WAC 193

ETB 527 - Merchandise Pickup Out of State Cancelled 07/17/02 AD 8193A.1 clarifies the conditions under which tax-reporting information provided in ETB 527 (subsequently ETA 527) applies.

Interstate Sales & DeliveriesCancelled 07/17/02 AD 8193A.2 clarifies interim instructions provided by Revenue Policy Memorandum (RPM) No. 89-1 regarding the taxability of interstate sales and deliveries.

Manufacturing Tax Prior to June 1, 1987 Cancelled 07/17/02 AD 8193A.3 was issued to explain how the Department will proceed with respect to applying the manufacturing B&O tax for periods prior to June 1, 1987 in light of the United States Supreme Court ruling in National Can Corp. v. Department of Rev., 109 Wn.2d 878 (1988), cert. den., 486 U.S. 1040, 108 S.Ct. 2030 (1988).

Taxability of Credit Bureau Services Cancelled 06/30/05.

Online Sales of Goods

Internet-based Businesses cancelled

"Extractor."

"Manufacturer."

"To manufacture."

"Engaging in business."

"In this state," "within this state".

Business and occupation tax imposed.

Tax upon extractors.

Tax on manufacturers.

Deductions--Nontaxable business.

Value of products, how determined.

Retail Sales Tax

Exemptions -- Sales of machinery and equipment for manufacturing, research and development, or a testing operation -- Labor and services for installation -- Exemption certificate -- Rules.

Exemptions -- Sales for use in states, territories, and possessions of the United States which are not contiguous to any other state.

Exemptions -- Sales to nonresidents of tangible personal property for use outside the state -- Proof of nonresident status -- Penalties.

Use Tax

Retailers to collect tax--Penalty.

Local Retail Sales and Use Taxes

Deficient tax or penalty payments--Notice--Interest--Limitations.

Inbound and outbound interstate sales of tangible personal property. Provides guidance on how Washington’s B&O tax and retail sales taxes apply to interstate sales of tangible personal property.

These rules all refer to resale certificates. Proposed action is to add standard language to recognize reseller permits for sales made on or after January 1, 2010.

Inbound and outbound interstate sales of tangible personal property. Effective 1/1/92

SERVICE CHARGES ON GOODS PURCHASED FOR EXPORT - he information in this document is unnecessary. WAC 458-20-193D (Transportation, communication, public utility activities, or other services in interstate or foreign commerce) provides the general principles used in the situation discussed in the ETA. Cancelled by ETA 2003 -0 6/30/99.

STORAGE AND HANDLING OF GRAIN FOR EXPORT - This contains inaccurate information. ETA 126 explains that the handling and storage of grain intended for export by a licensed public warehouse is subject to public utility tax. WAC 182 explains the tax-reporting responsibilities of warehouses and notes that there are no longer any warehouse businesses or operations subject to public utility tax. Cancelled effective 6/30/04

SALES OF FLOUR TO GOVERNMENT FOR EXPORT - This document identifies a situation in which the seller was unable to provide the documentation required to substantiate that the seller delivered goods into the export stream. A document explaining that a taxpayer must provide documentation as explained in Rule 193 is not needed. The documentary requirements are sufficiently addressed in WAC 193C. Cancelled effective 6/30/04.

RETENTION OF TITLE TO SECURE PAYMENT ON INTERSTATE SALES OF GOODS Cancelled 1/29/09. This ETA explains that a sale occurs when the possession of property is transferred to the buyer even though the seller retains title to goods for the sole purpose of securing payment. This subject is adequately addressed in WAC 458-20-193.

Cartage, storage and handling of goods moving in interstate commerce -These documents are no longer needed. WAC 458-20-193D (Transportation, communication, public utility activities, or other services in interstate and foreign commerce) sufficiently addresses the taxability of these activities. Cancelled by ETA 2003 -4s 09/14/2001

Local services connected with interstate transactions -These documents are no longer needed. WAC 458-20-193D (Transportation, communication, public utility activities, or other services in interstate and foreign commerce) sufficiently addresses the taxability of these activities. Cancelled by ETA 2003 -4s 09/14/2001

Sales to Nonresidents of Jurisdictions Imposing a Sales Tax of Less than Three Percent (Second Revision) RCW 82.08.0273 provides a retail sales tax exemption for sales of tangible personal property to certain nonresidents of Washington. ETA 2014 identifies the states, possessions, and provinces of Canada whose residents are eligible for this exemption. It provides examples of sales that are and are not eligible. This advisory also explains the seller's responsibility to examine proof of nonresidency and document the tax-exempt nature of a sale.

