WAC 178

Value of Equipment Used Temporarily in Washington

Appliances Used for Demo Cancelled 07/17/02 Appliances Used for Demonstration--This directive explains under what circumstances use tax applies to appliances used for demonstration purposes. This directive is no longer needed as this issue is sufficiently addressed in ETA 332.12.178.

Cancelled 6/05/2002 - This document is incorrect when stating that the measure of use tax for property acquired by purchase is normally the price paid by the buyer less any freight charges separately identified in the contract of sale or sales invoice. The definition of “value of the article used” in RCW 82.12.010 was revised by chapter 367, Laws of 2002, to include the amount of any freight, delivery, or other like transportation charge paid or given by the buyer to the seller.

Deferred Sales Tax Cancelled 06/05/02

Construction Tax Guide

Commercial Fishing Guide

Self-Service Storage Businesses

"Sale at retail," "retail sale."

"Value proceeding or accruing."

Definition - "Consumer"

Value of products, how determined

Use Tax

Definitions.

Use Tax imposed.

Use Tax explains who is responsible for remitting use tax, and when and how to remit the tax. Rule 178 has been revised to delete verbiage in subsection (6) that is inaccurate because the example is no longer valid. Chapter 13 Laws of 2013 2nd Special Session made the example invalid when it created a use tax exemption for items less than ten thousand dollars, purchased …, from a nonprofit organization or a library. While this specific exemption is scheduled to expire July 1, 2017, the example in subsection (6) could still be misleading and thus it has been removed.

Use tax.

Use Tax WAC 458-20-178 (Rule 178) Use tax. This rule explains who is responsible for remitting use tax, and when and how to remit the tax. It also explains the imposition of use tax as it applies to the use of tangible personal property within Washington when the property was not subject to retail sales tax at the time of acquisition.

RENTAL VALUE OF A ONE-USE ARTICLE Revised 2/2/09 See ETA 3013.2009

USE TAX IN RELATION TO USE OF PRIVATE AIRPLANES FOR BUSINESS WITHIN AND WITHOUT THE STATE Revised 2/2/09 See ETA 3077.2009

DETERMINATION OF MINIMUM VALUE OF TANGIBLE PERSONAL PROPERTY Revised 2/2/09 See ETA 3029.2009

Intervening use

Intervening use. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

Rental value of a one-use article

Retail sales tax on items used in meat processing

Determination of minimum value of tangible personal property

Use tax modification to aircraft dealers

Form oil purchased by building contractors

Purchase of billboards: real property or tangible personal property

Use tax on property acquired by inheritance

Use Tax on Property Acquired by Inheritance ETA 3066 and 3069 recite language from RCW 82.12.020. The Department has updated this language to reflect the changes to this statute by Section 206 of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143).

Public Road Construction Materials – Measure of Tax

Use tax in relation to use of private airplanes for business within and without the state

Presumption of use within Washington when resident purchases property out of state

Deferred sales tax

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

INVENTORY DONATED TO CHARITY SUBJECT TO USE TAX - This document explains that a person donating inventory items to charitable organizations is subject to the use tax. This information is no longer correct. Chapter 182, Laws of 1998, provided a use tax exemption for the donation of inventory items to nonprofit charitable organizations. Cancelled by ETA 2003-3s 02/15/2001

Taxable transactions by aircraft dealers

Taxable Transactions by Aircraft Dealers The Department of Revenue has revised Excise Tax Advisory (ETA) 3151. This advisory explains how certain transactions by aircraft dealers are taxable. Example 4 of the ETA incorrectly stated that the portion of monthly rental charges attributable to out-of-state use by the lessee can be deducted from the measure of tax. This information is out of date and incorrect.

Sourcing and Attribution of Income on Leases and Rentals of Tangible Personal Property This ETA explains the business and occupation (B&O) and retail sales tax responsibilities of a seller (lessor) leasing tangible personal property to a consumer (lessee). The ETA clarifies that the lease of tangible personal property to a consumer is a retail sale subject to retailing B&O tax and retail sales tax unless a specific exemption applies; the measure upon which theses taxes are due; and how these taxes are sourced and attributed under Washington law.

Use Tax Liability for Lessees on Leased Tangible Personal Property This ETA explains a lessee’s use tax payment responsibility when a lessee brings leased tangible personal property into Washington from outside the state. The ETA clarifies that lessees are responsible for paying Washington’s use tax on the value of the article used unless a specific exemption or credit applies.

USE TAX MODIFICATION TO AIRCRAFT DEALERS Revised 2/2/09 See ETA 3044.2009

TAXABLE TRANSACTIONS BY AIRCRAFT DEALERS Revised 2/2/09 See ETA 3151.2009

USE TAX ON DISPLAY MERCHANDISE Revised 2/2/09 See ETA 3005.2009

USE TAX ON PRIVATE AUTOMOBILES ACQUIRED WHILE A NONRESIDENT - Cancelled effective December 29, 2006 This ETA explains what “private automobiles” means for purposes of the use tax exemption provided by RCW 82.12.0251 (cited in the ETA as RCW 82.12.030(1)). This information is out of date as the term “private automobiles” was removed when the statute was subsequently revised.

USE TAX IMPOSED WHERE PROPERTY NOT EXCLUSIVELY HELD FOR RESALE Revised 2/2/09 See ETA 3005.2009

USE TAX ON PROPERTY ACQUIRED BY INHERITANCE Revised 2/2/09 See ETA 3069.2009

PRESUMPTION OF USE WITHIN WASHINGTON WHEN RESIDENT PURCHASES PROPERTY OUT OF STATE Revised 2/2/09 See ETA 3079.2009

USE TAX APPLIED TO MANUFACTURER'S USE OF GOVERNMENT-OWNED TOOLING. The information in this document is incorrect due to subsequent legislation. Explains that a manufacturer of tooling is subject to use tax even if the government (presumably the federal government) owns the tooling. Incomplete as it does not address the measure of tax in what appears to be a bailment situation, nor does it recognize the M&E implications for tooling used in a manufacturing operation. This information is incorrect due to subsequent legislation. Cancelled by ETA 2003 06/30/99.

SALES OR USE TAX APPLICABLE TO ITEMS BOTH LEASED AND USED FOR PERSONAL USE Cancelled effective June 29, 2007. There is no need for this document as this issue is a straight-forward application of law and is addressed in multiple WA Tax Decisions (WTDs) and ETA 356.12.211.

MEANING OF "RESALE... IN REGULAR COURSE OF BUSINESS" Revised 2/2/09 See ETA 3005.2009

TAX LIABILITY ON MATERIALS PURCHASED BY CONTRACTORS IN IDAHO FOR USE IN WASHINGTON - This document explains that Idaho vendors are not permitted to accept resale certificates from Washington contractors because under Idaho law all construction contractors are defined as consumers of construction materials. The document further provides that the construction contractor can avoid the Idaho tax only by taking delivery of the materials outside Idaho.

USE TAX IMPOSED ON THOSE USING PROPERTY WHICH THEY ARE HOLDING FOR SALE Revised 2/2/09 See ETA 3005.2009]

USE TAX AND GOODS DEMONSTRATED IN THE PROCESS OF SALE Revised 2/2/09 See ETA 3005.2009

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

Use Tax Obligations of Amusement and Recreation Businesses

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

B&O Tax Credit Reinstated for Contributors to Washington Filmworks

King County Rental Car Tax to be Reduced by Two Percent

WashingtonFilmWorks Contributors B&O Tax Credit

WashingtonFilmWorks Contributors B&O Tax Credit - Modification

Use Tax Reminders for Businesses

Use Tax Reminder for Architects

Purchase of Server Equipment and Power Infrastructure for Use in Eligible Data Centers - Sales/Use Tax Exemption

B&O Tax Credit Reinstated for Contributors to Washington Filmworks

Update: Important Information on Use Tax

Use Tax Obligation of Accountants

Certain Taxpayers to Pay Use Tax Directly to the Department of Revenue

Tax Application Change on the Transfer of Used Park Model Trailers

Dental Industry Update

Use Tax Obligation of Architects

Important Information on Use Tax

King County Rental Car Tax to be Reduced by Two Percent

Use Tax Obligations of Providers of Business Services

WashingtonFilmWorks Contributors B&O Tax Credit - Modification

Car Rental Tax Still Due as of 1/1/2000 Tax on Car Rentals Unaffected by Initiative 695

Vessel Deconstruction – Sales & Use Tax Exemption

Taxability of Sales of Explosives

Use Tax Obligation of Computer-Related Businesses

Legislative Change to Use Tax

Vehicle Sales Tax and Use Tax Requirements for Persons in the Military Services--Revision of Special Notice Issued 2/28/95

Farm Worker Drinking Water Special Notice

Use Tax Reminder for Accountants

Use Tax on Out-of-State Repairs

Tax Incentives to Reduce Agricultural Burning

Use Tax Obligations of Advertising Agencies

USE TAX; TRAVEL AGENCY; CONSUMABLE ITEMS; TRAVEL PUBLICATIONS. A travel agency is subject to use tax upon the use of travel magazines, trade journals, the Official Airlines Guide and promotional materials where retail sales tax was not paid when the items were acquired. Where a seller has not collected the full amount of the retail sales tax, the Department may collect the tax from the buyer. RCW 82.08.050

USE TAX -- YACHT -- INTERVENING USE -- DEMONSTRATION. Use tax upheld on yacht used for showing and demonstration sails. Only limited use for demonstration purposes is exempt from use tax. ETB 332.12.178; ETB 61.12.178 distinguished.

USE TAX -- USE IN THIS STATE -- BURDEN OF PROOF -- PRESUMPTIONS. Taxpayer is not required to prove that property purchased outside this state for use outside this state has never been used in this state absent facts supporting presumptive use of the property in this state. Where facts support presumptive use in this state and the taxpayer is unable to overcome presumption of instate use, the state may impose use tax without actually observing such use.

USE TAX -- OUT-OF-STATE USE -- INSTATE REPAIR -- INSTATE STORAGE. Washington taxpayer operating amusement devices in both Oregon and Washington does not incur use tax liability in respect to Oregon-based amusement devices merely by sending them here for repair or storage if they are later returned to Oregon without actual use in Washington.

USE TAX -- APPLICATION FOR WAIVER -- AUTOMOBILE ACQUIRED FROM THIEF WHO PURCHASED AUTO WITH STOLEN MONEY -- TRANSFER OF AUTO TO PERSON WHOSE MONEY WAS STOLEN -- PURCHASE AT RETAIL -- CASUAL OR ISOLATED SALE -- VALUABLE CONSIDERATION. Where thief used stolen money to buy an auto out of state and later transferred auto to crime victim, application for waiver of use tax by crime victim denied. Statutory definition of "sale" is satisfied because there was a transfer of possession and ownership for a valuable consideration.

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.

USE TAX -- ENGINEERING SERVICES PERFORMED AFTER EXECUTION OF WRITTEN CONSTRUCTION CONTRACT. Engineering services performed after execution of written construction contract, although 99.8% performed in Idaho, were subject to sales or use tax because rendered in respect to construction upon real estate in Washington.

USE TAX -- ENGINEERING SERVICES PERFORMED BEFORE EXECUTION OF WRITTEN CONSTRUCTION CONTRACT. Engineering services performed before execution of written construction contract are not rendered in respect to construction upon real estate and, hence, are not subject to sales or use tax.

USE TAX -- SEPARATE ENGINEERING AND CONSTRUCTION CONTRACTS. Separate contracts for engineering and constructing power plant treated as one contract in substance for sales and use tax purposes.

USE TAX -- REGULATIONS -- ULTRA VIRES ACTION. PROVISIONS OF WAC 458-20-178 AND 458-20-211 were ultra vires, where they attempted to change the plain meaning of RCW 82.04.050 exempting leased equipment purchased for resale from the use tax. Nature of Action: A crane service company sought a refund for use taxes assessed for equipment leased to contractors.

STATUTORY CONSTRUCTION -- "THEREWITH." The term "therewith" as used in RCW 82.12.0254 has the common and ordinary meaning of "together with" or "as part of".

USE TAX -- WATERCRAFT USED IN INTERSTATE COMMERCE. Vessels used to haul or tow other vessels laden with goods moving in interstate commerce are included within the scope statutory use tax exemption.

USE TAX -- STORAGE PREPARATORY TO USE -- WATERCRAFT. The storage of property in this state, preparatory to actual use with this state, itself constitutes "use" under statutory definition, but only if the subsequent actual use is intrastate rather than tax exempt interstate use of watercraft.

USE TAX; MOTOR HOME: VALUE OF ARTICLE. Use tax due on motor home when first brought into state by Washington resident; not exempt because taxpayer intended to sell the vehicle and only stored vehicle at his residence until he could find a buyer. Retail selling price of vehicle held to be value of motor home for use tax purposes; amount not reduced because purchased in Indiana two months prior to entering Washington.

USE TAX -- RADIATION BADGES. Use of radiation detection service by nursing home where charge is measured by amount of film used is not subject to sales tax because the purchaser is buying the detection service, not tangible personal property in the form of the film.

SALES TAX -- USE TAX -- DENTAL PRACTICE -- PATIENT FILES -- PATIENT RECORDS -- SALE OF. The sale of patient files and records by one dentist to another as part of the purchase of a dental practice is not a purchase of tangible personal property subject to sales or use tax. (Det. 90-139 overruled.)

USE TAX EXEMPTION -- CHEMICAL SPRAYS OR WASH: Flotation salts such as pear float/sodium silicate prevent fungal decay of harvested fruit and thus are exempt from sales/use tax for persons who purchase them for post-harvest treatment of fruit.

This determination has been overruled in part by Det. No. 91-305S, 11 WTD281 (1991)

USE TAX EXEMPTION -- COMMERCIAL FERTILIZERS. The legislature intended to exempt from sales/use tax all recognized commercial fertilizers which are purchased and first used as such by agricultural producers covered by RCW 82.04.330. Rule 122 is construed to exempt fertilizers applied by spraying plants directly as well as those fertilizers added to the soil.

USE TAX -- INTERVENING USE. When taxpayer first uses a substance for purposes other than one which is tax exempt, such use is intervening use and negates the exemption. The use tax test is first use, not primary use. An exemption in a tax statute will be strictly construed in favor of taxation. Accord: Det. 87-298, 4 WTD 87 (1987), Budget Rent-a-Car vs. Dept. of Rev., 81 Wn.2d 171, 174 (1972).

LEASEBACK -- SUBSTANCE OVER FORM -- 93% USAGE BY THE OWNER. Where the lessor/owner executed a lease and leaseback agreement with a leasing company which allowed the leasing company to pay an unreasonably low rental rate for the use of the airplane, and the lessor/owner eventually subleased the airplane for 93% of the plane's total usage, the substance of the transaction was found to be a purchase of the airplane for consumption by the lessor/owner.

LEASEBACK -- INTERVENING USE -- ORGANIZATIONAL & PROCEDURAL STRUCTURE -- PREFERENTIAL TREATMENT TO OWNER. Where the lessor/owner attempted to execute a lease and leaseback agreement with a leasing company but paid a substantially lower rate than the general public for the use of the airplane, intervening use had occurred and the use tax applied.

SALES TAX -- USE TAX -- JANITORIAL SERVICES -- CLEANING AGENTS. Cleaning agents consumed in the course of cleaning buildings or structures are not resold to the customer. The provider of the cleaning service owes sales or use tax on the cleaning agents.

USE TAX -- FILTER -- USE AS A CONSUMER -- TESTING -- DEFECTIVE ITEM. When a filter ordered by taxpayer was never actually purchased or used for its intended purchase because it was unable to perform properly, no use tax is due.

MOTORHOME. A former employee of an RV dealer was liable for retail sales tax on the purchase of motorhome from the dealer. Earlier demonstration use by a taxpayer as an employee of the dealer under the dealer's direction did not constitute use by the taxpayer, but by the dealer.

USE TAX -- WITHDRAWAL FROM INVENTORY -- REGULAR COURSE OF BUSINESS -- TRADE FOR OWN USE. Use tax is due when an item is withdrawn from inventory by a taxpayer to be traded to another business for an item to be used by the taxpayer rather than put into inventory. The tax is due on the removal of the item from inventory, because its removal is not for the purpose of "resale in the regular course of business." Accord: ETB 482. See also Det 86-251 1 WTD 167 (1986), 87-036 2 WTD 183 (1987), Det 87-067 2 WTD 331 (1987), Det 88-032 5 WTD 077 (1988).

