WAC 190

"Person," "company."

Tax on Retailers

Tax on wholesalers.

Exemptions -- Certain corporations furnishing aid and relief.

Deductions--Nontaxable business.

Tax imposed -- Retail sales -- Retail car rental.

Exemptions -- Sales to federal corporations providing aid and relief.

Sales and use taxes authorized--Additional taxes authorized--Maximum rates

Sales to and by the United States-Doing business on federal reservations-Sales to foreign governments WAC 458-20-190explains the tax reporting responsibilities of persons: Making sales to the United States and to foreign governments; Engaging in business activities within federal reservations; and Cleaning up radioactive waste and other by-products of weapons production for the United States. The Department amended this rule to recognize ESSB 6170 (chapter 469, Laws of 2009).

Sales to and by the United States, its departments, institutions and instrumentalities--sales to foreign governments.

Taxability of federal instrumentalities and federally created corporate entities - Cancelled effective 2/7/05 because the information is sufficiently addressed in WAC 190 (as adopted on 1/5/05).

RENTALS TO FEDERAL GOVERNMENT EMPLOYEES RECEIVING REIMBURSEMENT AND SALES TAX EXEMPTION.The issues discussed in this document are already addressed in WAC 458-20-190 (Sales to and by the United States, its departments, institutions and instrumentalities--Sales to foreign governments.).Cancelled by ETA 2003 -06/30/99.

NONPROFIT CORPORATION PURCHASING EQUIPMENT WITH FEDERAL FUNDSThe issues discussed in this document are already addressed in WAC 458-20-190 (Sales to and by the United States, its departments, institutions and instrumentalities--Sales to foreign governments.). Cancelled by ETA 2003 -06/30/99.

NATIONAL GUARD POST EXCHANGE SALES - Cancelled effective 2/7/05 because the information is sufficiently addressed in WAC 190 (as adopted on 1/5/05).

Occupational Medicine Services and the Preferential B&O Rate under RCW 82.04.263 Cancelled ETA 3007.2009 Occupational Medicine Services and the Preferential B&O Rate Under RCW 82. 04.263. This ETA explains the circumstances under which occupational medicine services are directly connected to and essential for cleanup services, and thus eligible for the preferential B&O tax rate provided by RCW 82.04.263.

Information Technology Services and the Preferential B&O Rate Under RCW 82.04.263 Cancelled ETA 3157.2009 Information Technology Services and the Preferential B&O Rate Under RCW 82. 04.263. This ETA explains the circumstances under which information technology services systems are directly connected to and essential for cleanup services, and thus eligible for the preferential B&O tax rate provided by RCW 82.04.263.

Purchases made with Funds Provided by the Federal Government. The Department has issued ETA 3175.2013. This ETA provides guidance regarding the tax collection and reporting requirements when buyers use funds provided by the United States to pay for a purchase. This ETA identifies federal programs that have been reviewed by the Department of Revenue (Department), and are included to provide general context.

BUSINESS AND OCCUPATION TAX--FEDERAL INSTRUMENTALITY--MEDICARE INTERMEDIARY - Cancelled effective 2/7/05 because the information is sufficiently addressed in WAC 190 (as adopted on 1/5/05).

BUSINESS AND OCCUPATION TAX--MEDICAL SERVICE ASSOCIATIONS Cancelled effective 2/7/05 because the information is sufficiently addressed in WAC 190 (as adopted on 1/5/05).

CAPEHART CONSTRUCTION CONTRACTS Cancelled effective 02/28/07 This document explains that amounts a taxpayer received from a Capehart construction contract with a private corporation are subject to retail sales tax, noting that this position was affirmed by Murray v. State, 62 Wn.2d 619, 384 P.2d 337 (1963). This issue is adequately addressed in Det 01-129, 21 WTD 031.

Documenting Purchases paid by United States Government Credit Card

No Sales Tax Due on Purchases Made With American Red Cross Cash Assistance Cards or FEMA Debit Cards Issued to Hurricane Victims Cancelled See ETA 3156.2009

Radioactive Waste Cleanup - Support Services May Now Qualify for Reduced B&O Tax Rate

Taxability of Federal Instrumentalities and Federally Created Corporate Entities

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

No Sales Tax Due on Purchases Made With American Red Cross Cash Assistance Cards or FEMA Debit Cards Issued to Hurricane Victims

Important Information for Retailers Making Sales to the US Government

New Apportionment Method

Sales Tax Exemption for Foreign Diplomats

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

Lodging Purchases paid with a United States Government Credit Card

Penalty and Interest Waivers for Active Duty Military Personnel

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

SALES TAX -- ESTOPPEL -- REPRESENTATION BY AUDITOR.The written statement by a previous auditor that rentals to the federal government are not subject to sales tax misled taxpayer in that it did not distinguish between the government per se and government employees.Estoppel found.Relief granted.ACCORD:Det 89-77, 7 WTD 171 (1989).

SALES TAX -- EXEMPTION -- CAR RENTALS -- FEDERAL GOVERNMENT.The rental of automobiles directly to the federal government is not sales taxable.The rental of automobiles to employees of the federal government is sales taxable.ETB 248.04.159. 190.