Sales to Nonresidents of Jurisdictions Imposing a Sales Tax of Less than Three Percent (Second Revision on 01/31/08)

WHERE INTERSTATE COMMERCE ENDS AND INTRASTATE COMMERCE BEGINS WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property) currently addresses this issue. Cancelled by ETA 2003 -0 6/30/99.

COMMISSIONS EARNED ON INTERSTATE SALES - Cancelled effective 1/30/06

INTERSTATE MAIL DELIVERY BY VENDOR OF GOODS SOLD Cancelled effective June 29, 2007. There is no need for this document.

FREIGHT FORWARDERS - Cancelled effective December 29, 2006 This document explains that income derived from freight forwarding activities is subject to B&O tax, even if associated with interstate or foreign commerce. This document is not needed as this issue is adequately addressed in WAC 458-20-193D.

Sales to nonresidents of jurisdictions imposing a sales tax of less than three percent

Sales to Nonresidents from Jurisdictions without a Sales Tax of Three Percent or More. Important Note About ETA 3054: The Skagit County Superior Court has issued a preliminary injunction requiring the Department of Revenue to advise retailers to not grant the nonresident sales tax exemption to residents of British Columbia, Nova Scotia, New Brunswick, Newfoundland and Labrador, Ontario, and Quebec, Canada. This advice will remain in effect pending the final determination of the pending litigation.

Sales to residents of states or possessions of the U.S., and territories or provinces of Canada, that do not impose a tax of at least three percent. RCW 82.08.0273 provides an exemption from the retail sales tax to certain nonresidents of Washington for purchases of tangible personal property, digital goods, and digital codes, for use outside this state.

(ETA 3054) Sales to nonresidents of states of possessions of the US, and territories or provinces of Canada, that do not impose a tax of at least three percent. This ETA explains the retail sales tax exemption provided by RCW 82.08.0273 to qualified nonresidents of Washington when purchasing tangible personal property, digital goods, and digital codes, for use outside of Washington. The Department has updated the ETA to recognize provisions of Senate Bill 6505, chapter 140, Laws of 2014. This legislation specifically excludes sales of marijuana from the exemption.

Receipt of Goods Through an Agent This ETA addresses when a shipping company can be an agent of the purchaser for purposes of receiving goods. The ETA is out of date and no longer has application today. The Department’s current interpretation and application of law in this area is contained in revised WAC 458-20-193.

Receipt of goods through an agent

Out-of-state activities related to performance of local installation contract

The applicability of the interstate commerce exemption to freight forwarders

Stimulating wholesale sales by promoting retail sales

SALES TO NONRESIDENTS (Seventh Revision) Cancelled by ETA 2014 and addressed in ETA 2014.

THE APPLICABILITY OF THE INTERSTATE COMMERCE EXEMPTION TO FREIGHT FORWARDERS Revised 2/2/09 See ETA 3149.2009

NEXUS PRESUMPTION -These documents are no longer needed. WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property), specifically subsection (7), and various WTDs issued by the Department (e.g., Det. 97-061, 18 WTD 211; Det 98-134, 18 WTD 085; Det. 97-235, 17 WTD 107; Det. 91-075, 10 WTD 429; Det. 88-219, 6 WTD 019; Det. 87-342, 4 WTD 229; Det. 86-286, 4 WTD 051) provide sufficient guidance in these areas. Cancelled by ETA 2003 -4s 09/14/01.

