY CONSTRUCTION CONTRACT PROJECTS ADMINISTERED BY WASHINGTON STATE DEPARTMENT OF HIGHWAYS Revised 2/2/09 See ETA 3068.2009

484.04.171

CORPORATION AND STOCKHOLDER DISTINCT ENTITIES FOR BUSINESS AND OCCUPATION TAX PURPOSES Revised 2/2/09 See ETA 3134.2009

49.04.171

PUBLIC ROAD CONSTRUCTION INCLUDED IN A LUMP SUM GENERAL CONSTRUCTION CONTRACT Revised 2/2/09 See ETA 3148.2009

52.04.171

CONSTRUCTION OF HIGHWAY TUNNELS FOR PUBLICLY OWNED ROADS Cancelled Effective 03/28/08. This document explains that construction of tunnels for highways owned by the federal government is subject to the public road construction B&O tax classification, and a contractor installing linings in those tunnels is the consumer of the lining materials. There is no need for this information as WAC 458-20-171 provides sufficient information about the tax-reporting responsibilities of persons building roads owned by the federal government.

Washington Tax Decisions (WTD)
Document Reference Description Date of Issue Status
1 WTD 353

USE TAX - ROAD CONSTRUCTION - EXTRACTED MATERIALS. The extraction and application upon the roadway of materials by a road builder is a use of those materials for use tax purposes.

1 WTD 353

USE TAX - VALUE OF ARTICLE USED - ROAD CONSTRUCTION - MATERIALS EXTRACTED BUT NOT PROCESSED. Prior to December 28, 1982, under the terms of Excise Tax Bulletin (ETB) 4.8.12.171, use tax is not applied to materials extracted by road builders and used in building roads if the materials are not processed or manufactured. As of that date, under the terms of the ETB as revised, use tax is applicable. Under the ETB it is measured by the cost of extraction. Where cost figures are not available the tax is measured by the retail selling price, as nearly as possible, of similar products.

1 WTD 353

USE TAX - ROAD CONSTRUCTION - EXTRACTED MATERIALS - LOGGING ROADS - SALES TAX COLLECTED FROM CUSTOMER. Use tax will not be asserted on the use of extracted materials by persons building logging roads where those persons held a reasonable and good faith belief that they were performing a retail sale and they collected sales tax from their customers on the total charge.

10 WTD 25

RCW 82.04.280 & RCW 82.04.050 -- PUBLIC ROAD CONSTRUCTION -- MASS TRANSIT FACILITY -- PHASED CONSTRUCTION. Demolition contract for the site preparation for a transit mall taxed under the public road construction classification where the contract was done as part of an approved plan to build the transit facility.

16 WTD 25

B&O TAX -- RETAIL SALES TAX -- PUBLIC ROAD CONSTRUCTION -- HOUSING DEVELOPMENTS. The construction of streets as part of a housing development will be considered public road construction if it is reasonably certain that the streets will be dedicated to a public body. Otherwise, such construction will be treated as a retail sale.

17 WTD 278

PUBLIC ROAD CONSTRUCTION - MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES - MUNICIPAL AIRPORT TERMINAL. An airport terminal owned and operated by a port district, which terminal does not serve an urban public transportation or transit function, is not included within the scope of the phrase mass public transportation terminal and parking facility. Mere ownership of an airport terminal by a municipality or a political subdivision of this state does not make the terminal a mass public transportation terminal.

17 WTD 278

PUBLIC ROAD CONSTRUCTION - MASS PUBLIC TRANSPORTATION - WHAT CONSTITUTES. The term mass public transportation refers to urban, public transportation systems"; citing, Municipality of Metropolitan Seattle v. O'Brien, 86 Wn.2d 339, 342, 544 P.2d 729 (1976).

17 WTD 278

PUBLIC ROAD CONSTRUCTION -- MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES -- WHAT CONSTITUTES.

17 WTD 278

PUBLIC ROAD CONSTRUCTION -- MASS PUBLIC TRANSPORTATION TERMINALS AND PARKING FACILITIES -- PORT DISTRICT -- AIRPORT. Because a port district is not a municipality as defined by RCW 35.95.020, or an RTA, and because a port district is generally not authorized to engage in a transportation business, Taxpayer, as a port district, does not qualify for public road construction tax treatment when it builds, repairs, or improves an airport passenger terminal which does not serve an urban public transportation system.

17 WTD 322

SALES TAX -- TRUST FUND ACCOUNTABILITY ASSESSMENT -- PUBLIC WORKS CONTRACT -- RETAINAGE -- APPLICATION OF. Retainage paid the Department from a public works contract must first be applied to tax, interest, and penalty liability arising directly out of the project for which it was withheld before it may be used for other state tax arrearages.