USE TAX -- B&O TAX -- TOOLING -- COMMERCIAL OR INDUSTRIAL USE. Tooling made by a manufacturer who uses it to make airplane parts is subject to use tax and Manufacturing B&O tax.

USE TAX -- EXEMPTION -- PRIVATE AUTOMOBILE -- FIFTH WHEEL TRAILER. Taxpayers who acquired a fifth wheel trailer ninety days prior to entering Washington not entitled to exemption as private automobile.

MILITARY EXEMPTION -- USE TAX -- BOAT -- HOUSEHOLD ITEMS -- PERSONAL EFFECTS. A non-resident military person stationed in Washington is not exempt from the sales and use tax unless he or she fits within the statutory exemptions provided. A boat is not with the exemption contained in RCW 82.12.0251. The definition in WAC 458-12-270 of household items and personal effects for the purposes of the property tax is equally applicable to the use tax. A boat is not a household item or a personal effect. Accord: Det. 88-432, 7 WTD 039 (1988).

USE TAX -- NONRESIDENT EXEMPTION -- VEHICLE NOT REQUIRED TO BE REGISTERED IN THIS STATE. The Rule 178(7)(b) exemption from the use tax for motor vehicles operated by a nonresident does not apply to a vehicle that is required to be registered in this state. WAC 308-99-040(5) provides that a person employed here who maintains a temporary residence in this state for more than six months in a continuous twelve-month period is a resident and required to register the vehicle in Washington.

USE TAX -- EXEMPTION -- NONRESIDENT -- RESIDENCE -- DOMICILE. The Department recognizes a distinction between "residence" and "domicile." Thus, various use tax exemptions are available to nonresidents, but are not available to persons residing in Washington even though they may be domiciled elsewhere. A person who lives in both Alaska and Washington is not a nonresident of Washington for use tax purposes. Accord: Det. 87-174, 3 WTD 174 (1987).

DEFERRED SALES TAX -- USE TAX -- B&O TAX --ADVERTISING AGENCY -- BROCHURES. Advertising agencies are not liable for deferred sales tax or use tax on brochures when they purchase same from an unregistered, out-of-state printer as an agent on behalf of a Washington client and the brochures are shipped directly from the printer to the client. The commission or mark-up for such purchasing service, however, is Service B&O taxable to the advertising agency.

RETAIL SALES TAX -- USE TAX -- WATER VESSEL -- CHARTER WITH CREW. The purchase of a vessel to be used as a charter with a crew is not a purchase for resale that is exempt from the retail sales tax. When no sales tax was paid on purchase, the use tax id due at the time of first use, which was either the storage or when the first repairs were made, since both were preparatory to actual use.

HYDRATED LIME -- POST-HARVEST TREATMENT OF FRUIT -- SALES AND USE TAXES -- EXEMPTION. The purchase of hydrated lime when first used in cold storage to prevent carbon dioxide injury to fruit, including scald or decay, is exempt from sales and use taxes as a post-harvest treatment of the fruit. (This determination overrules the decision in Det. 90-386, 10 WTD 336 (1990), that the purchase of hydrated lime was subject to retail sales tax.)

USE TAX -- BUSINESS VEHICLE -- EXEMPTION -- NOT REQUIRED TO BE LICENSED. An out-of-state business is not liable for use tax on vehicle properly licensed out-of-state and not required to be licensed in Washington.

USE AND/OR DEFERRED SALES TAX -- BAILED EQUIPMENT -- DOMINION AND CONTROL -- AUTHORIZED USE. A contractor is not subject to use tax as a bailee on government-owned equipment unless it has dominion and control over the equipment and actually subsequently uses that equipment. Where the contractor has specific authorization to use the equipment in its contract, actual subsequent use will be presumed.

USE TAX -- VALUE OF ARTICLES USED -- TRAINING TAPES AND MATERIALS -- RETAIL COST. Taxpayer purchasing training programs including video tapes, practice models and molds, and printed materials is subject to use tax on the full retail price paid for the programs.

USE TAX -- SEEDLINGS -- REFORESTATION. Seedlings in a reforestation program are intended to permanently replace trees which have been harvested from the freehold. Once planted, these seedlings grow into trees and thereafter become part of the realty on which they grow. Because they become real property, they can no longer be considered tangible personal property held for resale. Accord: ETB 369.04.172.

USE TAX -- SOVEREIGN IMMUNITY OF THE UNITED STATES -- POWER TO TAX BENEFITS CONFERRED BY FEDERAL GOVERNMENT ON CITIZENS. States have the authority to tax benefits conferred upon individual taxpayers by the federal government, provided the incidence of the tax does not fall upon the United States, its instrumentalities or agents. The assessment of use tax on the use of a vehicle transferred to a taxpayer by the federal government in partial satisfaction of a claim does not abridge federal sovereignty. ACCORD: Washington v. U.S., 460 U.S. 536 (1983); Graves v.

USE TAX -- TANGIBLE PERSONAL PROPERTY ACQUIRED AT RETAIL -- BENEFITS UNDER FEDERAL EMPLOYEES' COMPENSATION ACT. Taxpayer's use of a specially equipped vehicle furnished by the federal government in partial satisfaction of federal workman's' compensation act claim is subject to use tax. The transfer of the vehicle to a taxpayer for use as a consumer in partial satisfaction of a legal claim constitutes a retail sale.

USE TAX -- DREDGING ON THE BORDER -- APPORTIONMENT -- SUPPLIES CONSUMED ON THE JOB. Where a taxpayer performed dredging services . . . along the Washington and Oregon border, apportionment of supplies actually consumed during the dredging activity was allowed. No apportionment, however, is allowed on repair parts.

USE TAX -- VALUE OF ARTICLE USED -- ACQUIRED OUT OF STATE -- FAIR MARKET VALUE -- PERSONAL PROPERTY TAX SCHEDULES. Equipment acquired outside the state and subsequently used in the state is subject to use tax on the fair market value of the equipment at time of first use within this state. Absent objective evidence supporting a different fair market value of equipment brought into this state, valuation based on personal property tax schedules sustained. Accord: Det.90-180 & 89-375; Dist. 87-105, & 86-182.

USE TAX -- EQUIPMENT ACQUIRED OUT OF STATE -- PARTS USED IN REPAIRS -- EQUIPMENT USED IN STATE. Use tax sustained on the value of repair parts installed outside of Washington into equipment that was later brought into the state for use on a construction contract. Accord: Det.No.79-78 & 89-264.

USE TAX -- TANGIBLE PERSONAL PROPERTY -- INTERSTATE COMMERCE -- PROMOTIONAL BROCHURES. Sales brochures constitute tangible personal property. If used in connection with operating as a carrier in interstate and foreign commerce, their purchase and delivery here is tax exempt under RCW 82.08.0261. The provision in the statutory exemption of RCW 82.08.0261 which makes interstate carrier property taxable under use tax when it is put to actual use here, means that the use tax applies if the property is used here for its ultimate intended purpose.

USE TAX -- NONRESIDENTS. The use tax applies to any use within the state of Washington. The use tax may not be apportioned. The exemption for nonresidents who use motor vehicles within the state is not available to persons who are residents of this state. Accord: Det. No. 90-298, 11 WTD 67 (1990 ).

VESSEL REGISTRATION -- ULTRA VIRES ACTS. The Department's requirement that a vessel be moored on the Columbia River and registered in Washington to qualify for a use tax exemption were reasonable and within its authority for the proper enforcement of the tax.

USE TAX -- TEMPORARILY WITHIN THE STATE -- PROPERTY AND PERSON. In order to qualify for the exemption from use tax for the use of tangible personal property brought into the state by a nonresident while temporarily within the state, both the nonresident and the property must be temporarily within the state. A vessel moored in Washington a number of years was not exempt.

USE TAX -- DETERMINATION OF TRUE VALUE. Where the taxpayer purchases real and personal property in a single transaction, allocates the purchase price in an "arms length transaction," the value placed on the personal property is in excess of the assessed value for property tax purposes, and the value as determined by the Department's Revenue Officer was merely a projected estimate, the use tax will be imposed on the agreed purchase price. Partial Accord: Det. No. 90-298, 11 WTD 67 (1990).

USE TAX -- PROPERTY IN TRANSIT --TRANSPORTATION FINALLY ENDED -- BUSINESS USE. The provision in RCW 82.12.020 regarding the exemption from taxation of property in which the transportation has not finally ended refers to the taxation of property that is in transit from one location to another and is not stopped and used in this state. Property brought to Washington for use in conducting a business activity is properly subject to the use tax in Washington. Minnesota v. Blasius, 290 U.S. 1 (1933).

RETAILING B&O TAX -- USE TAX -- REPAIRS OF REAL PROPERTY FOR CONSUMERS. The repair of real property for consumers is an activity taxable as a retail sale. The use of property by the contractor in performing that function is subject to use tax, despite the fact that the repairs are a retail sale and subject to the retail sales tax.

SALES TAX -- USE TAX -- CATALOGS -- PHOTOGRAPHERS. The production of negatives and transparencies by a photographer for use in a retailer's catalog is a retail sale. Sales or use tax applies.

USE TAX -- CATALOGS -- WASHINGTON CUSTOMERS -- OUT-OF- STATE PRINTERS. Taxpayer is not liable for use tax on catalogs which its printer sends from out-of-state directly to customers in Washington. There is no use by the taxpayer in Washington. Sears v. Dept. of Revenue, 97 Wn.2d 260, 643 P.2d 884 (1982).

USE TAX -- SALES TAX -- LIABILITY -- PURCHASES FOR RESALE -- INTERVENING USE. Taxpayers are liable for sales or use tax on their purchases of chassis that are contributed to the chassis pool because taxpayers make intervening use of such chassis.

USE TAX -- REALTY -- TRADE FIXTURES -- LANDLORD-TENANT. Where the relationship between the annexor of personal property and the realty is landlord-tenant, the annexed property remains the tenant's personal property, no matter how firmly it may be attached to the landlord's realty, unless the lease agreement specifically provides that such items are to be considered as part of the real property and are to be left with the real property when the occupant vacates the premises.

USE TAX -- BAILMENT -- WHEN TAX LIABILITY ARISES -- TAX PAID BY PREVIOUS BAILEE. The tax liability of a bailee first arises when the person/bailee himself first uses the property even though an other person or previous bailee has used the property. However, if the property has been used by a previous bailee who has paid use tax upon the full original value of the article used, the present user/bailee is exempt from use tax.

USE TAX -- WINERY -- WINE SAMPLES -- DEFECTIVE BOTTLES -- MEASURE OF TAX. The measure of use tax on damaged or "off condition" bottles of wine used to pour samples at the tasting room of a winery is the retail selling price, if it can be determined, of such "off condition" bottles as opposed to the retail selling price of undamaged bottles of the same wine.

DEMONSTRATORS -- TRADE-IN DEDUCTION. A use tax trade-in deduction is properly available under WAC 458-20-247 if a taxpayer actually trades used demonstrators into inventory for newer demonstrators out of inventory, and therefore actually transfers its used demonstrators back into inventory before their ultimate sale. Trade-ins will not be imputed for purposes of the trade-in deduction, however, in those instances in which the taxpayer simply sells demonstrators to customers and brings newer demonstrators out of inventory to replace them.

USE TAX -- LEASED VEHICLES -- OUT-OF-STATE USAGE -- APPORTIONMENT. Taxpayer was found subject to use tax on leased vehicles only upon that portion of the lease payments attributable to mileage traveled within the state of Washington.

USE TAX -- MEASURE OF. The measure of use tax is the value of the article used. Such value is the consideration, including money and credits, paid to acquire the article. There is no provision for reducing that value when it is alleged that property traded in on the article acquired is worth less than the amount reflected in documents of sale. Partial Accord: Det. No. 92-156, 12 WTD 195 (1992).

SALES TAX -- USE TAX -- EXEMPTION -- RESALE INTERVENING USE. The purchase of tangible personal property for resale in the ordinary course of business, without intervening use, is not a retail sale. Intervening use by the purchaser, however, triggers deferred sales/use tax. Accord: Det. No. 87-298, 4 WTD 87, (1987); Det. No. 89-337, 8 WTD 59 (1989); Det No. 89-461, 11 WTD 21 (1989).

RETAIL SALES TAX -- USE TAX -- DIES -- INTERVENING USE. The taxpayer purchased and used dies to manufacture labels. The taxpayer "used" the dies to produce the labels before they were actually sold to the customer. Use tax found to be due, because the taxpayer's use of the dies before sale constituted intervening use.

RETAIL SALES TAX -- USE TAX -- DIES -- INTERVENING USE. The taxpayer purchased and used dies to manufacture labels. The taxpayer "used" the dies to produce the labels before they were actually sold to the customer. Use tax found to be due, because the taxpayer's use of the dies before sale constituted intervening use.

USE TAX -- EXEMPTION -- SWITCH ENGINES. Use tax is not due on switch engines or component parts of switch engines used primarily for conducting interstate and foreign commerce.

PURCHASE FOR RESALE -- INTERVENING USE. Use tax is owed on the purchase of two new cars ostensibly held for resale, where no sales tax was paid at the time of purchase, and where the purchaser made substantial intervening use of the cars by driving the cars.

USE TAX -- MOTOR VEHICLE -- NONRESIDENT -- EXEMPTION. A person who lived at a Washington address and received assorted services in his name at that address for a substantial portion of a two year period is a Washington resident. As such he is ineligible for a nonresident use tax exemption.

USE TAX -- EXEMPTION -- RESIDENCE -- ENTRY INTO WASHINGTON. A Washington resident claiming an exemption from use tax for a private automobile must prove both: 1) that the taxpayer was a bona fide resident of another state when the automobile was purchased and used; and 2) that such purchase and use occurred at least ninety days prior to the taxpayer's entry into Washington.

USE TAX -- EXEMPTIONS -- MOTOR VEHICLES AND TRAILERS -- ICC PERMIT -- SUBSTANTIAL USE -- INTERSTATE COMMERCE. The sales and use tax exemptions for the purchase and use of motor vehicles used in interstate commerce require: 1) the user hold an ICC permit, 2) the vehicle or trailer be used in substantial part in the ordinary course of the user's business for transporting persons or property for hire across the boundaries of the state, and 3) the fist use in Washington is actual use in conducting interstate or foreign commerce.

USE TAX -- EXEMPTIONS - COMPONENTS OF TRUCKS AND TRAILERS -- ICC PERMIT. The use tax exemptions for purchase of parts that become components of motor vehicles or trailers require: 1) the user hold an ICC permit authorizing transportation across the boundaries of the state and 2) the property must become a component part (i.e., attached to and an integral part of the motor vehicle or trailer).

USE TAX - DEMONSTRATORS - OUT-OF-STATE USE. If a demonstrator is not actually used as such in this state, it will not be subject to use tax even though a taxpayer's books of account may identify it as demonstrator.

USE TAX -- DEMONSTRATORS HELD FOR SALE -- SOLD AT DISCOUNT -- CARRIED ON BOOKS. Even though demonstrators are eventually sold to customers, they are not exempt of use tax when they are carried on the taxpayer's books of account as "demonstrators" or are discounted as used equipment when sold. Accord: ETB 332.12.178.

RST AND USE TAX - INGREDIENTS AND COMPONENTS - CONSECUTIVE INTERVENING USE - "DIRECT CONSUMPTION TEST".

RST AND USE TAX -- INGREDIENTS AND COMPONENTS -- STEEL MANUFACTURING -- REFRACTORY MATERIALS -- LIQUID OXYGEN -- LIMESTONE -- ALUMINUM. A retail sale or taxable use did not occur when liquid oxygen, refractory materials, limestone, and aluminum were consumed in the manufacturing of steel and became essential and intended constituents of the finished products, steel and/or slag.

USE TAX -- DEFERRED SALES TAX -- DEFINITION OF "USE" -- DEFINITION OF "SALE" -- DEPOSIT -- PROPERTY NEVER DELIVERED. Where a taxpayer simply pays a deposit for the purchase of tangible personal property and never receives the property, such deposit is not subject to use or deferred sales tax.

