Rule making agenda

This rule explains deductions and exemptions from Washington business and occupation tax, retail sales tax, and use tax as applied to artistic and cultural organizations.

The Department anticipates a new rule to explain the taxability of athletic or fitness facilities under House Bill 1550, Chapter 169, Laws of 2015.

Effective January 1, 2022, Chapter 82.87 RCW imposes an excise tax on sales or exchanges of long-term capital assets. This proposed rule seeks to clarify administrative aspects of the excise tax on capital gains such as proper filing procedures and penalties related to this excise tax.

In March of 2022, the Douglas County Superior Court ruled in Quinn v. State of Washington that the excise tax on capital gains does not meet state constitutional requirements and, therefore, is unconstitutional and invalid. The State has appealed the ruling to the Washington Supreme Court. While the appeal is pending, the Department will continue to provide guidance, such as this rule, to the public regarding the tax as a courtesy. This rule will apply only if the tax is ruled constitutional and valid by a court of final jurisdiction.

WAC 458-20-221 describes the procedure for collection of use tax by retailers and selling agents.

The department is amending this rule to incorporate 2020 legislation, Substitute House Bill 2246. The purpose of this legislation was to reorganize laws related to environmental health without making any substantive policy changes, specifically, adding a new title to the Revised Code of Washington to be codified as Title 70A RCW. The amendments proposed for this rule also include those to remove outdated language and for general readability purposes.

WAC 458-20-15503 provides a structured approach for determining tax liability for digital products and digital codes.

This rule discusses the business and occupation (B&O) tax and retail sales and use tax reporting responsibilities of persons who engage in duplicating activities, or who provide mailing bureau or direct mail services in Washington.

WAC 458-61A-XXX Exemption for sale of self-help housing – this rule will provide details on a new exemption from the real estate excise tax for certain sales of self-help housing to low-income households.

Exemptions from retail sales and use taxes for qualifying electric generating systems using renewable energy sources.

This rule provides guidelines for determining if food or food ingredients qualify for the retail sales tax and use tax exemptions under RCW 82.08.0293 and 82.12.0293 (collectively referred to in this rule as the "exemptions").

WAC 458-61A-XXXX New rule on Graduated REET – this rule will provide details on how new graduated tax rates for the real estate excise tax apply to real estate transactions.

WAC 458-20-252 provides detailed information on the Hazardous substance tax.

WAC 458-16-266 provides examples to be used as a general guide for applying a property tax exemption for real property with the purpose of low-income household development.

This rule explains the application of business and occupation (B&O), retail sales, and use taxes to persons operating hospitals as defined in RCW 70.41.020; nursing homes as defined in RCW 18.51.010; assisted living facilities as defined in RCW 18.20.020; adult family homes as defined in RCW 70.128.010; and similar health care facilities.

WAC 458-20-193 explains the application of the business and occupation (B&O) and retail sales taxes to interstate sales of tangible personal property.

The Department intends to modify WAC 458-29A-200 to clarify the amount of contract rent subject to leasehold excise tax when the rent includes payment for both the leasehold interest as well as a concession or other right.

This rule provides an overview of the administrative collection remedies and procedures available to the department to collect unpaid and overdue tax liabilities. This proposal amends WAC 458-20-217 to include the heavy equipment rental tax (Title 82.51 RCW).

WAC 458-20-13601 explains the retail sales and use tax exemptions provided by RCW 82.08.02565 and 82.12.02565 for sales to or use by manufacturers or processors for hire of machinery and equipment (M&E) used directly in a manufacturing operation or research and development operation. This rule explains the requirements that must be met to substantiate a claim of exemption.

This rule explains the application of the business and occupation (B&O), retail sales, and use taxes to manufacturers. It identifies the special tax classifications and rates that apply to specific manufacturing activities. The law provides a retail sales and use tax exemption for certain machinery and equipment (M&E) used by manufacturers.

This rule provides tax-reporting information for persons making sales of medical products. It also provides information about the retail sales tax and use tax exemptions available for the sale and use of certain medical products for humans.

WAC 458-61A-211 explains the circumstances under which the real estate excise tax does not apply to a transaction because it is a mere change in identity or form of an entity that holds real property.

WAC 458-20-27901 is a new rule that will provide information on sales and use tax exemptions and other tax benefits related to alternative fueled vehicles.