17 WTD 322

SALES TAX -- TRUST FUND ACCOUNTABILITY ASSESSMENT -- PENALTIES AND INTEREST. A trust fund accountability assessment may include penalties and interest that accrue on the tax debt of a defunct corporation.

19 WTD 122

RETAIL SALES TAX -- WHOLESALING -- SERVICES RENDERED IN RESPECT TO CONSTRUCTION -- PUBLIC ROAD CONSTRUCTION -- GOVERNMENT CONTRACTING. A person hired for his skill, knowledge, and expertise in operating a water truck to compact soils at construction sites is rendering services in respect to construction. The person is not merely renting equipment with an operator to perform work under the specific direction of a lessee.

19 WTD 160

RETAIL SALES TAX EXEMPTION PUBLIC ROAD CONSTRUCTION. Legally required mitigation work performed on wetlands does not qualify as public road construction when those wetlands are physically separate from the actual county road construction project and/or when the wetlands are owned by the state.

19 WTD 270

COST PLUS CONSTRUCTION CONTRACTS INCLUDABLE EXPENSES Where the entity providing the cost plus services is liable for an expense, that amount is included in the total project cost even if the expense is paid by another individual.

19 WTD 307

RETAILING B&O TAX VS. PUBLIC ROAD CONSTRUCTION B&O TAX SERVICES IN RESPECT TO CONSTRUCTING -- WATER DRAINAGE SYSTEMS -- Contractor who installs lines that collect water from downspouts on houses to drain the downspouts into sewer catch basins properly taxed under the retailing classification. Such lines handle runoff from roofs, not the streets and roads in which the lines are constructed.

19 WTD 447

PUBLIC ROAD CONSTRUCTION CONSUMER. Where a contractor performs road construction for a municipality, the contractor will be required to pay retail sales/use tax on the materials used. However, where the contractors activities on a project were limited to supplying labor, and the contractor neither purchased nor installed any materials, the contractor neither used nor consumed any materials on which to assess retail sales or use tax.

20 WTD 32

USE TAX PUBLIC ROAD CONSTRUCTION vs. CUSTOM CONSTRUCTION DUTY TO KEEP AND PRESERVE RECORDS. Whether a contractor/taxpayer who performed work on road projects was engaged in custom construction or in public road construction depended on whether the road projects were done on state-owned land or on land owned by a city, county, or other political subdivision of the state or the federal government. The taxpayer failed to keep and preserve records to support his claim that the road projects were custom construction.

20 WTD 385

B&O TAX PUBLIC ROAD CONSTRUCTION B&O TAX -- HOOK-UP FEE CREDITS. Taxpayer, as landowner, owed hook-up fees collected by the municipality as payment for the construction of a stormwater treatment plant. Taxpayer, as contractor, received hook-up fee credits as payment (income) for building the stormwater treatment plant. The income received as hook-up fee credits for building a stormwater treatment plant is subject to public road construction B&O tax.

21 WTD 240

RCW 82.04.050, RCW 82.04.190, RCW 82.04.270: RETAIL SALES TAX RENTAL OF EQUIPMENT WITH OPERATOR -- PUBLIC ROAD CONSTRUCTION. A person hired by a county for his skill, knowledge, and expertise in bridge construction is not merely renting equipment with an operator to perform work under the specific direction of a lessee, but was acting as a subcontractor whose work was subject to contract specifications. The proper tax classification for such activities is public road construction.

23 WTD 182

USE TAX PUBLIC ROAD CONSTRUCTION USE OF MATERIALS TAKEN FROM A COUNTY STOCKPILE. A public road contractor is not exempt from use tax on its use of rock materials taken from a county stockpile. The provision in Rule 171 that partially excludes from the use tax the use of materials a county or city has taken from its own pit and stockpiled for placement on its own roadway is an exemption for cities and counties only.

23 WTD 182

USE TAX ROAD CONSTRUCTION JOB SITE DESIGNATED STOCKPILES. Where building materials or components are fabricated at a location off the job site, use tax is due on the use of the materials, measured by the value of the materials, including the labor of preparation. The exception that recognizes asphalt and concrete mixing plants that the contractor has temporarily located in the vicinity of the job as part of the job site, does not extend to off-site county stockpiles of materials designated by the county for use in the project.