USE TAX -- GOVERNMENT PROPERTY -- BAILMENT. Bailment arises where taxpayer's employees have possession and exercise dominion and control over government-owned items in performing contract tasks. Use tax applies even if the government retains control over the taxpayer's conduct with regard to the use of such items after delivery and the taxpayer does not have exclusive possession.

USE TAX -- BAILMENT -- ITEMS ANNEXED TO REAL ESTATE -- FIXTURES. Use tax is levied only on the use or bailment of tangible personal property, not real property. The Department follows the common law rules for determining whether an item is realty or personalty. When an owner attaches an article to land, it is rebuttably presumed to have annexed it with the intent to enrich the freehold. Without evidence to the contrary, the presumption stands.

USE TAX -- BAILMENT -- MEASURE OF TAX. The measure of use tax for bailed articles is their reasonable rental. The reasonable rental is determined as nearly as possible by the rental price at the place of use of similar products of like quality and character. The tax is not measured by the full replacement cost of the items. During the contract period when the taxpayer has possession of the items only for one-third of the time, the measure of the tax is reduced or prorated by two-thirds.

USE TAX -- FARM -- PERSONAL PROPERTY -- SALE OF -- VALUATION. The "value of the article used" for use tax purposes is the consideration paid to a seller for tangible personal property. Where a farm was sold with farm equipment, an itemized closing statement signed by both buyer and seller, which attributed a particular dollar amount to the equipment, is persuasive evidence of the value of that equipment.

LEASE, RENTAL, OR BAILMENT -- DOMINION AND CONTROL -- CATERERS. In order to find a true lease, rental, or bailment, there must be a change in dominion and control over the property. When a caterer supplies plates, glasses, silverware, cooking equipment, linens and tents to his customers as part of his services, there is no change in actual or potential dominion and control over such items.

SALE AT RETAIL -- LEASE -- INTERVENING USE. A person who purchases or leases an article of tangible personal property for resale or lease in the regular course of business and also puts it to intervening use, must pay sales of use tax.

USE TAX -- EXEMPTIONS -- PRIMARY USE -- AIRCRAFT -- INTERSTATE COMMERCE. Aircraft primarily used by a private carrier to conduct interstate commerce by transporting property therein for hire are exempt from use tax.

USE TAX -- EXEMPTION -- MOTOR CARRIER TRAILER -- RENTAL OR LEASE. Persons buying trailers solely for the purpose of renting or leasing the same without an operator are making purchases for resale and are not required to pay retail sales tax to their vendors, and use tax is not applicable against the purchasers unless there is evidence of intervening use of the trailers by them. Cf. Det. Nos.

USE TAX -- MOTOR VEHICLE EXCISE TAX -- EXEMPTION -- NONRESIDENT -- DOMICILE. The term "resident" for use tax and MVET purposes is not synonymous with domicile. A person may have more than one residence or home for use tax and MVET purposes.

MOTOR VEHICLE EXCISE TAX (MVET) -- EXEMPTION -- RESIDENT. In general, Washington residents must license and pay MVET on the vehicles they operate in Washington. For vehicle license registration purposes, a resident is defined as a person who manifests an intent to live or be located in this state on more than a temporary or transient basis. The same definition is used to determine whether they are nonresidents for use tax exemption purposes.

USE TAX -- MOTOR VEHICLE EXCISE TAX -- EXEMPTION -- NONRESIDENT -- HOME OR DWELLING. Whether a person is a resident of this state, and not here on a temporary or transient basis, is fact specific.

USE TAX -- EXEMPTION -- NONRESIDENT. Individuals who are domiciled in another state, own a residence in this state, and claim a use tax exemption for their motor home must prove: 1) that they are nonresidents of this state; 2) that their motor home is licensed in the state where they are residents; and 3) that it is not required to be licensed in this state.

MANUFACTURING EQUIPMENT AND MACHINERY EXEMPTION -- LOGGING. Because logging is an extractive activity, not a manufacturing activity, equipment purchases to be used in logging operations are not eligible for exemption.

USE TAX -- EXEMPTION FOR PRIVATE MOTOR VEHICLES ACQUIRED IN ANOTHER STATE. A person who leased a private motor vehicle for more than two years in another state where he was a bona fide resident and then, while still a resident of the other state, exercised his right under the lease agreement to purchase that vehicle qualifies for the use tax exemption even if he purchased the vehicle less than 90 days prior to becoming a Washington resident.

CONSTRUCTIVE DELIVERY; USE TAX. Use tax is due if there is constructive delivery. Constructive delivery is deemed to have occurred when a product is held by the seller on behalf of the buyer, pending a buyer’s instructions for future delivery of the product.

USE TAX -- EXEMPTION -- RIDE-SHARING VEHICLES -- PARA TRANSIT VEHICLES -- WEIGHT LIMIT. The use tax exemption for ride-sharing vehicles used for transporting the elderly and the handicapped contained in RCW 82.12.0282 does not require that the vehicle weigh less than 10,000 pounds.

USE TAX – TRUCKS – INTERVENING USE. A taxpayer who purchased a tanker truck and used it in business prior to leasing the vehicle to a lessee is not entitled to a refund of the use tax it paid upon initially registering the truck in Washington because of its intervening use of the vehicle before the lease.

OREGON REVISED STATUTES 803.360 AND 860.355: USE TAX – PROPERLY REGISTERED. Persons who are not domiciled in Oregon may not, under Oregon law, register his or her motor vehicle in Oregon. Merely, using a friend’s Oregon address for the purpose of vehicle and voter registration does not establish a domicile in Oregon. Thus, persons who so register their motor vehicles in Oregon do not qualify for the RCW 82.12.0251 exemption from the use tax in Washington.

USE TAX – REQUIREMENTS FOR EXEMPTION: The requirements for the RCW 82.12.0251 exemption are threefold. Specifically, (1) the user must be a nonresident, (2) the vehicle must be registered or licensed in the state of the user’s residence, and (3) Washington registration of the vehicle must not be required. Det. No. 96-49, 16 WTD 177 (1996).

USE TAX – RESIDENCY. A person may be a resident for use tax and MVET purposes in more than one state. Det. No. 87-109, 2 WTD 463 (1987). It is not enough that a person intends to become a nonresident of Washington at a future date, but they must actually be a nonresident in order to qualify for the exemption from use tax under RCW 82.12.0251. Det. No. 87-68, 2 WTD 339 (1987) and WAC 458-20-178(7)(i). They must have completed the process of becoming a nonresident in order to be a nonresident in fact.

USE TAX -- ROCK USED IN LOGGING ROAD CONSTRUCTION. The measure of the use tax for the use of rock extracted by a road builder is the total cost of extraction, not merely the taxpayer’s costs.

USE TAX -- ROCK USED IN LOGGING ROAD CONSTRUCTION. When a taxpayer severs rock from the ground, the rock becomes tangible personal property. If the taxpayer is the consumer of the rock, the taxpayer will owe use tax on the value of the rock.

USE TAX -- JOINT OWNERS (RESIDENT AND NONRESIDENT) OF A MOTOR HOME LICENSED IN OREGON -- USED IN WASHINGTON. Where there are dual residency owners (Oregon and Washington), any use of the motor home by either joint owner within this state constitutes a taxable incident. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property.

MOTOR VEHICLE EXCISE TAX (MVET) -- JOINT OWNERS (RESIDENT AND NONRESIDENT) OF MOTOR HOME -- LICENSED IN OREGON -- USED IN WASHINGTON. Where a motor home is jointly owned by a Washington resident and a nonresident and the motor home is used by both owners in Washington, the owners must register the motor home in Washington and pay the MVET.

USE TAX -- ALLEGED ARIZONA RESIDENTS BUT VEHICLES LICENSED IN OREGON – Taxpayers are not entitled to exemption from use tax as nonresidents where they have not relinquished their Washington residency and the vehicles are not registered in the state in which they claim to be residents (Arizona) but rather are registered in a third jurisdiction (Oregon) to which the taxpayers have no substantive connections.

USE TAX -- WHETHER WASHINGTON RESIDENCY MAINTAINED – Where Washington residents are retired and spend a portion of the year in another state (Arizona) but maintain substantial connections to Washington and evidence establishes an intent to be located in Washington on more than a temporary or transient basis, the taxpayers have not relinquished their Washington residency and so are not eligible to use nonresident use tax exemptions.

USE TAX; AUTOMOBILE; EXEMPTION; ACQUIRED BY GIFT OR BAILMENT BY NONRESIDENT; BROUGHT INTO WASHINGTON MORE THAN NINETY DAYS AFTER. A Washington resident who uses a private automobile on which sales tax has not been paid, is not liable for use tax on the vehicle when the person acquired the vehicle by gift or bailment, and used the vehicle, while a resident of another state, and the acquisition and use occurred more than ninety days before the person moved to Washington.

BEER KEGS – RETURNABLE BEVERAGE CONTAINERS – EXEMPTIONS. An out-of-state brewing company purchases and uses beer kegs to store and deliver its beer, which it sells wholesale to its distributors and retail to taverns and other customers. The brewing company is not required to pay either retail sales tax when it purchases the kegs or use tax when it delivers the kegs to its customers, provided the brewing company charges its customers a refundable deposit on each keg.

USE TAX – CONSUMER – USE OF VEHICLE BY NONRESIDENT – WASHINGTON OWNER. A corporate officer’s use of a vehicle owned by the Washington taxpayer on a daily basis in conducting the taxpayer’s business affairs in Washington constitutes use of the vehicle by the taxpayer in Washington.

USE TAX -- PERSONALTY -- FIXTURES -- TEST. The Department follows the common law for determining whether an item is a fixture or tangible personal property. Department of Revenue v. Boeing Co., 85 Wn.2d 663, 538 P.2d 505 (1975). The three key factors are: (1) actual annexation; (2) application to use or purpose; and (3) intention to make a permanent part of the realty. The above test supports a finding that standard refrigerators, ranges, washers, dryers, and exercise equipment in an apartment complex were personalty subject to retail sales tax.

USE TAX – FOREIGN CORPORATION -- VEHICLE -- CORPORATE OFFICER USE -- USE IN WASHINGTON. Where a foreign corporation with offices in Washington purchases a vehicle and provides it to a corporate officer, who uses the vehicle in Washington for the business purposes, the company does not qualify for exemption from use tax. To qualify for a nonresident exemption under Rule 178(7)(j) the company’s vehicles must be most frequently dispatched, garaged, serviced, maintained and operated from a place of business in another state.

USE TAX -- PERSONAL PROPERTY -- SALE OF – ALLOCATION OF PURCHASE PRICE. The amount of the purchase price allocated to personal property in a real estate transaction may not represent true value for the personal property even though the transaction as a whole was at arm’s length.

USE TAX -- PERSONAL PROPERTY -- SALE OF – VALUATION -- AUCTIONS. To the extent auction-related evidence is offered to establish market value of personal property, such evidence must show that it involved comparable sales and did not involve a forced sale of property.

USE TAX -- PERSONAL PROPERTY -- SALE OF -- VALUATION. Value for use tax purposes is to be determined as nearly as possible according to the retail selling price, at the place of use, of similar products of like quality, quantity and character. For use tax purposes, a depreciation method of valuation may be an aid in arriving at an opinion of market value, but this evidence must be supplemented by evidence of such comparable sales.

USE TAX—BURDEN OF PROOF. For use tax purposes, the party disputing the written allocation of value between real and personal property by a buyer and seller has the burden of producing evidence of market value based on comparable sales.

USE TAX—VALUATION—FAIR MARKET VALUE. Use tax is based on fair market value of an item at the time and place of the transaction based on comparable sales. The Personal Property Tax rolls are based on estimated statewide values that are annualized and include depreciation. Personal Property Tax rolls may not be an appropriate evidence of fair market value for use tax.

USE TAX--VALUATION—MIXED REAL AND PERSONAL PROPERTY TRANSACTION. The Department of Revenue is not required to accept a buyer and seller’s written allocation of value between personal and real property as the market value of the personal property where the transaction was not an arms length one.

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.

MANUFACTURING EQUIPMENT AND MACHINERY EXEMPTION – PRINTING. Blank printing plates, purchased for use in an intermediate step in the printing process, are exempt from retail sales/use tax as machinery and equipment used directly in a manufacturing if they meet the one-year useful life requirement. Blank printing plates purchased for a one-time use are not exempt. Other supplies including film, tape, and developer, are not exempt from retail sales/use tax as machinery and equipment.

USE TAX -- TRANSFER OF PERSONAL PROPERTY WITH SALE OF REAL ESTATE – BURDEN OF PROOF. When tangible personal property is included in a transfer of real estate, use tax applies to the value of personal property received in the transaction, and real estate excise tax applies to the value of real estate transferred. Service station operator purchasing its station must respond to request for information about tangible personal property included in the transfer.

USE TAX – CHARTER BOAT – PERSONAL USE – STATUTE OF LIMITATIONS. A charter boat put to personal or intervening use is subject to use tax. It is only the first such use in this state, however, that is taxable. If the statute of limitations runs on that first use, the Department may not, thereafter, assert use tax on a subsequent use by the same person during a period of continuous ownership.

USE TAX – FINANCING LEASE. In light of the factors in Rule 211(2)(g), the taxpayer, as “lessee”, had a “financing lease” rather than a “true lease” of tangible personal property. Thus, sales tax is due on the total selling price at the time a sale of tangible personal property is made on an installment basis. If sales taxes are not collected and remitted, the Department may pursue the buyer/lessee for use tax on the total selling price.

USE TAX -- JOINT OWNERS (RESIDENT AND NONRESIDENT) OF A MOTOR HOME LICENSED IN OREGON -- USED IN WASHINGTON. Where a Washington resident and an Oregon resident jointly owned a motor home licensed in both owners’ names in Oregon, the Washington resident’s use of the motor home in Washington gave rise to the imposition of use tax.

USE TAX -- JOINT OWNERS (RESIDENT AND NONRESIDENT) OF A MOTOR HOME LICENSED IN OREGON -- CLAIM THAT CO-SIGNED FOR FINANCING PURPOSES ONLY -- SUFFICIENCY OF EVIDENCE. A Washington resident’s claim that he is listed as a joint owner of a motor home on purchase documents and the Oregon title and registration solely for financing purposes, is not established by the mere fact the monthly payments on the vehicle were made only from the bank account of the Oregon joint owner, when other evidence of ownership contradicts the Washington resident’s explanation.

B&O & RETAIL SALES TAX – TANGIBLE OBJECT & RIGHT TO REPRODUCE—TRUE OBJECT TEST -- END USER. Where a taxpayer sends a single copy of training material to a client with the right to reproduce a specified number of additional copies for use in conducting training classes, the true object of the transaction is the acquisition of tangible teaching materials.

RENTAL OR LEASE OF EQUIPMENT – PAYMENT BY SUBLESSEE OF LESSEE’S OBLIGATION TO LESSOR. A lessee of personal property becomes liable for the use tax when it does not pay the sales tax to its lessor. Where the sublessee makes lease payments directly to the lessor, and those payments include retail sales tax, the sublessee does not owe use tax with respect to those payments.

USE TAX __ MVET __ EXEMPTIONS __ NONRESIDENT. Washington residents who leave the state continue to be Washington residents until they establish a permanent residence elsewhere and, by their actions, manifest an intent to no longer live or be located in Washington on more than a temporary or transient basis.

USE TAX – MVET – EXEMPTIONS – NONRESIDENT. A Washington resident who begins spending substantial time outside the state continues to be a Washington resident when the individual’s continued ties to Washington manifest an intent to live or be located in this state on more than a temporary or transient basis. The existence and nature of ties to other states is relevant to that inquiry.

MVET -- USE TAX -- PURCHASE BY RESIDENT OUTSIDE STATE -- PRESUMPTION OF INTENTION TO USE IN STATE. When a Washington resident purchases a motor vehicle outside this state, a presumption is raised, for both use tax and MVET, that the resident intends to use the vehicle in this state. When the facts support presumptive use in this state, the burden is on the resident-taxpayer to prove that he or she has not had possession of or used the vehicle in this state.

USE TAX – DUAL RESIDENCY. Taxpayer who owns a home, operates a business, and has utility and telephone service in Washington has established substantial connections to Washington and evidence establishes an intent to be located in Washington, on more than a temporary or transitory basis. Taxpayer may be a resident of more than one state for use tax and motor vehicle excise tax (MVET) purposes.