STIMULATING WHOLESALE SALES BY PROMOTING RETAIL SALES Revised 2/2/09 See ETA 3155.2009

NEXUS: EMPLOYEES OF SELLER'S AGENT -These documents are no longer needed. WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property), specifically subsection (7), and various WTDs issued by the Department (e.g., Det. 97-061, 18 WTD 211; Det 98-134, 18 WTD 085; Det. 97-235, 17 WTD 107; Det. 91-075, 10 WTD 429; Det. 88-219, 6 WTD 019; Det. 87-342, 4 WTD 229; Det. 86-286, 4 WTD 051) provide sufficient guidance in these areas. Cancelled by ETA 2003 -4s 09/14/01.

BUSINESS AND OCCUPATION TAX ON LOCAL SERVICES OF NONSELLING RESIDENT MANAGERS -These documents are no longer needed. WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property), specifically subsection (7), and various WTDs issued by the Department (e.g., Det. 97-061, 18 WTD 211; Det 98-134, 18 WTD 085; Det. 97-235, 17 WTD 107; Det. 91-075, 10 WTD 429; Det. 88-219, 6 WTD 019; Det. 87-342, 4 WTD 229; Det. 86-286, 4 WTD 051) provide sufficient guidance in these areas. Cancelled by ETA 2003 -4s 09/14/01.

LOCAL SALES TO WASHINGTON CUSTOMERS WHO "PICKUP" GOODS OUTSIDE THIS STAT The information is not a correct interpretation of the statutes. It cites a repealed rule (193A), and refers to a nonresident permit that is no longer in existence. Cancelled by ETA 2003 -0 6/30/99.

DELIVERY - GOODS ORIGINATE OUTSIDE WASHINGTON -This document provides tax-reporting information for certain interstate sales and deliveries completed prior to January 1, 1992. Readers are referred to WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property) for determining taxability on and after this date. This information is no longer needed because it addresses transactions outside the statutory claim period provided by RCW 82.32.050. Cancelled by ETA 2003 4s 09/14/01.

RECEIPT OF GOODS THROUGH AN AGENT Revised 2/2/09 See ETA 3091.2009

INTERSTATE COMMERCE, BUYER'S TRUCKS AS CARRIERS WAC 458-20-193 (Inbound and outbound interstate sales of tangible personal property) currently provides a more complete explanation of the delivery requirements with respect to interstate commerce.. Cancelled by ETA 2003 -0 6/30/99.

OUT-OF-STATE ACTIVITIES RELATED TO PERFORMANCE OF LOCAL INSTALLATION CONTRACT Revised 2/2/09 See ETA 3140.2009

Transfer of Firearms between States

Questions and Answers on Spirits Tax for Retailers

Foreign Diplomats Tax Exemption Program

Out-of-State Repair Business

Tax Reporting Changes for Linen and Uniform Supply Services

Tax Implications of Firearms transfers

Revision of Special Notice Previously Sent to Corporations Holding Nonresident Permits

"New Buyers" Retail Sales Tax Exemption Certificate

B&O Tax Reporting Requirement Continues After Business Activity Stops (Trailing Nexus)

Dairy Product Processors Receive B&O Tax Exemption

Sales Tax Sourcing for Direct Mail Sellers

Establishment of Retail Sales Tax Liability for Certain Sellers Registered Under the Streamlined Sales and Use Tax Agreement (SSUTA)

Claims of Constitutional Impairment of Contract made under Initiative 1183

Bottlers and Distributors Subject to Temporary Carbonated Beverage Tax

Foreign Diplomats Tax Exemption Program

Seafood Processors Receive B&O Tax Exemption

Use Tax on Out-of-State Repairs (Reissued June 2004)

Carbonated Beverage Tax Repealed

Foreign Diplomats Motor Vehicle Tax Exemption

Non-Resident Permits - Corporations

Foreign Diplomats Tax Exemption Program

The Streamlined Sales and Use Tax Agreement (SSUTA) Effective July 1, 2008

RULE 193B: BUSINESS AND OCCUPATION (B&O) TAX -- NEXUS -- OUT-OF- STATE SALES -- INSTALLATION SERVICES. Where an out-of-state seller sends its crew to Washington to install its products in this state, that activity provides sufficient nexus for B&O tax liability.