The Department plans to amend WAC 458-61A-214, which describes the application of the real estate excise tax in transfers involving a nominee. The proposed amendments are intended to resolve an existing conflict within the rule, specifically by replacing the example in WAC 458-61A-214(5)(b) with a new one. Presently, the example in subsection (5)(b) of the rule is in conflict with the exemption requirements described in subsection (3) of the rule. The Department is also proposing several other amendments to the rule in order to improve the rule’s clarity and usefulness.

WAC 458-20-169 describes the most common B&O, retail sales, and use tax considerations relevant to nonprofit organizations.

WAC 458-14-127 explains the authority by which boards of equalization may reconvene to hear taxpayer requests or appeals concerning property tax assessments in the current assessment year.

WAC 458-19-085 explains the differences between the types of property tax refunds authorized under chapters 84.68 and 84.69, the procedures related to the refunds, and the effect the refunds have on levy limits and the levy setting process in general.

WAC 458-18-210 describes the procedure for refunds of certain property taxes.

WAC 458-16A-100 contains definitions of the terms used for the senior citizen, disabled person, and one hundred percent disabled veteran exemption from property taxes. The definitions apply to the senior citizen, disabled person, and one hundred percent disabled veteran exemption contained in sections RCW 84.36.381 through 84.36.389 unless the context clearly requires otherwise.

WAC 458-16A-135 explains when and how a senior citizen, disabled person, or one hundred percent disabled veteran may apply for a property tax exemption on that person's principal residence. RCW 84.36.381 through 84.36.389.

WAC 458-16A-120 describes how an assessor determines a claimant's combined disposable income.

WAC 458-20-19402 explains the apportionment method for businesses engaged in apportionable activities and that have nexus with Washington for business and occupation (B&O) tax liability incurred after May 31, 2010.

The Department is considering updating this rule for a number of reasons, including: a) incorporating existing provisions for sourcing sales of tangible personal property found in WAC 458-20-193(Part 2), b) incorporating provisions and examples that clarify the Department’s existing historical policies for use tax sourcing, c) reorganizing and reformatting, d) clarifying existing provisions and examples in the rule to ensure the Department’s existing historical policies are clearly represented, e) retitling the rule to better represent the content and scope of the rule, and f) clarifying or incorporating any other relevant or related information based on external stakeholder comments.

WAC 458-19-550 explains how the state property tax levy rate is determined, how the department adjusts the previous year's apportionment because of changes and errors in taxable values reported to the department after October 1 of the preceding year, and how the limit factor set forth in RCW 84.55.010 is applied to the state levy.

WAC 458-20-233 addresses the tax liability of medical and hospital service bureaus and associations and similar health care organizations.

The department is amending this rule to incorporate 2020 legislation, Substitute House Bill 2246. The purpose of this legislation was to reorganize laws related to environmental health without making any substantive policy changes, specifically, adding a new title to the Revised Code of Washington to be codified as Title 70A RCW. The amendments proposed for this rule also include those to remove outdated language and for general readability purposes.

WAC 458-20-13501 explains the application of the business and occupation (B&O), public utility, retail sales, and use taxes to persons performing activities associated with timber harvest operations. This rule explains how the public utility tax deduction provided by RCW 82.16.050 for the transportation of commodities to an export facility applies to the transportation of logs. It also explains how the B&O tax exemption provided by RCW 82.04.333 for small timber harvesters applies.

The Department intends to update this rule to ensure consistency with statutory language. The Department is soliciting public comments from the public on possible rule making concerning the provision in WAC 458-20-181 that states, “Charges made for drydocking are not subject to the retail sales tax provided such charges are shown as an item separate from charges made for repairing.” This provision may conflict with the definition of “selling price” in RCW 82.08.010. The Department also intends to amend the rule to accurately reflect current practices of drydocking and practices regarding vessel haul out and vessel repair.

This rule will provide information about the taxability and surcharge for select advanced computing businesses as described in RCW 82.04.299.  

The Department intends to create a rule to clarify eligibility requirements and program administration standards, including application submission procedures. The Department is soliciting public comments on possible rule making considerations relating to a number of topics including, but not limited to: proof of identification, proof of state residency, proof of income, verification of qualifying children, determination of application due dates of original and amended claims, and preferred communication channels.