USE TAX – DUAL RESIDENT -- USE OF VEHICLE REGISTERED OUTSIDE OF WASHINGTON. Taxpayer is not entitled to non-resident exemption for vehicles used in Washington when Taxpayer is a Washington resident. Vehicles used only to travel from Washington home to border are subject to use tax.

USE TAX – TAXABLE USE. Taxpayer's cruising of a vessel in Washington water, offer of charter in Washington waters, and use of the vessel as a home in Washington constituted taxable use in Washington state.

USE TAX – NON-RESIDENT EXEMPTION. Former Washington resident, who purchased a motor vehicle in Washington after his move to Idaho, was not liable for use tax where evidence showed only limited use in Washington and residency in Idaho was confirmed.

BARE BOAT CHARTER -- LEASE WITH OPERATOR -- USE TAX -- INTERVENING USE. If a taxpayer purchases and uses a boat solely for the purpose of chartering it to consumers under bare boar charters, no retail or use tax is due. Retail or use tax is due when the boat is chartered with the owner as the operator, because the owner has not relinquished dominion and control over the vessel. Under such circumstances the owner uses the boat in operating the business and use tax is due measured by the full purchase price.

MVET – LIABILITY FOR – TRANSFER OF MOTOR HOME BY WASHINGTON RESIDENTS TO OREGON CORPORATION. Washington resident taxpayers were not properly assessed MVET as the registered owners of a motor home registered in Oregon for the period of time after they contributed it to an Oregon corporation, despite the fact that the taxpayers failed to promptly transfer title to the motor home to the corporation.

MVET -- SHAM CORPORATION – PIERCING THE CORPORATE VEIL – DOCTRINE OF DISREGARD. If the form and substance of the corporate entity reveals the entity is a sham, the government may invoke the doctrine of disregard to serve the purpose of the tax statutes. Where Washington resident taxpayers formed an Oregon corporation, their choice of corporate form will be respected unless: 1) they intentionally used the corporation to violate or evade a duty and 2) disregard of the corporate entity is necessary to prevent unjustified loss to the injured party.

USE TAX -- EXEMPTION -- AIRPLANE -- INTERSTATE COMMERCE: To be exempt from sales/use tax as an instrumentality of interstate commerce, an airplane must be used on a “for hire” basis. A plane owned and used by a company to transport its executives across the country for business purposes does not qualify for the exemption, because such use is not for hire.

USE TAX -- AIRPLANE -- WASHINGTON OWNER -- TRANSPORTATION FINALLY ENDED. The transportation of an airplane, hangared in Oregon but used in Washington by a Washington owner is considered to have “finally ended,” for use tax purposes, when the plane is used in Washington. The exemption based on the “transportation finally ended” principle is available only to nonresidents of Washington.

USE TAX -- CREDIT FOR TAX PAID TO ANOTHER STATE. The use tax credit in 82.12.035 is available to a taxpayer only if it has paid a retail sales or use tax with respect to such property to another state, and has done so prior to using the property in Washington.

USE TAX – VEHICLE – ESTOPPEL –ULTRA VIRES ACTS –INCONSISTENT STATEMENT. The Department is not estopped from collecting tax where the petitioner has not shown that the Department made any statement that is inconsistent with the tax being asserted. Further, even if the taxpayer’s statement that he told a Department employee he was a Washington resident but the employee nonetheless granted him the nonresident exemption were credible, the Department would not be estopped from collecting the tax because ultra vires acts cannot be a basis to deprive the state of the power to collect taxes.

USE TAX – VALUE OF VEHICLE – USE OF CPI INDEX. Property acquired outside the state and subsequently used in the state is subject to use tax on the fair market value of the property at the time of first use within this state. Where the initial selling price of a vehicle does not reflect its market value because of extensive renovations made to the vehicle after purchase, the use of price guidebooks in determining the value of property used is acceptable.

USE TAX – COLLECTION OF TAX – COMMUNITY PROPERTY – SURVIVING SPOUSE -- ESTATE – NONCLAIM. The Department has a use tax claim against the surviving spouse where that spouse used the vehicle in Washington. The nonclaim statute does not bar the Department’s collection of the use tax.

USE TAX – MOTOR VEHICLE EXCISE TAX – SINGLE OUT-OF-STATE OWNER. If a Washington resident successfully rebuts a prima facie case of joint ownership of a vehicle registered in another state, that person is not liable for Washington use tax or motor vehicle excise tax.

USE TAX – MOTOR VEHICLE EXCISE TAX – JOINT OWNERSHIP – PRESUMPTION -- REBUTTAL. Evidence of a vehicle purchase order and a vehicle registration, showing the names of two persons on each document, establishes a prima facie case that the two persons are joint owners of the vehicle. The prima facie case may be rebutted, however by other evidence.

USE TAX -- RESIDENCE. For the use tax exemption articulated in RCW 82.12.0251 to be available: (1) a vehicle owner must be a nonresident, (2) the vehicle must be registered or licensed in the state of the user's residence, and (3) Washington registration of the vehicle must not be required.

USE TAX —EXEMPTION FOR PRIVATE AUTOMOBILES AND HOUSEHOLD GOODS. A motor home is not a private automobile or a household good for purposes of the use tax exemption for persons who move to the state.

RETAIL SALES TAX – RETAILING B&O TAX —USE TAX –CORPORATION’S PAYMENT OF PERSONAL DEBTS OF EMPLOYEES. A taxpayer who pays its employees’ personal credit card debts for purchases of items the employees purchase for their personal use is not liable for retail sales tax, retailing B&O tax, or use tax with respect to those payments.

SALES TAX – USE TAX – MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION – MAJORITY USE – BAKERY. To qualify for the M&E exemption, the majority use of equipment must be in the manufacturing operation. Use of equipment outside the manufacturing site to deliver products does not qualify as use in the manufacturing operation.

SALES TAX – USE TAX – MANUFACTURING MACHINERY AND EQUIPMENT ("M&E") EXEMPTION – FIRST USE – BAKERY. Under the majority use test, provided the taxpayer initially uses equipment in an activity where the majority of its use is an exempt use, the equipment qualifies for the M&E exemption. The fact that an item may have first been used in a minority, nonexempt use that is related to the manufacturing process does not disqualify that item from exemption.

DEDUCTION FOR RETAIL SALES TAXES PREVIOUSLY PAID. Where individuals purchase a yacht, properly paying retail sales tax, the corporation they transfer it to months later in a tax free transaction, is not entitled to the deduction for retail sales taxes previously paid under RCW 82.08.130.

USE TAX – TRUCKERS – PALLETS – USED IN TRANSPORTING CARGO OR EXCHANGE. Where a trucker purchases pallets in order to carry cargo owned by others, it is purchasing the pallets for its own use and fully subject to retail sales tax. Where a trucker purchases pallets for immediate exchange to manufacturers without intervening use, it is purchasing the pallets for resale.

PUBLIC UTILITY TAX -- DEDUCTIONS -- EXPORTS -- COMMODITIES -- FORWARD -- FOREIGN DESTINATIONS. Revenue from transportation of bunker fuel, for consumption, to ship side on Washington tidewater or navigable tributaries, is not deductible under RCW 82.16.050(8). There is no forwarding of commodities to interstate or foreign destinations required by the statute.

RETAIL SALES TAX AND USE TAX -- WATERCRAFT EXEMPTIONS -- DELIVERING BUNKER FUEL -- TRANSPORTING THEREIN OR THEREWITH -- INTERSTATE OR FOREIGN COMMERCE. The fact that ocean-going vessels to which Taxpayer’s watercraft deliver bunker fuel cannot consume the fuel until they are in international waters, does not bring Taxpayer’s instate transportation of the bunker fuel within the exemptions in RCW 82.08.0262 and RCW 82.12.0254.

RETAIL SALES TAX AND USE TAX -- WATERCRAFT EXEMPTIONS -- DELIVERING BUNKER FUEL -- TRANSPORTING THEREIN OR THEREWITH -- INTERSTATE OR FOREIGN COMMERCE. Delivering marine bunker fuel, for consumption, to other vessels carrying and moving cargo in interstate or foreign commerce, does not constitute “transporting” the cargo that is aboard the other vessels. It is not a use that qualifies for the exemptions in RCW 82.08.0262 and RCW 82.12.0254.

USE TAX -- JOINT OWNERS (RESIDENT AND NONRESIDENT) OF AUTOMOBILE LICENSED IN OREGON -- USED IN WASHINGTON. Where there are dual residency owners (Oregon and Washington), any use of the auto by either joint owner within this state constitutes a taxable incident. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property. Where Washington resident used a jointly owned auto in Washington that was licensed in her name and name of Oregon resident in Oregon, the first use of auto in Washington gives rise to the imposition of use tax.

USE TAX--CONSUMABLE SUPPLIES--TEST PERIOD. A correlation generally exists between a taxpayer's purchases of consumable supplies and its income. If a taxpayer believes a test period used by an auditor to arrive at a percentage to use for computing amounts subject to tax is not representative of other periods, it may compute the amount of use tax owing for another period. The assessment will be reduced if the taxpayer can show the percentage used by the auditor resulted in a higher tax than was due.

USE TAX -- VALUE -- ETB 302. In most cases, the taxable value of property for use tax purposes is the consideration paid by the purchaser to the seller for the property. Assessment of use tax on a truck will be reduced if taxpayer's records show that amount on its books listed as purchase price of truck also included cash received.

USE TAX -- MANUFACTURED PRODUCTS -- COMMERCIAL OR INDUSTRIAL USE -- MEASURE -- "VALUE OF THE ARTICLES USED " -- COSTS. When it is not possible to determine the "retail selling price, at the place of use, of similar products of like quality, quantity and character," under the provisions of Rule 178, the standard of determining value on a cost basis as set forth in Rule 112 may be used. The fact that salaries and other overhead may account for a substantial portion of such costs does not render the tax to be a tax on salaries or other intangibles.

USE TAX -- MARITAL PURCHASE OF AUTO IN WASHINGTON BY WASHINGTON RESIDENTS -- AUTO PICKED UP IN GERMANY -- AUTO USED IN WASHINGTON BEFORE REGISTRATION IN OREGON -- EVASION PENALTY -- MISLEADING INFORMATION FURNISHED ON SUBSEQUENT REGISTRATION IN WASHINGTON. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property. Where Washington residents purchased an auto in Washington, received delivery in Germany, shipped auto to United States, and used auto in Washington, the first use of auto in Washington gives rise to use tax liability.

USE TAX -- AUTO PURCHASED IN MASSACHUSETTS BY RESIDENT THEREOF -- AUTO BROUGHT INTO WASHINGTON BY PURCHASER WITHIN NINETY DAYS OF PURCHASE -- CREDIT FOR SALES TAX PAID. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property. Where Massachusetts resident purchased auto in Massachusetts, paid sales tax there, and brought auto into Washington within ninety days of purchase and commencement of residence in Washington, use tax applies.

USE TAX -- EXEMPTION -- NONRESIDENCY -- BURDEN OF PROOF. Persons claiming a statutory exemption of use tax which requires nonresidency in this state as a critical criteria have the burden to establish that they are not resident here and are resident elsewhere.

MOTOR VEHICLE -- REGISTRATION -- USE TAX -- NONRESIDENT -- EMPLOYMENT -- PART-TIME RESIDENT. Persons who are employed in this state and who regularly stay in this state at residential property owned by them here, and who cannot establish residency in any other state are not "nonresidents" of this state for purposes of vehicle registration exemption.

USE TAX -- NONRESIDENT EXEMPTION -- SECONDARY RESIDENCE. A user of tangible personal property in this state may be exempt if he or she is a bona fide nonresident. A yacht owner with a secondary residence here is not a bona fide nonresident.

Use Tax -- Exemptions -- Airplanes in Interstate Commerce -- Scope. Leasing an airplane to a party who transports property of persons in interstate or foreign commerce does not qualify for the use tax exemption created by RCW 82.12.0254; the statute requires that the transportation of the property or persons, rather than the airplane, be for hire.

RETAIL SALES/USE TAX -- CALENDARS -- RESALE. Gifts of tangible personal property to consumers constitute taxable use of that property by the donor. Calendars given to automobile purchasers are not resold so their acquisition by an auto dealer is subject to sales tax.

RETAIL SALES/USE TAX -- WHOLESALE/RESALE EXEMPTION -- CASUAL OR ISOLATED SALE -- REGULAR COURSE OF BUSINESS -- INTENT. Generally, tangible personal property acquired for resale is not subject to sales tax. Not so, however, where the property acquired and resold is not of the kind usually sold by a taxpayer and where the intent to resell was formed after acquisition.

USE TAX -- MOTOR VEHICLE. Use tax due on value of vehicle when it is first used in this state.

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.

SALES/USE TAX -- HELICOPTER -- LESSOR'S LIABILITY AT ACQUISITION -- INTERVENING USE -- CLOSELY HELD CORPORATION. Tangible personal property acquired exclusively for rental is not subject to retail sales tax. A helicopter leased by a sole proprietor to his closely-held corporation was found to be so acquired notwithstanding a gap in the term of a written lease agreement.

USE TAX -- EXEMPTION -- AUTO BROUGHT INTO WASHINGTON -- USE WHILE TEMPORARILY WITHIN THIS STATE -- EMPLOYMENT TRAINING PERIOD. The use of an auto brought into this state by a nonresident while temporarily within this state is exempt from use tax. Where a Massachusetts resident established residence here on obtaining employment here, it cannot be said that she was here temporarily even if after a ten month employment training period she left the state.

USE TAX EXEMPTION -- MOTOR VEHICLE. The specific requirements of that part of RCW 82.12.0251 relating to motor vehicles prevail over the general requirements of the statute relating to tangible personal property.

USE TAX EXEMPTION -- NON-RESIDENT. For excise tax purposes, a person may be a resident of more than one state.

BURDEN OF PROOF. Receipt showing payment of use tax to seller need not be in any particular form but must at a minimum show the identity of the property, date of sale, selling price, and amount of use tax collected and remitted by seller.

B&O TAX -- PACKING MATERIALS -- PALLETS -- VALUE OF PRODUCTS MANUFACTURED. A manufacturer’s separately-itemized charges for shipping pallets on which the manufacturer’s product is held for sale, where title to the pallets passes to the customer upon delivery, are part of the value of the products manufactured, and therefore are part of the measure of the manufacturing B&O tax.

USE TAX -- MVET -- NONRESIDENT EXEMPTION -- MOTOR HOME -- PARTNERSHIP – BURDEN OF PROOF. Use tax and MVET was found due on a motor home where Taxpayer failed to establish that the motor home was owned by an out-of-state partnership, that the commercial domicile of the alleged partnership was out-of-state, and that the partnership actually existed.

USE TAX -- VALUE OF ARTICLE USED -- PURCHASE PRICE – SOLD UNDER CONDITIONS NOT REFLECTING TRUE VALUE. A sales document showing a purchase price of $75,000 for a dilapidated motor home in Texas “as is, where is,” was found to not truly reflect the value of the motor home when it first entered the state of Washington several months later. Taxpayers testified that they had performed substantial engine repair work on the vehicle after its purchase and prior to entering Washington.

USE TAX – RESIDENCE – NON-RESIDENT STUDENT. A resident is a person "who manifests an intent to live or be located in this state on more than a temporary or transient basis.” Factors considered in determining residency include: state driver's license, voter's registration, public assistance, business registrations, ownership of residential property, interests in residential property in other states, in-state utility services, locations where tax returns are filed, and the intent to return to this state on other than a temporary or transient basis.

The taxpayer did not meet the requirements of the nonresident student exemption where she did not register her car in her state of residency. Further, the taxpayer did not meet the requirements for the exemption for use by a nonresident of a vehicle acquired more than 90 days prior to using the vehicle in Washington where the taxpayer did not acquire and use the car in her state of residency.

USE TAX – NONRESIDENT –EXEMPTION. To qualify for the nonresident use tax exemption, a taxpayer must prove he is (1) a “nonresident” of this state; (2) the vehicles were licensed in the state where he was a resident; and (3) the vehicles were not required to be licensed in Washington.