RULE 193A - SALES TAX - EXEMPTION - DELIVERY IN WASHINGTON OF PROPERTY FOR USE IN ALASKA. The taxpayer purchased a tractor in Mt. Vernon. He loaded it on his own flat bed trailer and hauled it to Alaska. Held sales tax applies to the transaction.Delivery took place in Washington and the exemption requirements for Alaska sales were not met.

Business and Occupation Tax -- Local Government -- Due Process.The assessment of a local government business and occupation tax does not satisfy due process unless the taxable event is identified in the tax enactment and occurs within the local government's territorial limits and there is a definite link or minimum connection between the local government and the taxable event.

Business and Occupation Tax -- Local Government -- Minimum Contacts. Imposing a business and occupation tax on the sales of a business located outside the taxing entity's jurisdiction does not satisfy the due process minimum contacts requirement if the activities performed by the business within the jurisdiction do not bear any fair and reasonable relation to the sales which are the subject of the tax. PETRICK, J., dissents by separate opinion.

RULE 193B:INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- B&O TAX -- NEXUS -- DISSOCIATION -- BURDENS OF PROOF.The state must establish jurisdiction to tax interstate sales by out-of-state sellers.Once established, the burden shifts to the seller to disassociate some or any of its sales from its significant instate activities. Accord:Chicago Bridge v. Dep't. of Revenue, 98 Wn.2d 814, 659 P.2d 463 (1983), Det.No. 86-295, 2 WTD 11 (1986), WAC 458-20-193B.

RULE 193B:B & O TAX -- INTERSTATE SALES -- NEXUS -- RESIDENT EMPLOYEES.Washington has sufficient local nexus to tax income from sales by an out-of-state vendor who sold its products to Washington distributors when the vendor had employees residing in Washington.The employees supported the distributors by giving technical advice.Accord: Standard Pressed Steel Co. v. Wash. Revenue Dept., 419 U.S. 560 (1975), Chicago Bridge v. Dep't. of Revenue, 98 Wn.2d 814, 659 P. 2d 463 (1983),Det. No. 88-368, 6 WTD 417 (1988).

RULE 193B:COLLECTING SALES/USE TAXES.The out-of-state vendor must collect sales/use taxes from its Washington customers where 1) the vendor owes B & O tax or 2) its salespersons/agents regularly solicit orders in Washington or 3) the vendor is registered with the Department of Revenue. Accord: Det. No. 87-69, 2 WTD 347 (1987).

RULE 193B:INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- B&O TAX -- NEXUS -- DISSOCIATION -- BURDENS OF PROOF.The state must establish jurisdiction to tax interstate sales by out-of-state sellers.Once established, the burden shifts to the seller to disassociate some or any of its sales from its significant instate activities.Accord:Chicago Bridge v. Dep't. of Revenue, 98 Wn.2d 814, 659 P.2d 463 (1983), Det. No. 87-69, 2 WTD 347 (1987), WAC 458- 20-193B.

RULES 193B:INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- NEXUS -- DELIVERY -- B&O TAX -- SALES TAX.For excise tax purposes the taxability of sales transactions is governed by the Revenue Act and the rules respecting that act (in this matter Rules 193B and 103), not the Uniform Commercial Code.Accord: Det. No. 86-161A, 2 WTD 397 (1987).

B & O TAX -- NEXUS -- LOCAL INSTALLATION.Where majority of sales activity is carried on outside Washington, but by separate contract instate installation of machinery is performed and a taxpayer visits potential customers, it is held all of taxpayer's sales into Washington are subject to B & O tax.Accord:Hayssen Manufacturing Co. v. Dept. of Rev., BTA Docket No. 29569 (1985).

RULE 193B:B & O TAX -- NEXUS -- BURDENS OF PROOF -- DISSOCIATION.Initially, the burden is on the state to show jurisdiction to tax interstate sales to Washington buyers. It meets the burden by showing the seller's local activity is significantly associated with the seller's ability to establish or maintain a market for sales into Washington.Once shown, the burden shifts to the seller to prove that some or any of its sales were disassociated from the significant local activity.Failure to disassociate subjects all of taxpayer's sales into Washington to B & O tax. Accord:Det.

