WAC 195

"Gross proceeds of sales."

"Gross income of the business."

Tax on retailers.

Deductions -- Motor vehicle fuel and special fuel taxes.

"Selling Price"

Definitions.

Deductions in computing tax.

Taxes deductibility.

Taxes deductibility.

E911 Taxes Must Be Collected by Sellers of Prepaid Wireless

New State Enhanced 911 Tax on Cellular Telephone Service

What You Need to Know about Itemizing the B&O Tax

B&O TAX -- DEDUCTIONS -- SATELLITE FEES, COPYRIGHT FEES & FRANCHISE/UTILITY TAXES -- CABLE TELEVISION CO. Satellite and copyright fees passed on to Washington subscribers by Washington cable company are fully B&O taxable. Taxpayer's activity is entirely intrastate, thus no commerce clause violation. Franchise tax not deductible because not collected by taxpayer as agent for taxing authority.

B&O TAX -- DEDUCTION -- WINE TAX -- REIMBURSEMENT OF. The federal wine tax is a liquor tax for the purpose of applying Rule195. Liquor taxes are not deductible from the measure of the B&O tax even by a party who only stores wine for the maker of the wine and is reimbursed by the maker for the tax.

RETAIL SALES TAX -- B&O TAX MEASURE -- MUNICIPAL TAXES -- CELLULAR PHONE SERVICE. Receipts attributed to municipal taxes imposed upon cellular phone companies and separately stated on their invoices were properly included in the gross proceeds of sales from providing telephone service in measuring Business & Occupation and retail sales taxes.

B&O TAX -- MEASURE OF TAX.A taxpayer may not treat collected retail sales tax as a reduction of the selling price for the purpose of the measure of the tax.The B&O tax is imposed on the business and cannot be charged to the buyer.

DEDUCTIBILITY OF AIRCRAFT FUEL TAX.A fuel distributor may deduct from its gross income, for B&O tax purposes, the amounts it collected from customers for the state aircraft fuel taxes, similar to how retailers deduct collected retail sales taxes.

PUBLIC UTILITY TAX – MUNICIPAL TAXES – DEDUCTIONS.Public utility taxes imposed by a municipality and received by the municipality’s public utility are part of the gross income of the utility and are included in the measure of the state’s public utility tax.

RETAILING B&O TAX – GROSS PROCEEDS OF SALES -- DEDUCTION -- FEDERAL AVIATION FUEL AND LEAKING UNDERGROUND STORAGE TANK (“LUST”) TAXES.Taxes received by a taxpayer as collecting agent and paid directly to the federal government are deductible under Rule 195.On the other hand, where the taxes are primarily imposed upon the taxpayer, the taxpayer will not be entitled to deduct the taxes because in such case the taxes are simply a cost of doing business.Federal aviation fuel and LUST taxes are imposed on the taxpayer and, as such, are not deductible for B&O tax purposes.

RETAILING B&O TAX – GROSS PROCEEDS OF SALES -- DEDUCTION -- FEDERAL AVIATION FUEL AND LEAKING UNDERGROUND STORAGE TANK (“LUST”) TAXES.Taxes received by a taxpayer as collecting agent and paid directly to the federal government are deductible under Rule 195.On the other hand, where the taxes are primarily imposed upon the taxpayer, the taxpayer will not be entitled to deduct the taxes because in such case the taxes are simply a cost of doing business.Federal aviation fuel and LUST taxes are imposed on the taxpayer and, as such, are not deductible for B&O tax purposes.

PUBLIC UTILITY TAX ON FUEL TRANSFER FEES CHARGED TO CUSTOMERS - Rule 195 explains the circumstances under which taxes may be deducted from the gross amount reported as the measure of tax under PUT, and lists examples of specific deductible and nondeductible taxes.The rule expressly provides: “License and regulatory fees are not deductible.”

B&O TAX -- MEASURE OF TAX ON EXCHANGE AGREEMENTS -- GROSS PROCEEDS OF SALE -- COMPARABLE SALES -- PLATTS -- SUPERFUND TAXES.When determining the value of products received the Department uses Platts (an industry price reporting service) that includes in its published prices the Superfund Tax.The Superfund Tax is not deductible from the stated value.

REFUSE AND SOLID WASTE COLLECTION TAX – MEASURE OF TAX.A city imposed solid waste tax that a waste disposal business collects from its customers is a cost of doing business that is not excludable from “gross income of the business” and measure of the Refuse and Solid Waste Collection Tax.

RCW 82.08.190 AND .195: RETAIL SALES TAX – RETAILING B&O TAX – BUNDLED TRANSACTION –SALE OF DINNER AND MUSICAL/DRAMA SHOW – NON-ITEMIZED ADMISSION CHARGE. The sale of dinner (generally subject to sales tax) and a musical/drama show (generally not subject to sales tax) for one non-itemized admission charge is a bundled transaction subject to retail sales tax because the meal is not essential or indispensible to the viewing of the performance.

RULE 195; RCW 82.08.150; RCW 82.08.010(1)(a)(i); RCW 66.24.630(4)(a): SPIRITS SALES TAX – 17% LICENSE ISSUANCE FEE. The license issuance fee imposed on the seller is an expense of the seller and cannot be deducted from the measure of spirits sales tax.

SALESTAX -- SELLING PRICE -- SUPERFUND CHARGE. The superfund charge of $0.002 per gallon of petroleum products is subject to sales tax. It is not a tax on the consumer.