COMMUNITY PROPERTY; TAX LIABILITY. In order to sustain the use tax assessment, we need only to find one of the taxpayers in a marital community was a Washington resident. The Department has consistently held that a tax liability imposed on one joint owner of a vehicle who is a Washington resident can be imposed upon the other who is not a resident. The debt for use tax is a debt of the marital community, composed of the taxpayer and his wife.

USE TAX – DEFERRED SALES TAX --VALUE – GIFT – CELLULAR PHONES: Use tax on cellular phones given away to promote cellular service commissions is measured by the donor’s arm’s length purchase price of the phones.

USE TAX -- EXTENDED WARRANTIES. A retail tire dealer is subject to use tax on new replacement tires it provides customers who return defective tires pursuant to extended warranties the dealer sold to the customers.

USE TAX – DOMINION AND CONTROL -- MOTOR VEHICLE – OWNERSHIP. Use tax was properly imposed on Washington residents, who were co-owners of a motor home licensed in the State of Oregon, when they assumed dominion and control over the motor home by using it to transport the taxpayers’ property in Washington, even though they were not driving the vehicle at the time of its use in Washington.

RETAIL SALES TAX -- USE TAX -- EXEMPTION -- SOLDIERS' AND SAILORS’ CIVIL RELIEF ACT. Each monthly lease payment represents a separate taxable transaction for retail sales or use tax purposes. Section 514 of the Soldiers' and Sailors' Civil Relief Act, 50 U.S.C. § 514, does not prohibit the state from collecting from nonresident members of the armed forces retail sales or use tax on motor vehicle lease transactions.

RETAIL SALES TAX; USE TAX – RESALE CERTIFICATES – PURCHASES FOR DUAL PURPOSES – WITHDRAWAL FROM INVENTORY AND USE OUT OF STATE. The term “deferred sales tax” as used in WAC 458-20-102 means retail sales tax, not use tax.

RETAIL SALES TAX – RESALE CERTIFICATES – PURCHASES FOR DUAL PURPOSES – WITHDRAWAL FROM INVENTORY AND USE OUT OF STATE. A taxpayer who gives a valid resale certificate for articles it purchases, pursuant to RCW 82.08.130 and WAC 458-20-102(11) (purchases for dual purposes), and who subsequently withdraws some of the articles from inventory and distributes them outside the state as free samples, is liable for retail sales tax on the value of the samples distributed out of state.

RETAIL SALES TAX – “DEFERRED SALES TAX” – PURCHASES FOR DUAL PURPOSES. In a purchase for dual purposes situation in which a buyer gives a resale certificate as allowed by RCW 82.08.130 and WAC 458-20-102(11), and subsequently consumes some of the articles, the taxable event with respect to the articles consumed is the sale on which the buyer gave the resale certificate, not the subsequent use of the articles. The measure of the tax is the [selling] price of the articles purchased with a resale certificate and subsequently consumed.

RETAIL SALES TAX – “DEFERRED SALES TAX” – PURCHASES FOR DUAL PURPOSES. While WAC 458-20-102(11), dealing with purchases for dual purposes, instructs the buyer to report the “deferred sales tax liability” under the use tax classification on its excise tax return, the rule does not classify the tax liability as use tax. The term “deferred sales tax” as used in Rule 102 means retail sales tax.

USE TAX -- EXEMPTION -- NONRESIDENT -- MOTOR VEHICLE. To qualify for the use tax exemption for the use by a nonresident of a motor vehicle or trailer, a person must prove: (1) he or she was a “nonresident” of this state; (2) the vehicle was registered or licensed under the laws of the state of his or her residence; and (3) the vehicle was not required to be registered or licensed under the laws of Washington.

USE TAX -- EXEMPTION -- NONRESIDENT. Whether a person is a resident of this state for use tax purposes is fact specific. The Department will consider factors bearing on the person’s intent to live or be located in Washington on more than a temporary or transient basis.

RETAIL SALES TAX -- USE TAX – BAREBOAT CHARTER -- TIME CHARTER. The taxpayer had exclusive control of the barge for purposes of transporting, navigating, repairing, and unloading the barge, and the charterer only exercised control over the barge’s itinerary and the times and dates of departures and arrivals within a specified geographic area. As such the charter party is considered a time charter, not a bareboat charter, and it is not subject to retail sales tax.

RETAIL SALES TAX -- USE TAX – BAREBOAT CHARTER -- TIME CHARTER. In general, a bareboat charter is considered the rental of personal property and is subject to retail sales tax. In contrast, the service of transporting property for hire by the lease of a vessel with a crew is not considered a retail sale. A bare boat charter is a maritime lease or rental agreement that, as opposed to a "time" or "voyage" charter, has the effect of shifting the possession and control of the vessel from the owner to the charterer.

SALES TAX – USE TAX –DEDUCTION -- SPRAY MATERIALS – PACKING MATERIALS. The definition of “packing materials” does not encompass spray materials. The definition of packing materials is limited to “materials in which tangible personal property may be contained or protected within a container, for transportation or delivery to a purchaser.” Because the spray materials do not contain or protect the potatoes, nor are they used for transportation or delivery, spray materials do not qualify for the deduction

WHOLESALING B&O TAX -- SALES OF SPRAY TO FARMERS -- FARMER DEFINED. Sales of spray materials to farmers for the purpose of producing for sale any agricultural product are classified as wholesale sales. However, if a person uses agricultural products as ingredients in a manufacturing process, the person does not qualify as a farmer.

SALES OF CHEMICAL SPRAYS FOR THE POST HARVEST TREATMENT OF FRUIT – SALES TAX – USE TAX – DEDUCTION --POTATOES. The exception from the definition of a retail sale set forth in RCW 82.04.050(3) applies to sales of spray for fruit and not vegetables As such, it does not apply to sales of spray for potatoes.

SALES TAX – USE TAX – DEDUCTION --CHEMICAL USED IN PROCESSING – SPRAY MATERIALS. Even if spray materials qualified as a “chemical” for purposes of the exemption, in this case their use appears to occur prior to any processing taking place because the potatoes are sprayed at the time of harvest, when they are put into storage.

USE TAX – SAMPLE PRODUCT – DISPLAY – MANUFACTURED HOMES. If the sample home is carried on taxpayer’s books as inventory and not as a demonstrator, and if the home is sold as new with no substantial reduction in price or compromise of warranty because of “wear and tear,” then the taxpayer is not required to pay retail sales tax or use tax on its intervening display use of the home before sale.

Petition concerning unpaid retail sales tax on the Washington purchase of a motor home by Washington residents, and the penalties and interest assessed thereon.

LATE PAYMENT PENALTY -- USE TAX – YACHT – UNREGISTERED TAXPAYER. A foreign corporation, which owned a yacht that was in Washington waters for more than 60 days in a twelve month period, incurred a use tax assessment on the value of the yacht and a 20% late payment penalty for failure to pay the use tax before the first day after the last day of the second month following the due date.

RCW 82.12.020: USE TAX -- MULTIPLE TRANSACTIONS -- RELATIVES -- BAILMENT. Neither use tax paid by parents when they acquired a vehicle, nor use tax paid by their son when he purchased the vehicle could be refunded. The transactions could not be retroactively restructured.

RCW 82.04.040: USE TAX – REPOSSESSION – SATISFACTION OF DEBT. In contrast to a secured creditor that repossesses motor vehicles, the voluntary transfer of motor vehicles to an unsecured creditor in satisfaction of a debt constitutes a transfer of ownership for valuable consideration.

RCW 82.12: USE TAX – PIERCING CORPORATE VEIL – NOMINEES OR "DBAS." A taxpayer that conducts business through other entities and expressly represents those entities as being his nominees or "dbas" is liable for tax on transactions engaged in by his nominees or "dbas."

SERVICE B&O TAX – USE TAX - FOREIGN TRADE ZONE. Washington’s B&O tax is not an ad valorem tax, and federal law does not pre-empt Washington from assessing its B&O tax on gross income earned by the taxpayer’s activities associated with operating its foreign trade zone. Likewise, Washington is not barred from assessing use tax on tangible personal property used by the taxpayer to operate its foreign trade zone.

MISCELLANEOUS: AUDITS – TEST PERIODS – STATISTICAL SAMPLING – METHODOLOGY. Using a sampling of documents and projecting that sample over the entire period under review is an accepted and commonly used method to audit records. Over recent years the use of statistical sampling in sales and use tax audits has increased. In designing a statistical sampling program, consideration must be given to the cost of sampling, precision, and sample size.

USE TAX – DUNNAGE – PACKING MATERIALS – STEVEDORING COMPANY – BAILMENT TO. Where water-borne interstate carriers bail dunnage and packing materials to a stevedoring company that applies the items to secure outbound cargo, the stevedoring company is liable for use tax on the bailed items, based on their reasonable rental value, which will be pro-rated if the items are also used by others.

USE TAX – WATERCRAFT – INTEREST OR FOREIGN COMMERCE – PRIMARY USE. When a vessel is used in Washington for extended periods of time for live aboard and other non-exempt purposes, it does not qualify for the use tax exemption for vessels used “primarily” to transport persons or property for hire in interstate or foreign commerce.

USE TAX – REVOCABLE LIVING TRUSTS – PERSONS LIABLE – SUBSTANCE OVER FORM. As grantor, trustee, and beneficiary of a revocable living trust, the taxpayer had the exclusive right to enjoy, use, profit from, or sell the property, as would any owner, and was liable for the payment of use tax as an owner of the property, measured by the purchase price.

RCW 82.12.020: USE TAX – EXEMPTION FOR PERSONAL PROPERTY OF NONRESIDENT TEMPORARILY IN WASHINGTON – VACATION CABIN KIT. The personal property of a nonresident must be in Washington only temporarily if its use is to be exempt from use tax. A cabin kit brought into Washington by Canadians and used by them as a permanent vacation home is subject to use tax.

USE TAX – MOTOR HOME – RESIDENCY – OREGON LICENSE. To lawfully register a vehicle in Oregon under the laws of that state, persons must actually be “domiciled” there, i.e., they must make their home there.

USE TAX – FAMILY TRUST – VOID AS TO CREDITORS. All deeds of gift, all conveyances, and all transfers or assignments, verbal or written, of goods, chattels or things in action, made in trust for the use of the person making the same, shall be void as against the existing or subsequent creditors of such person. RCW 19.36.020

USE TAX – FAMILY TRUST – LIABILITY OF GRANTORS. When property is transferred into a standard revocable living trust (i.e., “family trust”), and the grantors act as the sole trustees and are the sole current beneficiaries of the trust, the substance of the transaction is that absolute ownership of the trust assets remains in the settlers who established the trust and who, as its beneficiaries, retain actual use of its assets. Such a trust will not shelter its grantors from Washington’s excise taxes.

USE TAX – MOTOR HOME – RESIDENCY. Washington residents who leave this state to travel in a motor home remain Washington residents when they fail to establish a home elsewhere outside this state.

USE TAX – FAMILY TRUST – LIABILITY OF TRUSTEE. Under trust law, a trustee is subject to personal liability to third persons on obligations incurred in the administration of the trust to the same extent that he would be liable if he held the property free of trust.

USE TAX – COMPUTER TRAINING – SEPARATELY NEGOTIATED AND SEVERABLE. Training costs, of payments to a vendor of canned computer programs for the training of employees to use those programs, are not subject to sales or use tax when separately negotiated and severable from purchase of the canned program.

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.

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.

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.

RETAIL SALES TAX – WHOLESALE SALE – SALE FOR RESALE IN THE REGULAR COURSE OF BUSINESS. A wholesale sale is a sale to a person who presents a resale certificate under RCW 82.04.470 and who purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person. A taxpayer is not entitled to a refund of sales tax where it purchases a boat at retail but then decides to resell the boat. Accord: ETA 482.12.178.

VALIDITY OF ASSESSMENT THAT INCORRECTLY STATES DATE OF FIRST USE. Proof that first taxable use did not occur on the exact date stated in the use tax assessment does not necessarily invalidate the assessment. An assessment of use tax is valid so long as the evidence establishes a date of first use within the statute of limitations.

USE TAX -- NONRESIDENT -- VESSEL BASED IN WASHINGTON. The exemption from use tax set out in RCW 82.12.0251 does not apply to the use by a nonresident who has based its yacht in Washington and used it here for pleasure and business purposes.

USE TAX -- NONRESIDENT -- VESSEL PRESENT FOR REPAIR -- REQUIREMENT THAT BE COVERED BY NONRESIDENT REPAIR AFFIDAVIT. Effective January 6, 1996, the Department has presumed that usage of an article of tangible personal property within the state by a nonresident which exceeds 60 days in any 12-month period is more than temporary usage and use tax is due, unless the property is present for repair and is exempt from the state’s vessel registration requirements under RCW 88.02.030(5), which exempts vessels present more than 60 days if they are covered by a nonresident repair affidavit.

USE TAX -- NONRESIDENT -- USE IN WASHINGTON FOR NONTRANSITORY BUSINESS ACTIVITY. The exemption from use tax set out in RCW 82.12.0251 does not apply to a nonresident’s use of a vessel in Washington for non-transitory business activity.

USE TAX-- EXEMPTION NOT TRANSFERABLE -- PRIVATE MOTOR VEHICLE. The use tax exemption provided a husband and wife in RCW 82.12.0251 for their privately owned motor vehicle is not transferable to their closely-held corporation when the couple contributed the automobile to their corporation as a capital asset.

USE TAX –REGISTERED BUSINESS – TRANSFER OF POSSESSION OF TANGIBLE PERSONAL PROPERTY. Registered businesses engaged in business in Washington are required to collect use tax from persons in this state to whom they transfer possession of tangible personal property and from whom they have not collected sales tax. Accordingly, Washington businesses are liable for use tax on shoes they purchase from an unregistered out-of-state vendor for their employees, which the employees pay for through paycheck deductions.

USE TAX – CORPORATE OFFICER’S USE OF YACHT “LEASED” TO CORPORATION – PERSONAL LIABILITY FOR PERSONAL USE –POSSESSION AND CONTROL – “TRUE LEASE” – ULTRA VIRES ACT –INTERVENING USE. Officer of corporation is liable for use tax on a yacht purchased outside Washington where officer did not relinquish possession and control of yacht so as to create a “true lease” to the corporation. To impose personal liability for use tax against the officer, the Department need not prove that officer’s action in using yacht was ultra vires.

USE TAX – VESSEL – USE AS A CONSUMER – BAREBOAT CHARTER. The taxpayer failed to prove it purchased the vessel solely for resale as tangible personal property in the ordinary course of business. Evidence suggested that the taxpayer intended to engage in crewed charter and that the taxpayer had used the boat for personal enjoyment.

USE TAX – VESSEL – EXEMPTION – NONRESIDENT USING PROPERTY IN WASHINGTON ON A TEMPORARY BASIS. The use tax exemption for tangible personal property brought to Washington by nonresidents for temporary use in this state did not apply where the vessel was based in Washington and the vessel was used in a nontransitory business in Washington. Furthermore, the taxpayer, a corporation organized under the laws of another state, was not a nonresident of Washington.

USE TAX – VESSEL – EXEMPTION – NONRESIDENT VESSEL LOCATED IN WASHINGTON EXCLUSIVELY FOR REPAIRS. The vessel was not in Washington exclusively for repairs where the taxpayer intended to use the boat in a Washington charter business and boat was based in Washington. Furthermore, the taxpayer, a corporation organized under the laws of another state, was not a nonresident of Washington.

USE TAX – PIERCING CORPORATE VEIL – CORPORATE DISREGARD. The funneling of income that a taxpayer is entitled to receive through a wholly owned subsidiary does not extinguish the taxpayer’s tax obligations. To the extent the income was the subsidiary’s income, the corporate form will be disregarded where corporate formalities were not followed, funds were diverted to the taxpayer’s personal use, the entity was not registered or reporting business income, misrepresentations were made concerning corporate interests, and the taxpayer used the subsidiary to avoid paying tax in Washington.

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.

USE TAX – CREDIT FOR SALES OR USE TAX PAID TO OTHER JURISDICTIONS – NOT APPLICABLE TO MANUFACTURER THAT PAID SALES TAX IN ERROR. The use tax credit for sales tax or use tax paid to another jurisdiction applies only to situations where the tax paid to the other jurisdiction was due. An out-of-state manufacturer that paid sales tax to another jurisdiction in error, on materials it consumed in manufacturing, is not entitled to a credit against Washington retail sales tax for the sales tax erroneously paid to the other jurisdiction.