RULE 193B:INTERSTATE SALES TO WASHINGTON CUSTOMERS -- NEXUS -- B & O TAX.The rule makes clear that soliciting sales or performing significant services to establish or maintain those sales in Washington is sufficient to establish a taxable presence or nexus with this state for B & O tax purposes.The rule applies even if the sales or service visits are infrequent.Accord: Det. 88-368, 6 WTD 417 (1988).

RULE 193B:B & O TAX -- SALES TAX -- REPAIRS.The rule considers repair of tangible personal property in the state to be an inherently local business activity subject to B & O tax.In every case where B & O tax is due, taxpayer is required to collect and remit sales tax, if applicable.

193B:SALES TAX -- REPAIRS -- LACK OF KNOWLEDGE.Taxpayer's lack of knowledge about collecting sales tax for repair work to machinery does not relieve it of its tax obligation.Accord:Det. 86-226, 1 WTD 67 (1986), Det. 86-278, 1 WTD 287 (1986).

RULE 193A:B&O TAX -- INTERSTATE EXEMPTION -- GOODS -- TRANSPORTATION OF -- BUYER'S OBLIGATION.Where an Alaskan buyer pays for lumber shipped by a Washington seller, a delivery bill of lading must show the seller as consignor and the buyer as consignee in order for the seller to be exempt of B&O tax.

RULE 193B -- B&O TAX -- NEXUS -- TERMINATION OF NEXUS ACTIVITY -- SUBSEQUENT SALES.Nexus exists where taxpayer conducts or has conducted activities in this state which are significantly associated with taxpayer's ability to establish and maintain a market for the sales.Once that nexus is established, the Department will presume that subsequent sales to the same buyers are related to that nexus and taxable even though the nexus-creating activity may be terminated. Accord:Det. No. 87-286, 4 WTD 51 (1987); citing Det. No. 86-295, 2 WTD 11 (1986), ETB 506.04.193B.

RULE 193B:B & O TAX -- INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- TELEPHONE SOLICITATION -- NEXUS.The taxpayer's out-of-state telephone solicitation of Washington customers, by itself, does not constitute a local activity which is significantly associated with its ability to establish or maintain a market in this state for its sales.Therefore, the taxpayer is not subject to the B&O tax.

RULE 193B: LITTER TAX -- OUT-OF-STATE WHOLESALER -- NEXUS.An out-of-state wholesaler who has nexus with Washington need not have a place of business in this state before the litter tax applies.

RULE 193B: B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- SOLICITATION BY INDEPENDENT CONTRACTORS -- NEXUS.An out-of-state manufacturer/seller has no in-state office, owns no property in this state and has no employees within this state, but solicits customers located in this state through independent contractors also located here.The in-state sales representatives are engaged in substantial activities creating a sufficient nexus with Washington to establish jurisdiction to assess B&O taxes against the taxpayer.Accord: Tyler Pipe Indus., Inc. v.

RULE 193B:INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DELIVERY --NEXUS.Where the contract of sale does not obligate the out-of-state seller to deliver goods to the buyer in Washington and that buyer either pays the carrier's freight charges from the out-of-state shipping point (F.O.B.

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- OUT-OF-STATE DELIVERY.When out-of-state seller ships its products for delivery to non-Washington locations as required by its sales contracts, the sales are not Washington sales and are not taxable by Washington even if the customers themselves are located in Washington.Accord: Final Det. 86-161A, 2 WTD 397 (1987).

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS-- DISASSOCIATION.An out-of-state business which has taxable nexus with Washington through out-of-state representatives visiting Washington customers may disassociate sales into this state where it has demonstrated that its instate activities are not significantly associated in any way with the sales.Accord:Det. 87-69, 2 WTD 347 ( 1987), Det. 88-144, 5 WTD 137 (1988), Norton Company v. Dept. of Revenue, 340 U.S. 534 (1951), Chicago Bridge v. Dept. of Revenue, 98 Wn.2d 814 (1983).