RETAIL SALES/USE TAX -- EXEMPTION -- FEDERAL GOVERNMENT -- MEDICARE ASSIGNMENTS.When a provider takes an assignment of a patient's rights to Medicare reimbursement, the patient--and not the federal government--is still the buyer and user of the product or service.The patient will owe retail sales tax or use tax to the state.This is an obligation separate and apart from the amount charged and accepted under the Medicare assignment agreement, and the provider only collects these amounts and holds them in trust for the state.

FEDERAL INSTRUMENTALITY -- FARM CREDIT BANK SERVICE CORPORATION -- LIABILITY FOR B&O TAX.An instrumentality of the United States is not liable for the business and occupation tax.A service corporation organized under the provisions of 12 U.S.C. 2211 is a federal instrumentality.

RETAIL SALES AND USE TAX EXEMPTIONS.Taxpayer is exempt from payment of Washington's retail sales and use taxes as an entityincorporated under an act of the congress of the United States whose principal purpose is to furnish volunteer aid to members of the armed forces of the United States and to carry on a system of national and international relief. [To the extent Det. No. 89-123, 7 WTD 229 (1989) is inconsistent with the ruling in this case, it is overruled.]

AGENCY OR INSTRUMENTALITY OF UNITED STATES -- RETAIL SALES AND USE TAX EXEMPTIONS.Taxpayer is exempt from payment of Washington's retail sales and use taxes as an agency or instrumentality of the United States that is directly operated and controlled by the government for the benefit of the public generally.

SALES TAX -- EXEMPTION -- CONTRACTOR --FEDERALLY CHARTERED CREDIT UNION.12 USC §1768, which exempts federally chartered credit unions from most taxes imposed by states, does not exempt a contractor from taxes imposed on it.The fact that the economic burden may be borne by the credit union does not invalidate the taxes or alter the liability of the contractor for them.

B&O TAX -- FEDERAL INSTRUMENTALITY -- MEDICARE INTERMEDIARY.A fiscal intermediary for Medicare is not a federal instrumentality.Receipts from the federal government for administrative fees are subject to service B&O tax.

B&O TAX – RETAIL SALES TAX -- BANKRUPTCY TRUSTEE – AGENCY OR INSTRUMENTALITY OF UNITED STATES – TAX IMMUNITY.Under the Supremacy Clause of United States Constitution, U.S. Const., Art. VI, cl.

RETAIL SALES TAX -- BANKRUPTCY TRUSTEE – AGENCY OR INSTRUMENTALITY OF UNITED STATES – DIRECT TAXATION.A state can never directly tax the United States but is free to tax those private parties with whom the Government does business, even when the financial burden is passed on to the United States, so long as it is done without discrimination.A bankruptcy trustee’s purchase of equipment is not immune from taxation although the financial burden may ultimately be passed on to the United States.

10 U.S.C. § 2875: RETAIL SALES TAX -- FEDERAL INSTRUMENTALITY.An entity carrying out projects for the acquisition or construction of housing units suitable for use as military family housing or as military unaccompanied housing, established pursuant to 10 U.S.C. § 2875, is not an instrumentality of the United States for purposes of RCW 82.04.050(9), since it serves a commercial purpose for private profit which is separate and distinct from the purposes of the United States.

USE TAX -- CAPITAL ASSETS -- FEDERAL TO STATE CHARTERED CREDIT UNION.The use tax exemption on the acquisition and use of capital assets is lost by a federally chartered credit union when it converts to a state chartered credit union.Use tax is due because on conversion a new entity is formed that does not have exempt status.

B&O TAX – CLEANUP OF RADIOACTIVE WASTE – QUALIFICATION FOR THE SPECIAL TAX RATE.Qualification for the special tax classification is based solely on the activity performed with the activity being “integral and necessary to the direct performance of the cleanup.”The design of equipment to sample nuclear waste and procedures to vitrify nuclear waste qualifies when the design work is both indispensable and directly precedes the performance of the qualifying activity.

RETAIL SALES TAX - EXEMPTION - FEDERAL LAND BANK.Lease payments received by a taxpayer from a Federal Land Bank for the rental of motor vehicles will be exempt of retail sales tax because federal law prohibits its collection.

RETAIL SALES -- CONSTRUCTION FOR BUYER WITH LICENSE TO USE LAND OWNED BY UNITED STATES -- SALES TO UNITED STATES DISTINGUISHED.Where a taxpayer/City had a license to use federal land and purchased tangible personal property which was installed on the land, the taxpayer was the buyer and retail sales tax was due.

RETAIL SALES TAX -- EXEMPTION -- FEDERAL GOVERNMENT AND ITS DEPARTMENTS -- WASHINGTON AND OREGON CIVIL AIR PATROLS.The Washington and Oregon Civil Air Patrols are not federal departments, institutions or instrumentalities exempt from retail sales tax. Seller is liable for collection of retail sales tax on sales to such groups.

THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 94-057, 16 WTD 160 (1996).

B&O TAX -- FOOD SALES TO U.S. GOVERNMENT. Gross proceeds received from sales of food products to military and fromrelated food preparationat military delicatessens and bakeries is taxable under the state Business and Occupation Tax.

WHOLESALING.Sale of food products to military and further preparation of such food by taxpayer for resale by military is classified as wholesaling rather than service activity due tointerrelationship of two activities and primary nature of wholesaling aspect of contract.