USE TAX – PERSONAL VEHICLE – LICENSED IN ANOTHER STATE – “NONRESIDENT” – DEFINITION. Because the use tax and licensing statutes relate to one another and involve the same subject matter, the Department reads these together. Therefore, even though the use tax statutes do not define the term “nonresident,” and the Department has not issued a rule defining that term, the Department will look to the “resident” definition in the vehicle licensing provisions in RCW 46.16.028(1).

USE TAX – PERSONAL VEHICLE – DOMICILE – RESIDENCE -- FACTORS. A person may have more than one residence or home for use tax and MVET purposes. Significant factors to consider when determining whether an individual has established a residence in Washington include: (1) the amount of time spent in Washington; (2) the nature and use of property in this state; (3) domestic, civil, business, and social activities in Washington; (4) the intention when absent to return to Washington, and (5) the nature and use of property in other states.

USE TAX – EXEMPTION -- PERSONAL VEHICLE – BONA-FIDE RESIDENT – OUT-OF-STATE PURCHASE AND USE FOR MORE THAN 90 DAYS BEFORE ENTERING WASHINGTON. A bona fide resident of Washington who purchased and used a vehicle outside of Washington for more than 90 days before entering this state would be exempt from payment of use tax on that vehicle.

USE TAX – SHAREHOLDER’S USE OF PLANE OWNED BY CORPORATION. Use tax was due when plane purchased for resale was put to intervening use.

USE TAX – VALUE OF ARTICLE USED – PURCHASE PRICE. The value of article used was found to be the purchase price plus the cost of improvements where an article was improved prior to the first intervening use.

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.

USE TAX -- NONRESIDENT MILITARY -- PERMANENT ASSIGNMENT TO WASHINGTON MILITARY BASE. A military officer’s use of his motor home purchased and used in Washington while he was on permanent assignment to a Washington military base was held to be subject to use tax even though he was a legal resident of Oregon.

USE TAX – PRINTED MATERIALS PRODUCED BY A COUNTY FOR ITS OWN USE -- MEASURE OF VALUE TAXED. The correct measure of tax includes every item of cost attributable to the production of the particular item. Such costs include labor, materials and both direct and indirect overhead.

USE TAX – NONTAXABLE USE -- VESSEL -- SEA TRIAL – TO BE CONSIDERED IN CONTEXT. Sea trials constituting nontaxable use (i.e., use not consistent with use as a consumer) must be considered in context. Evaluating the repairs on an expensive yacht with numerous complex systems prior to acceptance from a repair facility will require a different type (and duration) of sea trial than would the evaluation of a new 8-foot ski/fishing runabout for purchase.

USE TAX – VALUE – REBUILT VESSEL – LACK OF DOCUMENTATION. When a vessel is completely rebuilt before its first use in Washington, the Department will accept Compliance’s value when Taxpayer has not submitted records to support its assertion that Compliance’s valuation of the vessel at the time of its first use was in error

USE TAX – NONTAXABLE USE – VESSEL – SEA TRIAL – DESCRIPTION. A non-taxable sea trial is designed to examine a vessel – either by specific function or as an entire whole – systematically through a comprehensive series of examinations. The objective is to identify essential problems for correction (engines, navigation, electrical, etc.) or to test the safety and essential functionality of the vessel in the context of repairs, insurance surveys, or appraisals in purchase situations.

USE TAX – NONTAXABLE USE – VESSEL – SEA TRIAL – BURDEN OF PROOF – DOCUMENTATION. To satisfy the necessary burden of proof that a sea trial is nontaxable, a taxpayer must document the purpose of the trial, the specific test performed, and the results. To evaluate repairs, a sea trial is best performed with a professional on-board operator or observer with written records of tests performed.

USE TAX – PURCHASE FOR RESALE (LEASING) -- REGULAR COURSE OF BUSINESS. A corporation formed to purchase and lease an aircraft, which leases the aircraft to another business owned by an officer of the corporation, will owe neither retail sales tax on the purchase, nor use tax on the use, if the evidence establishes that the lessor is actually and regularly engaged in the business of leasing such articles, and the lease to the officer’s business is not illusory.

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.

USE TAX – DUAL RESIDENCY. Whether a person is a resident of this state for use tax purposes is fact specific. The Department will consider factors bearing on the person’s intent to live or be located in Washington on more than a temporary or transient basis. For use tax purposes, a person may be a resident of more than one state.

USE TAX – WATERCRAFT – EXEMPTION – TEMPORARY USE BY NONRESIDENT. Taxpayer was not entitled to the exemption for watercraft temporarily used in Washington by a nonresident because the taxpayer was found to be a resident

USE TAX -- RESIDENCE. For the purposes of use tax, a serviceman stationed and living in Washington is considered a Washington resident.

USE TAX -- FEDERAL PRE-EMPTION -- SERVICE MEMBERS CIVIL RELIEF ACT. The Service Members Civil Relief Act (formerly the Soldiers and Sailors Civil Relief Act) prohibits the imposition of “licenses, fees, or excise imposed on motor vehicles and their use” if the service member paid the license, fee or excise to the state of domicile. This prohibition applies to annual fees and taxes, but does not apply to use tax.

USE TAX – VALUE OF ARTICLE USED – ARTICLES OWNED BY OUT-OF-STATE BUSINESS TEMPORARILY USED IN WASHINGTON FOR BUSINESS. Trucks owned by an out-of-state service provider that are temporarily in Washington for business purposes are subject to use tax for the entire period they are in the state, not just for the period they are used in providing the service activity.

USE TAX – VALUE OF ARTICLE USED --ACQUIRED OUT OF STATE -- FAIR MARKET VALUE. When equipment is acquired and used outside the state for an extended period before being brought into Washington, the fair market value at the time and location of first use in the state generally is the appropriate measure of the use tax, rather than purchase price.

RETAIL SALES TAX -- EXEMPTION -PURCHASE OF MEALS – NONPROFIT HOSPITAL. A nonprofit hospital’s purchase of meals from third party vendors, which the hospital provided to its senior citizen, disabled, or low-income patients, qualifies for the RCW 82.08.0293(3)(b) exemption from retail sales tax.

USE TAX -- CORPORATE DISREGARD – ALTER EGO DOCTRINE – USE TAX. Where a corporate shell with no function beyond holding title to assets that are for the exclusive personal convenience and benefit of its only shareholders, has operated as the mere alter ego of the shareholders, and regarding it as separate from its shareholders would aid in the consummation of a wrong on the State, the Department may look beyond the legal fiction of distinct corporate existence and disregard the corporate entity.

USE TAX – FOREIGN COMMERCE CLAUSE – BOOMSTICKS – BOOM GEAR.

USE TAX - IMPORT-EXPORT CLAUSE – BOOMSTICKS – BOOM GEAR. Use tax assessed on the use of boomsticks and boom gear in Washington after being imported into this state from Canada does not violate the Import-Export Clause of the U.S. Constitution because the tax is not levied on importation or the imported goods themselves, but is levied on the activity of using the items within Washington after they were imported.

USE TAX – CONSUMER – BOOMSTICKS – BOOM GEAR - DOMINION AND CONTROL. Upon reaching their destinations in Washington log rafts imported from Canada were under the taxpayer’s dominion and control and the taxpayer was subject to use tax on the boomsticks and boom gear used in storing the logs.

USE TAX – BOOMSTICKS -- VALUATION. For boomsticks that the taxpayer owned and used in Washington it owes use tax on their reasonable rental value for the ones that were used here for less than 180 days in a 365 consecutive days period. For boomsticks it owned that remained in Washington for more than 180 days in a 365 consecutive days period, use tax is due on their full value.

USE TAX -- CORPORATE DISREGARD – ALTER EGO DOCTRINE. Where a corporate entity is a mere shell with no purpose besides avoiding taxation, its only activity is holding title to assets that are for the exclusive personal convenience and benefit of its only shareholders, it has operated as the mere alter ego of the shareholders, and regarding it as separate from its shareholders would aid in the consummation of a wrong on the State, the Department may look beyond the legal fiction of distinct corporate existence and disregard the corporate entity.

USE TAX – APPORTIONING MEASURE OF USE TAX. A Washington consumer who leases a motor home from an out-of-state lessor for personal use in Washington and other states cannot apportion the measure of its use tax obligation between Washington and the other states where it uses the vehicle.

USE TAX – TEMPORARY PRESENCE OF PROPERTY IN STATE. Where a Washington resident’s vessel passed through Washington waters, the vessel is subject to use tax because the taxpayer assumed possession, dominion and control of the vessel while it was within the state.

WATERCRAFT EXCISE TAX – NONRESIDENT REPAIR EXEMPTION – LATE-FILED AFFIDAVITS INEFFECTIVE TO EXTEND REPAIR EXEMPTION. To extend the repair exemption from vessel registration in RCW 88.02.030 beyond sixty days, and therefore be exempt from Watercraft Excise Tax under RCW 82.49.020, the nonresident must file a nonresident repair affidavit with the Department on or before the sixty-first day while the vessel is located upon the waters of the state exclusively for repair. A nonresident repair affidavit that is filed late is not effective to extend the repair exemption.

USE TAX -- NONRESIDENT REPAIR EXEMPTION -- LATE-FILED AFFIDAVITS INEFFECTIVE TO EXTEND REPAIR EXEMPTION. To extend the nonresident repair exemption from use tax beyond sixty days, the nonresident must file a nonresident repair affidavit with the Department on or before the sixty-first day while the vessel is located upon the waters of the state exclusively for repair. A nonresident repair affidavit that is filed late is not effective to extend the repair exemption.

USE TAX –AIRCRAFT –PURCHASES OF AIRCRAFT AND REPAIRS. Exemption from the use tax requires that the taxpayer document that the aircraft was “used primarily in conducting interstate or foreign commerce by transporting property or persons.”

RCA 82.12.020, RCW 29A.08.010: USE TAX – PRIVATE MOTOR VEHICLE – INTENT OF RESIDENCY – VOTING.

RCW 82.12.020, 82.12.0251: USE TAX — PRIVATE MOTOR VEHICLE – EXEMPTION – NONRESIDENT: The mere fact that one purchases a motor vehicle in another state more than ninety days prior to the vehicle’s registration in Washington does not meet the use tax exemption’s requirements. Instead, the statute and rule require that a bona fide resident of another state both acquire and use the motor vehicle more than ninety days prior to the time the person enters Washington.

RCW 82.12.020: USE TAX – LEASE – DOMINION AND CONTROL –RENTAL OF EQUIPMENT WITH OPERATOR. Sound and lighting company did not relinquish dominion and control over its equipment when it leased the equipment to its customers with an operator. As such, because the taxpayer did not pay retail sales tax on the equipment, taxpayer was liable for use tax on the equipment.

RCW 82.12.020; ETA 332.12.178: USE TAX – INTERVENING USE – FLOOR DEMONSTRATORS. Whether use tax is due on the use of a sample product for demonstration is determined on a case by case basis in light of the guidelines contained in ETA 332.12.178 and Det. No. 92-044R, 13 WTD 63 (1993). Such use generally is not subject to use tax if the product is used in the furtherance of its own sale or the sale of other like products, is carried on Taxpayer’s books as inventory and not as a demonstrator, and does not experience use as a demonstrator so extensive that it cannot be sold as new.

RCW 82.12.035: VALUE ADDED TAX -- USE TAX CREDIT. The Swedish value added tax (VAT) is not the equivalent of a retail sales tax for the purposes of the RCW 82.12.035 use tax credit for sales taxes paid to foreign countries.

RCW 82.12.035: "DROIT DE SUITE"-- USE TAX CREDIT. The Swedish Droit de Suite charge is not the equivalent of a retail sales tax for the purposes of the RCW 82.12.035 use tax credit for sales taxes paid to foreign countries.

USE TAX – EXEMPTION -- FERTILIZER & SPRAY MATERIALS -- BAILOR OF SEED -- FARMER – PRESENT RIGHT OF POSSESSION –– PERMISSION TO ENTER LAND. A bailor of seed did not have the required “possessory interest” in land to be considered a “farmer” eligible for the RCW 82.04.050(8)(b) fertilizer and spray material exemption, even though the grower gave the bailor permission to enter the land in order to help grow the crop.

RCW 82.12.801; RCW 82.12.802 -- USE TAX -- VESSEL -- EXEMPTION FOR CERTAIN USES BY VESSEL DEALERS. A vessel owner who used a vessel while it was listed for sale in dealer inventory did not qualify for the use tax exemptions in RCW 82.12.801 and 82.12.802 relating to use of vessels by vessel dealers. The taxpayer was not a vessel dealer.

RULE 227(3), RULE 178; RCW 82.12.020, RCW 82.04.190(2): USE TAX – DIRECT BROADCAST SATELLITE PROGRAMMING – FREE EQUIPMENT AND INSTALLATION: Providers of direct broadcast satellite programming, as consumers, are liable for deferred sales tax/use tax per on equipment and the installation of that equipment they gave to their subscribers for free.

3] RULE 178; RCW 82.12.020, RCW 82.14.030; 47 USC § 152, (HISTORICAL AND STATUTORY NOTES): LOCAL SALES/USE TAX – DIRECT BROADCAST SATELLITE PROGRAMMING – FREE EQUIPMENT AND INSTALLATION – NO FEDERAL PREEMPTION: Local jurisdictions are not preempted from imposing the local use tax/deferred sales tax portions of the use tax/deferred sales tax assessed on providers of direct broadcast satellite programming for giving their subscribers free equipment and installations because the federal preemption statute, 47 USC § 152, historical and statutory notes, applies only to local taxing jurisdict

[2] RULE 116, RULE 178; RCW 82.12.020: USE TAX – PREMIUMS – DIRECT BROADCAST SATELLITE PROGRAMMING – FREE EQUIPMENT AND INSTALLATION: Providers of direct broadcast satellite programming are not exempt from deferred sales tax/use tax on the free equipment and installations that they gave subscribers because the free equipment and installations are not tax exempt premiums.

USE TAX -- CREDIT FOR TAX PAID TO ANOTHER STATE -- DEFINITION OF SALES TAX -- VAT. The Multistate Tax Compact, chapter 82.56 RCW, provides a definition of "sales tax" in RCW 82.56.010 which clarifies the retail sales tax credit to be granted in RCW 82.12.035. Under RCW 82.56.010, "sales tax" is defined as a tax imposed on a sale which is required by state or local law to be separately stated from the sales price by the seller or which is customarily separately stated from the sales price.

USE TAX -- USE OF YACHT IN WASHINGTON -- PERSON IN THIS STATE. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property. The tax applies to all persons in this state whether a resident or nonresident unless there is a statutory exemption granted.

USE TAX -- EXEMPTION -- WATERCRAFT USED PRIMARILY IN INTERSTATE COMMERCE -- INTENT -- FIRST USE IN WASHINGTON . The use tax does not apply with respect to the use of watercraft used primarily in conducting interstate or foreign commerce by transporting therein property and persons for hire. Where a yacht was used in Washington for other purposes for over three years while awaiting authority to engage in the charter trade, it did not qualify for the exemption. Intent by itself to use the yacht for charter trade does not give rise to the exemption.

USE TAX -- EXEMPTION -- WATERCRAFT COMPONENT PART -- INTERSTATE COMMERCE. There is a sales/use tax exemption on the use of personalty which becomes a component part of watercraft used in conducting interstate or foreign commerce by transporting therein or therewith property and persons for hire. The exemption was not available to the taxpayer because its yacht was not used in interstate commerce to transport for hire.

USE TAX -- MEASURE OF TAX -- VALUE OF ARTICLE USED. Use tax is imposed in an amount equal to the "value of the article used" multiplied by the tax rate. The value of the article used is the purchase price if the article is sold under such conditions that the purchase price represents the true value. Where there is documentary evidence of the purchase price and there was an arm's length negotiation in arriving at the purchase price, it is incorrect to use fair market value or an appraisal to arrive at the "value of the article used" that is the measure of the tax.

USE TAX -- CREDIT FOR TAX PAID TO ANOTHER STATE -- VALUE ADDED TAX (VAT) -- FOREIGN COUNTRY. A credit is allowed for the amount of retail sales or use tax paid by the user to any other state prior to the use of the property in this state. The tax credit mechanism of the . . . VAT is such that it does not become the equivalent of a retail sales tax on goods sold for export. The facts in this case led to a conclusion that the taxpayer paid no tax at all on its purchase of a yacht in [foreign country] which it then removed from [the foreign country].