RULE 193B:INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DELIVERY --NEXUS.Where the contract of sale does not obligate the out-of-state seller to deliver goods to the buyer in Washington and that buyer either pays the carrier's freight charges from the out-of-state shipping point (F.O.B.

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NON -- SALES REPRESENTATIVES -- NEXUS. Visits (infrequent or otherwise) to Washington customers by non resident employees who are not salespersons, but who show new color and style product samples and explain new policies, constitute sufficient local nexus to allow B&O taxation of income from sales.Accord: Det. No. 88-368, 6 WTD 417 (1988).

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NON-SALES REPRESENTATIVES -- NEXUS -- B&O TAX. Visits (infrequent or otherwise) to Washington customers by nonresident employees who are not salespersons, but who monitor installations of equipment which the out-of-state taxpayer sold and give technical advice constitute sufficient local nexus to allow B&O taxation of income from sales.Accord:Det. No. 88-368, 6 WTD 417 (1988).

RULE 193B:INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DELIVERY -- NEXUS -- B&O TAX.Where the contract of sale does not obligate the out-of-state seller to deliver goods to the buyer in Washington and that buyer either pays the carrier's freight charges from the out-of-state shipping point (F.O.B.

RULE 193B:INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS--DISSOCIATION -- B&O TAX.An out-of-state business which has taxable nexus with Washington through out-of-state representatives visiting Washington customers may dissociate sales into this state where it has demonstrated that its instate activities are not significantly associated in any way with the sales.Accord:Det. 87-69, 2 WTD 347 (1987), Det. 88-144, 5 WTD 137 (1988), Norton Company v. Dept. of Revenue, 340 U.S. 534 (1951), Chicago Bridge v. Dept. of Revenue, 98 Wn.2d 814 (1983).

RULE 193B:INTERSTATE SALE OF GOODS TO WASHINGTON CUSTOMERS -- REGISTERED VENDORS -- SALES TAX -- REFUND.Rule 193B states retail sales tax must be collected and accounted for in every case where B&O tax is due, assuming it is a retail sale. Furthermore, all vendors who are registered with the Department of Revenue are required to collect use or sales tax from all persons to whom goods are sold for use in Washington irrespective of the absence of local activity on any given sale.A sales tax refund is owing only if the taxpayer can document out-of-state delivery.

RULE 193B:B&O TAX -- OUT-OF-STATE MAIL ORDER COMPANY -- PLACING CATALOGS IN WASHINGTON STORES.An out-of-state mail order company which otherwise is not liable for B&O tax becomes liable for the tax by placing its catalogs in retail stores in Washington for customer distribution.

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DELIVERY -- NEXUS. Where the contract of sale does not obligate the out of-state seller to deliver goods to the buyer in Washington and that buyer either pays the carriers freight charges from the out-of-state shipping point (F.O.B.

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS-- DISASSOCIATION.An out-of-state business which has taxable nexus with Washington through resident sales representatives may disassociate sales into this state where it has demonstrated that its instate activities are not significantly associated in any way with the sales.Accord:Det. No. 87-69, 2 WTD 347 (1987), Det. No. 88-144, 5 WTD 137 (1988).

RULE 193B: INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- OUT-OF-STATE DELIVERY. When out-of-state seller ships its products for delivery to non-Washington locations as required by its sales contracts, the sales are not Washington sales and are not taxable by Washington even if the customers themselves are located in Washington.Accord:Det. No. 86--161A, 2 WTD 397 (1987).

RULES 193A AND 193C:SALES AND DELIVERIES TO OUT-OF-STATE BUYERS -- FREIGHT COLLECT -- WHOLESALING B&0 TAX -- EXEMPTION.Seafood products sold by a Washington seller which are shipped freight collect or freight prepaid to out-of-state buyers and destinations are exempt from wholesaling B&O tax.Accord:Det. No. 89-355, 8 WTD 83 (1989).