23 WTD 182

RETAIL SALES TAX USE TAX PUBLIC ROAD CONSTRUCTION APPLICATION OF MATERIALS. A contractor that applies sand, gravel, rock, and similar materials in performance of a public road construction contract is the consumer of the materials, and is liable for retail sales tax on the purchase of the materials, or use tax if the materials were acquired under circumstances in which the retail sales tax was not paid.

23 WTD 276

RETAIL SALES TAX EXEMPTION PUBLIC ROAD CONSTRUCTION -- PARKING. Improvements to the portion of a right of way that parallels a primary arterial and is used for motor vehicle circulation, parking, and access for homes, businesses, and a pedestrian pathway qualify for the public road construction exemption.

24 WTD 297

RETAIL SALES TAX USE TAX PUBLIC ROAD CONSTRUCTION TAILGATE SPREADING OF MATERIALS CONSUMER. A public road contractor that incorporates road materials into the roadway by having its materials supplier deliver the materials by tailgate spreading, is the consumer of the materials, and retail sales tax applies to the sale of the materials to the contractor. The manner of delivery, by tailgate spreading, does not, by itself, make the materials supplier the consumer of the materials. Mere hauling and tailgate spreading of materials on public road jobs is not public road construction.

25 WTD 133

RETAIL SALES TAX - PUBLIC ROAD CONSTRUCTION - BOAT RAMP. Because a boat ramp is not used primarily for foot or vehicular traffic, the ramps construction does not constitute public road construction, and charges for the ramp's construction are subject to retail sales tax

34 WTD 102

Rule 171; RCW 82.04.050: B&O TAX – RETAIL SALES TAX – PUBLIC ROAD CONSTRUCTION. Rule 171 makes clear that only those items that are actually “part of” the road system, its lighting system, or its drainage system are exempt from retail sales tax.

34 WTD 484 (2015)

RULE 171; RCW 82.04.050: RETAIL SALES TAX EXCLUSION FOR PUBLIC ROAD IMPROVEMENTS. The labor and materials charges for the water line reconstruction or relocation were excluded from retail sales tax. The construction constituted public road construction because it was the reconstruction or relocation of a facility in the course of a public road improvement; and Taxpayer was responsible for the cost of relocating the water line.

34 WTD 541 (2015)

Rule 171; RCW 82.04.050: B&O TAX – RETAIL SALES TAX – PUBLIC ROAD CONSTRUCTION. Taxpayer is not exempt from retail sales tax where the improvement to its combined sewer and storm water system does not affect the drainage of roads actually under construction.

5 WTD 147

B&O/RETAIL SALES TAX -- CLASSIFICATION -- PUBLIC ROAD CONSTRUCTION -- STORM SEWERS. Construction of storm sewers that serve a public road or street is taxable under the B&O category, Public Road Construction, even though portions of such construction extend outside the boundaries of the street right-of-way and even though the drain fields may also accommodate some sewage on an incidental basis.

5 WTD 311

CANONS OF CONSTRUCTION--PUBLIC ROAD CONSTRUCTION -- CONTRACTOR -- "PILOT CAR" AND " FLAGGING". "Pilot car" and "flagging" activities do not fall within the Rule 171 definition of contractor.

6 WTD 317

USE TAX--PUBLIC ROAD CONSTRUCTION -- USE TAX ON ROAD MATERIALS -- DEFAULTING SUBCONTRACTOR. A prime road construction contractor who undertakes a public road installation contract of a defaulting road subcontractor is itself the installing party who is liable for use tax upon materials installed in performance of the subcontract.

6 WTD 465

B&O TAX -- CLASSIFICATION -- PUBLIC ROAD CONSTRUCTION -- DRAINAGE SYSTEM -- SURFACE RUNOFF. In order for the construction of a drainage system in a street or road to qualify as public road construction it must carry surface runoff from the streets and roads in which the system is constructed.

7 WTD 299

RCW 82.04.280 -- RCW 82.04.050 -- PUBLIC ROAD CONSTRUCTION -- MASS TRANSIT FACILITY -- BUS MAINTENANCE AREA -- BUS STORAGE AREA. Bus maintenance and storage facilities are considered to be mass transit facilities and construction or modifications to such buildings are considered public road construction, because such buildings are directly related to foot and vehicular traffic.

9 WTD 231

B&O TAX -- EXTRACTING -- LOGGING ROAD CONSTRUCTION -- CONSTRUCTION CREDITS. Where taxpayer/extractor has purchased a timber contract and builds logging roads, amounts received by the taxpayer as "road building credits" are not credits against the purchase price of the timber contract, but B&O taxable payments for building the logging roads benefiting the seller of the timber contract.