USE TAX -- EXEMPTION -- NONRESIDENT TEMPORARILY IN THIS STATE -- REPAIRS. There is an exemption from use tax for a nonresident temporarily in this state as to use of personalty brought into this state. There is no specific statutory exemption from use tax on the personalty used in this state merely because it was brought into the state for repairs. The exemption would arise if the nonresident is temporarily in this state.

USE TAX -- EXEMPTION -- TRANSPORTATION FINALLY ENDED -- POPE AND TALBOT CASE. The use tax does not apply with respect to use of personalty purchased outside this state by a nonresident until the transportation of such article has finally ended. Transportation of an article "finally ends" when it is home-based in Washington and thereby acquires a tax situs. Pope and Talbot case cited.

USE TAX -- EXEMPTION -- ADJUSTMENT OF BENEFICIAL INTEREST -- TAX NOT PREVIOUSLY PAID BY TRANSFEROR. Where there has been a transfer of the capital assets to or by a business, the use of such property is not deemed taxable to the extent the transfer was accomplished through an adjustment of the beneficial interest in the business, provided the transferor previously paid sales or use tax on the property transferred. In this case, the transferor had not previously paid sales or use tax. The transferor had used the property in Washington. The transferee used the property in Washington.

USE TAX -- CREDIT FOR TAX PAID TO A FOREIGN COUNTRY -- SIMPSON V. STATE CASE. Under the holding of the Court in Simpson v. State, 26 Wn.App. 687 (1980), the payment of retail sales or use tax to a foreign country qualifies for the credit allowed in RCW 82.12.035 on constitutional grounds. But, the Court held that the term "state" in RCW 82.12.035 does not otherwise include a foreign country.

USE TAX -- PARTNERSHIP -- OWNER/MANAGER MEALS -- BUSINESS PURPOSE -- MEASURE OF TAX -- COST BASIS. Meals provided by restaurant operated as a partnership to owner/manager found subject to use tax where cost of providing meals considered a business expense by the taxpayer. Measure of tax is the cost of the food.

USE TAX -- CONSUMER -- PROMOTIONAL MEALS -- MEASURE OF TAX. A restaurant business which gives away meals to promote its business is the consumer of such meals; use tax applies on the value of the meals which is the retail selling price.

USE TAX -- LEASED MOBILE PROPERTY -- PURCHASED PROPERTY DISTINGUISHED. The statutory exemption provided by RCW 82.12.020 does not apply to property that is acquired by lease . Pope & Talbot distinguished.

USE TAX -- EXEMPTION -- NONRESIDENT -- RESIDENCE -- DOMICILE. Department recognizes distinction between "residence" and "domicile," thus various use tax exemptions available to nonresidents are not available to persons residing here, even though they may be domiciled elsewhere.

USE TAX -- EXEMPTION -- NONRESIDENT -- RESIDENCE -- DOMICILE. While a person may have only one legal "domicile," there is no reason why he may not have more than one place of residence.

USE TAX -- EXEMPTION -- SOLDIERS' AND SAILOR'S CIVIL RELIEF ACT. Section 514 of the Soldiers' and Sailors' Civil Relief Act (50 U.S.C. + 514) does not prohibit the state from collecting retail sales or use tax from nonresident members of the armed forces.

USE TAX EXEMPTION -- NON-RESIDENT. For excise tax purposes, a person may be a resident of more than one state.

USE TAX -- CONSUMABLE ITEMS -- CONSUMER -- ALLEGED USE OF TAXPAYER'S ID NUMBER BY ANOTHER. Where taxpayer's records indicated it had purchased items for a vessel which it had leased from another business entity owned by an officer of the taxpayer, and the lease agreement stated the taxpayer was responsible for such purchases, the taxpayer owed use tax on the purchases on which it had not paid retail sales tax.

USE TAX - MOTOR VEHICLES - NONRESIDENT - WASHINGTON VOTER - BUSINESS USE. The use tax exemption provided by RCW 82.12.0251 and Rule 178 is inapplicable because taxpayers were not nonresidents. Additionally, the motor home, by their own admission, was repeatedly used in this state for business purposes.

USE TAX -- BARGES -- USE IN INTERSTATE COMMERCE. RCW 82.12.0254 does not provide an exemption for barges used by a lessee in interstate commerce to transport its own materials between its own facilities; such transportation is not transporting for hire.

USE TAX -- EXEMPTIONS -- PRESCRIPTION DRUGS -- DRUG SAMPLES. The use tax exemption of Revised Code of Washington (RCW) 82.12.0275 is available only for patient/users and consumers of prescription drugs for whom such drugs are prescribed, the exemption is not available for persons who distribute free "sample drugs" to promote further sales.

USE TAX -- TAX MEASURE -- VALUE OF ARTICLE USED -- GIFTS. The value of articles given away is to be determined as nearly as possible by the retail selling price of similar articles. Where no such similar retail value exists, the value of articles gifted in this state shall be determined by the total costs of production, (Rule 178 to be so amended).

USE TAX -- PUT TO USE. Use tax liability arises at the time the property is first put to use in this state. Property is not put to use if invoiced but not received in Washington.

USE TAX -- WASHINGTON RESIDENT AS COLLEGE STUDENT IN OREGON -- NONRESIDENT STUDENT AT COLLEGE. A college student from Washington attending an Oregon college becomes a nonresident student of Oregon, not a nonresident of Washington. His acquisition of a vehicle in Oregon and subsequent use of the vehicle in Washington gives rise to use tax liability.

USE TAX -- WASHINGTON RESIDENT -- OREGON LICENSED VEHICLE -- POPE AND TALBOT CASE -- TRANSPORTATION FINALLY ENDED. Exemption from use tax on a vehicle brought into Washington under the "transportation finally ended" principle applies only to nonresidents of Washington. Pope and Talbot case discussed.

USE TAX -- JOINT OWNERS OF AUTO LICENSED IN OREGON BY WASHINGTON RESIDENTS. The use tax is imposed on the use in this state of any article of tangible personal property by consumers unless statutorily exempted. Where Washington residents bought motor vehicle in Oregon and licensed it there, the first use of the vehicle in Washington gives rise to the imposition of use tax. Where there are joint owners, any use of the vehicle by either joint owner within this state constitutes a taxable incident.

Rule 178; Rule 228; RCW 82.12.010; RCW 82.32.070; RCW 82.32A.030: USE TAX – DUTY TO KEEP SUITABLE RECORDS. Corporation did not provide Department with suitable records (e.g., invoices) to support its assertion that it did not consume or receive items in Washington that it purchased. Therefore, the corporation owes use tax on those items.

RCW 82.12.035: USE TAX – CREDIT FOR RETAIL SALES TAX PAID TO ANOTHER STATE. If the Texas retail sales tax was legally imposed and paid with respect to cranes that were delivered in Texas, the taxpayer was entitled to a credit under RCW 82.12.035.

RCW 82.12.020: USE TAX -- VESSEL– ALTER EGO DOCTRINE. One situation in which it is proper to disregard a corporate entity is when the corporation is used merely as an instrumentality of the entities that own it in the conduct of their own business, generally referred to as the alter ego situation. In the present case, there is no evidence that the LLC was formed with the object of any gain, benefit, or advantage beyond avoiding the payment of Washington State use tax on yachts used solely by its Washington State resident owners.

RULE 178, RULE 17802; ETA 3029.2009: USE TAX - VALUE OF THE ARTICLE USED - VALUE OF MOTOR VEHICLES – REVIEW OF DEPARTMENT OF LICENSING’S DETERMINATIONS OF VALUE: The Department of Revenue has the authority to rely on a taxpayer’s books and records to adjust the taxable value of motor vehicles even after the Department of Licensing has accepted lower reported vehicle values and collected use tax on those lower values.

RULE 178; RCW 82.12.010: USE TAX - USE IN WASHINGTON STATE. Washington State resident buyer of antique automobiles received the automobiles in Washington State, and exercised dominion and control over the automobiles in Washington State. Use tax liability arises because the Washington State resident did not pay any retail sales tax on these out-of-state purchases.

RCW 82.12.010, RCW 82.04.050: USE TAX – PURCHASE FOR RESALE. Use tax was owed by Washington State resident buyer who did not pay any retail sales tax on out-of-state purchase of two automobiles. Buyer failed to demonstrate that it was in the automobile retailing business, or that it purchased the two antique automobiles for resale in the regular course of business.

RCW 82.08.050(9): BUYER TO PAY, SELLER TO COLLECT TAX – STATEMENT OF TAX - Even if the buyer and seller represent that the invoiced amount includes retail sales tax, RCW 82.08.050(9) requires the retail sales tax be separately stated on any sales invoices or other instrument of sale.

RULE 178; RCW 82.12.0251: USE TAX – PRIVATE MOTOR VEHICLE – NONRESIDENT – ACTIVE MILITARY, ARMED FORCES – EXEMPTION: Where no retail sales tax or use tax had been paid in another jurisdiction, the Department denied the taxpayer’s petition for reversal of a use tax assessment, concluding that the taxpayer, a nonresident and an active member of the armed forces stationed in Washington, had not both acquired and used his motor vehicle in another state or foreign country more than 90 days prior to entering Washington.

USE TAX -- DEFERRED SALES TAX -- LEASE -- SELLING PRICE -- VALUE OF ARTICLE USED . A lease of tangible personal property, wherein monthly payments are made, is not a single transaction, but a contract for a series of transactions. Each transaction (each monthly lease payment) represents a separate retail sale. Gandy v. State, 57 Wn.2d 690 ( 1961). (Courtright Cattle Company Seal v. Dolson Co., 94 Wn.2d 645 ( 1980) also discussed).

USE TAX -- CREDIT -- TAX PAID TO ANOTHER STATE -- DEFINITION OF USE TAX. The Multistate Tax Compact, chapter 82.56 RCW, provides a definition of "use tax" in RCW 82.56.010 which clarifies the use tax credit to be granted in RCW 82.12.035. Under RCW 82.56.010, "use tax" is defined as a nonrecurring tax which is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession or custody of that property including any consumption, keeping, retention or other use, and is complementary to a sales tax.

USE TAX -- CREDIT FOR TAX PAID TO ANOTHER STATE -- REGISTRATION TAX OF THE OTHER STATE. A credit is allowed for the amount of retail sales or use tax paid by the user or donor to any other state prior to the use of the property in this state. Where the "registration tax" on an automobile in the other state is in lieu of other state's sales tax and use tax, it qualifies for the credit. The "registration tax" was not a registration fee or license plate fee for which there is a separate charge.

USE TAX -- CONSUMABLES. Use tax is due for purchases of consumables, where the taxpayer cannot substantiate that retail sales tax was paid.

RETAIL SALES TAX -- SALE/LEASEBACK -- FEDERAL TAX RETURNS. A taxpayer may not treat a transaction one way (a sale/leaseback) for federal tax purposes, but another way (a loan) for state tax purposes.

RETAIL SALES TAX -- SALE/LEASEBACK. If a taxpayer sells and immediately leases back tangible personal property, retail sales tax is due on each monthly lease payment.

USE TAX -- CONSUMABLES -- TEST PERIOD. Use tax is due, in an amount equal to the sales tax, when tangible personal property is used in this state without payment of retail sales tax. A test period for consumable purchases may be used to project tax liability over an entire audit period.

USE TAX -- EXEMPTION -- AUTO PURCHASED IN OREGON BY RESIDENT THEREOF -- AUTO BROUGHT INTO WASHINGTON WITHIN NINETY DAYS OF ESTABLISHING RESIDENCE IN WASHINGTON. The use tax is imposed on the use in this state as a consumer of any article of tangible personal property. Where an Oregon resident purchased an auto in Oregon and brought auto into Washington within ninety days of purchase and commencement of residence in Washington, the exemption from use tax in RCW 82.12.0251 is not applicable.

USE TAX -- TAX MEASURE -- VALUE OF THE ARTICLE USED -- FREE SAMPLES. The "value of the article used" for use tax purposes is determined as nearly as possible by the retail selling price of similar products. Where no retail selling price exists for a free sample product specially packaged as such, the value is to be determined by the total costs of production, plus costs of special packaging, research and development, and distribution to arrive as nearly as possible to the retail selling price.

USE TAX -- VALUE -- MANUFACTURER'S REBATE. A rebate given by the manufacturer, and assigned to a dealer by a purchaser, is part of the taxable value of the property, and subject to the Washington Use Tax.

USE TAX -- INTEREST -- ESTOPPEL -- MISINFORMATION FROM OTHER STATE AGENCIES. The Department of Revenue is not estopped from collecting taxes when the failure of a taxpayer to pay was due to misinformation supplied to the taxpayer by another state agency.

RETAIL SALE -- USE TAX -- LEASES -- INTERVENING USE -- YACHT -- STORAGE. The taxpayers purchased a yacht, without sales tax. They then stored it and eventually used it for both bare-boat charter leasing and pleasure. Use tax found to be due, because each lease payment represented a separate retail sale and personal use by the taxpayers between lease periods was intervening use: and because the storage preparatory to use was also intervening use.

MISCELLANEOUS: ABSURD RESULTS. Tax must be construed in such a way as to avoid absurd results

USE TAX -- LEASE -- APPORTIONMENT. Use tax is measured by the value of the article used. The use tax statute does not allow apportionment when a yacht is used partly for business (leasing) and partly for pleasure.

RETAIL SALES -- USE TAX -- EXEMPTION. One who purchases tangible personal property for the purpose of reselling it, without intervening use, is exempt from sales or use tax. An exemption in a tax statute must be strictly construed in favor of taxation.

RETAIL SALES -- USE TAX -- LEASES -- CHARTER -- BOAT -- INTERVENING USE: The taxpayer, a limited partnership, used a boat which was held out to the public for bare-boat charter leasing. The taxpayer also allowed the limited partners to use the boat without paying rental fees or sales tax. Use tax found to be due, because the partnership's and partners' use of the boat constituted intervening use.

USE TAX -- RESTRAINT ON INTERSTATE COMMERCE. The imposition of use tax on a boat is not an unreasonable restraint on interstate commerce so long as the four constitutional requirements are met: (1) nexus; (2) fair apportionment; (3) non-discriminatory; 4) related to services provided. UPS v. Dept. of Rev., 102 Wn.2d 355 ( 1984).

USE TAX -- PROMOTIONAL MATERIAL SENT BY OUT-OF-STATE TAXPAYER TO CUSTOMERS IN WASHINGTON. Taxpayer is not liable for use tax on promotional material such as catalogs and price lists which it sends from out of state directly to customers in Washington. Sears v. Dept. of Revenue, 97 Wn. 2d 260, 643 P.2d 884 (1982).

USE TAX -- EXEMPTION -- MOTOR VEHICLE -- ACQUIRE AND USE -- MINIMUM 90 DAYS -- DATE OF PURCHASE CONTRACT -- DATE OF DELIVERY -- DATE OF POSSESSION. There is an exemption from use tax if a bona fide resident of another state acquired and used a motor vehicle in the other state more than 90 days prior to establishing residence in this state. The minimum 90 day period commences running from the date of delivery/possession of the motor vehicle, not the date of the purchase contract ordering the vehicle.

USE TAX -- MEANING OF USE -- DOMINION OR CONTROL -- OTHER ACT PREPARATORY TO SUBSEQUENT ACTUAL USE. Use occurs when a person brings or puts into service an article of tangible personal property or by taking or assuming dominion or control over the article including installation, storage, withdrawal from storage, or any other act preparatory to subsequent actual use. Placing an order to purchase a motor vehicle by itself does not constitute an act preparatory to subsequent actual use because there has been no taking or assuming dominion or control over the vehicle.

TRADE-IN -- USE TAX -- RCW 82.12.010 -- RCW 82.12.020: The trade-in exclusion is applicable to the use tax imposed by RCW 82. 12.020.

USE TAX -- CREDITS -- RCW 82.12.035: No credits are available where the purchase occurs in the state of Oregon. Oregon does not impose a retail sales tax or use tax.

USE TAX -- EXEMPTION -- PRIVATE AUTOMOBILES -- RCW 82.12.0251: The use tax does not apply to a private automobile that is purchased and used by a nonresident more than 90 days before entering Washington.