RULE 193A:RETAIL SALES TAX -- INTERSTATE EXEMPTION & NONCONTIGUOUS STATES EXEMPTION -- DOCUMENTATION -- FREIGHT BILL.A freight bill or invoice issued by an interstate carrier that bills the taxpayer/shipper for transportation services from a point inside the state of Washington to a point outside of Washington is insufficient documentation to substantiate an interstate or noncontiguous state's retail sales tax exemption.

RULE 193B:INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DELIVERY -- F.O.B. ORIGIN, FREIGHT COLLECT -- NEXUS.Where the contract of sale does not obligate the out-of-state seller to deliver goods to the buyer in Washington and that buyer pays the carrier's freight costs from the out-of-state shipping point (F.O.B. origin, freight collect), the sale and delivery are deemed to have occurred out-of-state and not subject to the B&O tax even if there is general nexus between Washington and the out-of-state seller.

RULE 193A:OUT OF STATE SALES -- BLOOD -- SHIPPING CHARGES.Where taxpayer sells excess blood to an out-of-state fractionator, as long as it can show that the it was the consignor of the blood and the out-of-state customer was the consignee, it will be allowed the deduction for out-of-state sales.

RULE 193A:B&O TAX -- REPAIRING -- INSTALLING REPAIR PARTS -- SEPARATELY BILLED -- INTERSTATE DEDUCTION. Where out-of-state businesses ship property into Washington for repair, an in-state repair facility is not allowed an interstate deduction in respect to repair parts installed into the property during the repairing process and subsequently delivered to the customer at a point outside the state of Washington.

RULE 193B:NEXUS -- REPAIRS TO REAL PROPERTY --CONSTRUCTION ACTIVITIES -- OUT-OF-STATE PROVIDER. When an out-of-state taxpayer agrees to provide equipment and crews to perform repairs to real property in this state, the repairs are inherently local activities and subject to the taxing jurisdiction of the state of Washington. Chicago Bridge and Iron v. Department of Rev., 98 Wn.2d 814 (1983).

RULE 193B: NEXUS -- LEASED PROPERTY -- TAXABILITY -- CREWS PROVIDED BY LESSOR. When property is leased to a lessee who brings the property into this state, the out-of-state lessor is taxable with regard to the property when it was contemplated by both parties that the property would eventually be used in Washington.In addition, when the property is leased with a crew provided by the lessor, the presence of the crew in Washington provides a sufficient connection with the state for it to impose tax.Accord:Det. No. 87-171A, 5 WTD 283 (1988); Hayssen Manufacturing Company v.

RULE 193B: NEXUS -- LOCAL STOCK OF GOODS. Where out-of-state commodities trading corporation owns a stock of goods located in Washington State, the commodities trading corporation has sufficient nexus with Washington to support imposition of B&O tax on its sales.

RULE 193B:B&O TAX -- NEXUS -- DISSOCIATION OF -- FRANCHISED DEALERSHIPS -- PRE-DELIVERY PREPARATORY WORK. Dissociation not allowed where the taxpayer shipped automobiles to Washington franchised dealerships for pre-delivery preparatory work before delivering the vehicles to the customer.

RULE 193A:USE AND/OR DEFERRED RETAIL SALES TAX -- FOR-HIRE CARRIER -- AFFILIATED ENTITY. A separately-incorporated trucking company may be a for-hire carrier for purposes of Rule 193A and RPM 89-002 notwithstanding its affiliation to the taxpayer.F.I.D.PORTIONS OF THIS DETERMINATION WERE NOT PRECEDENTIAL AND HAVE NOT BEEN PUBLISHED.

RULE 193B -- B&O TAX -- NEXUS -- DISSOCIATION OF -- BURDEN OF PROOF. Claim of dissociation denied where the taxpayer failed to establish facts sufficient to allow dissociation of sales by other divisions.

RULES 193B:B&O TAX -- SELLING -- OUT-OF-STATE MANUFACTURE -- INSTALLATION BY SUBCONTRACTOR IN WASHINGTON. A foreign company will be taxable as a seller when it contracts with a Washington taxpayer to have its product-manufactured out of state - installed in this state.