RETAIL SALE -- RCW 82.04.050 -- RCW 82.08.020 -- USE TAX -- COMPLEMENTARY TAX -- SUPPLEMENTS SALES TAX: In Washington, all sales are deemed to be retail sales and the sales tax is applicable to each such sale. The use tax supplements the sales tax in situations where the retail sales tax has not been paid.

EXEMPTION -- PRIVATE AUTOMOBILE -- 90-DAY RULE -- RCW 82. 02.0251 -- RCW 82.12.035 -- CREDIT: If a person does not satisfy the 90-day rule of RCW 82.12.0251, he/she must pay use tax subject to the credit provisions of RCW 82.12.035.

USE TAX -- EXCLUSION -- RESALE CERTIFICATES -- SUBSTANCE OVER FORM. In determining tax liabilities under the law the Department of Revenue elevates substance over form but does not ignore the formal agreements, documents, and transactions which reveal the substantive benefits derived. One of the primary substantive effects of lease of tangible property to a registered business for its business use (bare-boat chartering) is the legal capacity of the business to purchase materials for resale through resale certificates, sans sales tax.

USE TAX -- LEASED MOBILE PROPERTY -- TAX EXCLUSION -- STATUTES -- CONSTRUCTION -- POPE & TALBOT V. REVENUE. The statutory tax imposing provisions of RCW 82.12.020 do not exclude leased mobile property regularly brought into this state for business use here. The decisions in Pope & Talbot v. Revenue does not apply to leased mobile property home based outside this state but regularly used here by a Washington located business.

USE TAX -- USE IN THIS STATE -- AIRPLANE -- ALSO USED IN ALASKA. The use tax is imposed on the use in this state as a consumer of any article of tangible property. Where Washington taxpayer corporation purchased an airplane in Washington without payment of sales tax, the taxable use of the airplane occurred in Washington when taxpayer exercised dominion and control over the airplane by flying it in Washington and storing it in Washington prior to subsequent actual use in Washington. The use tax is not barred by taxpayer's use of the airplane for four months annually in Alaska.

USE TAX -- TANGIBLE PERSONAL PROPERTY -- DONATED ITEMS -- COUPONS -- DISCOUNTS. "Coupons" that can be redeemed for a free item are not a "discount." The value of the item actually given for the coupon is a donation and its value is subject to use tax.

RETAIL SALES TAX -- USE TAX -- COLLECTION OF. RCW 82.08.050 provides that the Department has discretion to proceed directly against the buyer or the seller for collection of retail sales tax that is due. The use tax supplements the retail sales tax by imposing a tax of like amount upon the use within this state as a consumer of tangible personal property on which the retail sales tax was not paid.

USE TAX -- MEASURE OF TAX -- VALUE OF ARTICLE USED -- TOTAL OF CONSIDERATION -- RETAIL SELLING PRICE -- CREDITS PAID OR DELIVERED -- GRANT DELIVERED AS A CREDIT -- DISCOUNT. The measure of the use tax is the "value of the article used" which is the total of the consideration paid or given by the purchaser to the seller. In effect, where the article was purchased without payment of sales tax, it is the selling price that is the measure of the tax. The selling price includes money, credits, rights, or other property paid or delivered by a buyer to a seller.

Where taxpayer received a grant from the seller for participation in the seller's . . . campaign and the grant was used as a credit deducted from the seller's selling price, the amount of the grant is includible in the measure of the tax as part of total consideration paid. The grant was held not to be a discount which is a reduction of the seller's selling price before the sale is made. Furthermore, the taxpayer depreciated the article purchased on a cost basis which included the amount of the grant.

USE TAX -- CAPITAL ACQUISITIONS -- BUILDING IMPROVEMENTS -- TIME OF TAXABILITY. Use tax is due on capital acquisitions and building improvements as of the time the improvements are put to use.

SALES/USE TAX -- PAID TO ANOTHER STATE -- CREDIT FOR -- AUTOMOBILE. A credit for retail sales or use tax paid to another state on the purchase of an automobile is not available when the motor vehicle is used in Washington prior to the time that the tax is paid in the other state.

USE TAX -- MEASURE -- VALUE OF THE ARTICLE USED -- NO COMPARABLE RETAIL SELLING PRICE -- VALUE OF PRODUCTS -- LABOR AND OVERHEAD. Pots used in the aluminum smelting process and manufactured by the user are subject to use tax measured by the cost of materials and the value of labor and overhead utilized in manufacturing the pots. Pots are not available for sale so comparative pricing is impossible. In such cases the Department determines the value of the article used by the same method used to determine the value of products.

USE TAX -- LIABILITY. Persons who use articles on which no sales tax has been paid are liable for payment of use tax of a like amount unless such persons prove that they are exempt from liability for tax. Accord: Det. No. 87-354, 4 WTD 293 (1987).

USE TAX -- CREDIT -- SALES TAX PAID OUT OF STATE. In a gift situation for the donee to receive credit for sales tax paid in another jurisdiction, such tax must have been paid by either the present user or its donor. Here the tax on an automobile was paid by the donor's donor so the sales tax credit is disallowed because of a lack of privity.

USE TAX -- EXEMPTION -- NONRESIDENCY -- BURDEN OF PROOF. Persons claiming a statutory exemption from the use tax based on nonresidency in Washington have the burden of establishing that they are not residents here and are residents of another state. Burden not met where taxpayer fails to provide concrete proof of Oregon residency to controvert evidence of Washington residency.

USE TAX -- PURCHASE OF AUTOMOBILE IN OREGON -- AUTOMOBILE USED IN WASHINGTON. The use tax is imposed on the use of tangible personal property in Washington by a consumer. Where a Washington resident purchases a vehicle in Oregon and uses it in Washington, such use subjects the person to tax liability.

USE TAX -- DEFERRED SALES TAX -- LEASE -- SELLING PRICE -- VALUE OF ARTICLE USED . A lease of tangible personal property, wherein monthly payments are made, is not a single transaction, but a contract for a series of transactions. Each transaction (each monthly lease payment) represents a separate sale.

USE TAX -- LEASES -- VALUATION. The statute provides for a determination of value in leases when the consideration paid does not represent a reasonable rent. This determination is made at the commencement of the lease.

USE TAX -- CONSUMABLE SUPPLIES -- TEST PERIOD. A correlation generally exists between a taxpayer's purchases of consumable supplies and its income. Taxpayer may compute the amount of use tax owing for other periods where it believes test period is not representative of other periods. Use tax and/or deferred sales tax deleted on purchases which were not retail sales.

RETAIL SALES TAX -- USE TAX -- RESALE CERTIFICATE. Persons purchasing taxable items for their own use are required to pay sales tax at the time of the purchase or use tax at the time of the item is used. Taxpayer carries the burden of proving entitlement to exemption from taxability. Where a resale certificate is improperly used or where receipts are not produced showing separate statement of sales tax paid, taxpayer is liable for use tax on the items purchased.

MISCELLANEOUS: WAC 458 -- 12-010 -- USE TAX -- FIXTURES -- REAL PROPERTY -- PRINTING PRESSES. Real property tax regulations support a finding that printing presses attached to real property are fixtures.

USE TAX -- REALTY -- FIXTURES -- TEST. The department follows the common law rules for determining whether an item is a fixture of the realty or tangible personal property. Department of Revenue v. Boeing Co., 85 Wn.2d 663, (1975) The three key factors are (1) actual annexation, (2) application to use or purpose, and (3) intention to make a permanent part of the realty.

USE AND/OR DEFERRED SALES TAX -- PERIODICAL -- REAL ESTATE GUIDES -- PRINTING CHARGES. Printing charges for real estate guides given away free by the publisher to its readers found to be subject to use and/or deferred sales tax.

USE TAX -- RCW 82.04.050(1)(b) -- INGREDIENTS AND COMPONENTS -- REAL PROPERTY. Concrete form coating must be traceable as an ingredient or component of the finished structure to be excludable from retail sales tax or use tax.

USE TAX -- SUBCONTRACTORS -- CONSUMABLE SUPPLIES -- CONCRETE FORM COATING. Concrete form coating found to be consumed in the process of curing concrete after it was poured in the coated forms and not a component part of the finished structure.

USE TAX -- VALUE OF THE ARTICLE USED -- ETB 417.12.144 -- ETB 456.08.143. The use tax is imposed on the value of the property consumed. A publisher of advertising guides is the consumer of the guides, and is taxable for their value (cost), including the cost of the printer's services. The ETBs are not applicable to the value of a final printed product, but apply only to goods produced as an intermediate step in final production.

USE TAX -- INTERSTATE COMMERCE --"TRANSPORTATION FINALLY ENDED". The transportation of an item in interstate commerce ends when property is delivered in a state to a taxpayer or its agent. Where taxpayer has guides transported to this state, and later transmits them to distribution sites, the transportation ended when the items arrived in Washington subject to taxpayer's control. Accord : Chesapeake and Potomac Telephone Co. v. Comptroller, 528 A.2d 536 ( Md, 1987)

USE TAX -- CONSUMER -- DEFINITION. A consumer includes any person engaged in an activity taxable under the Service B&O tax.

CONSTITUTIONAL LAW -- FREEDOM OF SPEECH -- EQUAL PROTECTION -- DISCRIMINATORY BASIS -- USE TAX. The press is not immune from "generally applicable economic regulations." Subjecting a publication that is not sold to use tax is not discriminatory, because such a publication that is sold would be subject to the sales tax. The sales and use taxes are complementary. Accord: Minneapolis Star and Tribune Co., v. Minnesota Commissioner of Revenue, 75 L.Ed 2d 295, 302 (1983).

Use Tax -- Definition of Use -- Retail Selling Price. For purposes of the use tax, RCW 82.12.010(2) defines "use" to have its ordinary meaning and establishes that the value of the article used shall be determined as nearly as possible according to the retail selling price at place of use of similar products of like quality and character.

AGRICULTURAL EXEMPTION -- FEED -- USE TAX. The exemption provided in Rule 122 applies only to feed purchased or used in the production of agricultural products for wholesale sale. It does not apply to feed purchased or used for boarding horses, and it does not apply to feed purchased for horses held for retail sale.

USE TAX -- WATERCRAFT USED AS RESIDENCE --HOUSEHOLD GOODS -- PERSONAL EFFECTS. Where a taxpayer locates a watercraft purchased in another state upon the waters of the state of Washington and lives aboard the watercraft, the watercraft is not exempt from use tax pursuant to RCW 82.12.0251 (WAC 458-20-178(7)(C)) as household goods--personal effects.

Use Tax--Building Improvements--Tangible Personal Property--Documentation. Taxpayers are required to keep suitable records so that the Department of Revenue may verify reported tax liability. Where taxpayers made improvements and purchased tangible personal property to be used in their restaurant business, cancelled checks produced by taxpayers were not adequate for documenting whether sales tax had been paid and consequently, the taxpayers were liable for an assessment of the use tax on building improvements and consumables. RCW 82.32.070.

USE TAX -- PACKING MATERIALS -- PACKING OF FISH BY PERSONS OPERATING COLD STORAGE WAREHOUSES. Persons operating cold storage warehouses under the facts described in this case are not liable for use tax on their use of packing materials in which customers' fish are placed prior to withdrawal from storage. Such persons are in the same position as processors for hire.

USE AND/OR DEFERRED SALES TAX -- BAILMENT -- POSSESSION -- LACK OF USE. Equipment stored on taxpayer's premises which the taxpayer was temporarily prevented from using, because of a dispute with one of the owner/partners, was found to be not subject to use tax on a bailment theory.

USE AND/OR DEFERRED SALES TAX -- VALUE OF ARTICLE USED -- RETAIL SELLING PRICE -- BLUE BOOK VALUATION. Previously untaxed capital assets transferred to the corporation from a partnership were found subject to use and/or deferred sales tax on the value of the article used. Value of article used was determined by retail selling price of similar products of like quality and character as listed in an auctioneer's blue book.

USE AND/OR DEFERRED SALES TAX -- COMPUTATION OF USE TAX -- LOANER CARS -- VALUATION -- TRADE-IN. Use tax on "loaner cars" is to be computed in the same manner as with other full use service vehicles. First, the original set of "loaner cars" are subject to use tax on the full retail value. Second, when these original "loaner cars" are retired, a trade-in deduction is allowable against the use tax due on the new replacement "loaner cars."

USE TAX -- RETAIL SALES TAX -- UNREGISTERED VENDORS -- BUYER LIABILITY. A buyer who pays sales tax to an unregistered vendor is not liable to the department if the vendor fails to pay the tax to the state.

USE TAX. Use tax is imposed when an article is first used in the State of Washington.

SERVICE PROVIDERS -- AMBULANCE SERVICE -- USE TAX ON CONSUMABLE SUPPLIES. Persons providing ambulance services are subject to use tax on all supplies consumed in the performance of their services where retail sales tax has not been paid at the source. No exemption exists for consumable supplies used by service providers in the performance of medically-related services. ACCORD: Det. No. 87-333, 4 WTD 211 (1987)

USE TAX -- EXEMPTION -- "HOUSEHOLD GOODS, PERSONAL EFFECTS, AND PRIVATE AUTOMOBILES" -- AIRPLANE. Persons who move to Washington from another state will not be required to pay use tax on their "household goods, personal effects, and private automobiles" if they were acquired and used out-of-state more than ninety days prior to being brought into the State of Washington. An airplane does not come within this exemption.

USE TAX -- MEASURE OF -- PRINTED MATERIALS. A county government which makes and uses printed materials is liable for use tax on the total value of such materials which value includes labor and overhead costs expended in the printing thereof.

SALES/USE TAX -- CRANE -- RENTAL OF -- WITH OPERATOR -- "TRUE LEASE" -- DATE OF APPLICATION -- LOANED SERVANT. Leases with operator must be evaluated in terms of whether or not they are "true leases" starting July 1, 1987. There are eight factors, including that of loaned servant, to be considered in determining whether the lessor or the lessee has dominion and control of the equipment. Here, those factors preponderated in favor of control by the lessee.

USE AND/OR DEFERRED SALES TAX -- INTERVENING USE -- CAPITALIZATION IN ERROR -- PRESUMPTION OF USE. Where taxpayer purchased a construction crane which it capitalized and depreciated for two years, the crane was presumed to have been subjected to intervening use and subject to use and/or deferred sales tax.

USE TAX -- MANUFACTURING FOR OWN USE -- BONA FIDE SALE -- RETAIL SELLING PRICE -- ARMS LENGTH TRANSACTION -- VALUATION. Where the taxpayer manufactures molds for industrial use, a bona fide sale of the molds has not been made to the user of the item manufactured. Therefore use tax is computed at the retail selling price of similar products of like quality and character provided that such sales price results from an arms length transaction which is separately and independently negotiated.

USE TAX -- MEASURE OF TAX -- CONSUMER -- PROMOTIONAL MEALS. A hotel which gives away meals to promote its business is the consumer of such meals; use tax applies on the value of the meals which is the retail selling price.

USE TAX -- HOTEL RESERVATION SERVICE. The charge made for access to a hotel reservation service is not a charge made for the purchase of tangible personal property, but instead is a purchase of a service and not subject to use tax. Accord: 87-346, 4 WTD 267 (1987). THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 93-269ER, 14 WTD 153 (1995).

USE TAX -- TOOLING -- USE AS BAILEE. The use of tooling as a bailee is subject to use tax in situations where the bailor has not paid the use or sales tax on the items. When the items are used by the bailee before the sales tax is billed or paid by the owner, or where the bailor is not subject to such taxes, the use tax is due from the bailee on the reasonable rental value of the tooling.

USE TAX -- EXEMPTION -- JANITORIAL SERVICES -- SIDEWALK SWEEPING -- OBJECTIVE STANDARDS. Janitorial services for buildings which include picking up litter, sweeping or hosing dirt or debris from entryways and adjacent sidewalks or the removal of snow or ice from them by shoveling, sweeping or applying salt, sand or similar substances is exempt from the sales and use taxes.

SALES TAX -- RESALE CERTIFICATE -- PURCHASES FOR A DUAL PURPOSE. A Taxpayer who purchases items for both resale and consumption and gave a resale certificate for all purchases is liable for deferred sales tax on items that were not resold, but delivered to taxpayer in Washington.