RULES 193B AND 193C -- B&O TAX -- NEXUS -- IMPORT/EXPORT EXEMPTION. Where a [foreign] manufacturer sells airplane galleys to foreign airline carriers and has them assembled, delivered, and repaired in this state by its Washington affiliate, the selling activity is B&O taxable. The Washington manufacturer's activities in this state are sufficient to constitute nexus, and the galleys have been taken out of the unbroken stream of commerce. Accord:Det. No. 89-471, 8 WTD 251 (1989).

RULE 193B:SALES TAX -- USE TAX -- OREGON BUSINESS -- WASHINGTON REGISTRATION -- EFFECT OF. Even if a Washington-registered business sells to Washington customers from outside the state (Oregon) and can disassociate said sales for B&O tax purposes, it is still obligated to collect sales/use tax on the transactions. Accord:Det. 87-69, 2 WTD 347 (1987).

RULE 193B:B&O TAX -- DISASSOCIATION -- NATIONAL RETAILER -- OREGON STORES -- SALES BY. Sales by Oregon outlets of a national retailer to Washington customers may be disassociated from Washington sales, for B&O tax purposes, when the retailer demonstrates there was no participation in the sales by taxpayer representatives in Washington.

RULE 193:B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS -- DISASSOCIATION. An out-of-state business which has taxable nexus with Washington through a service representative who visits Washington customers may disassociate sales in this state where it has demonstrated that its instate activities are not significantly associated in any way with the sales.

RULE 193:B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS. The maintenance and servicing of equipment in Washington is a local activity. This local activity establishes nexus with the state and requires payment of B&O tax.

RULE 193:RETAIL SALES TAX -- FREIGHT CHARGES -- ADVANCES AND REIMBURSEMENTS. In general, shipping charges incurred by a retailer prior to the completion of the sale are part of the costs of doing business and cannot be deducted from the amount subject to retail sales tax.

B&O TAX -- NET INCOME TAX -- INTERSTATE COMMERCE -- IN-STATE SOLICITATION OF BUSINESS. The State Taxation of Income from Interstate Commerce Act of 1959, 15 U.S.C. 381, et seq., (Pub. L. No. 86-272) prohibits a state from imposing a net income tax on a business whose sole activity within a state is the solicitation of orders for goods to be delivered from outside the state.

RULE 193:B&O TAX -- NEXUS -- IN-STATE SOLICITATION OF BUSINESS. By way of administrative rule, the Department of Revenue has compiled a list of examples of what activities provide sufficient local nexus. Included within those examples is the in-state solicitation of orders by an employee or independent contractor.

B&O TAX -- COMMERCE CLAUSE -- NEXUS -- IN-STATE SOLICITATION OF BUSINESS. In general, the Commerce Clause requires, inter alia, that there be substantial nexus before the state can impose B&O taxes on an out-of-state business which delivers goods from outside the state.

RULE 193:WHOLESALING B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS. Out-of-state vendor's sales to Washington customers occurring January 1, 1992, and later are subject to Washington's taxes if the vendor has nexus with this state and the goods are received by the customers in this state.

RULES 193B AND 193:WHOLESALING B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- DISASSOCIATION. Out-of-state vendor is unable to dissociate sales to a Washington customer when the vendor has an instate sales and technical representative who was hired solely to maintain the vendor's existing sales base with that customer through regular visits and around-the-clock availability.Norton Co. v. Illinois Dept. of Revenue, 340 U.S. 534 (1951) and B.F. Goodrich Co. v. State, 38 Wn.2d 663, 231 P.2d 325 (1951) factually distinguished.

RULES 193B AND 193:WHOLESALING B&O TAX -- INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- SUBSTANTIAL NEXUS. Out-of-state vendor with a representative residing in Washington who solicits sales and provides technical advice on uses of vendor's products to instate customers has substantial nexus with Washington.

RULE 193B:RETAILING B&O TAX -- OUT-OF-STATE VENDOR -- WASHINGTON CUSTOMER -- DUE PROCESS -- NEXUS. Washington has sufficient nexus with the taxpayer and does not violate either the Due Process Clause or the Commerce Clause by assessing its retailing B&O tax against an out-of-state vendor who contracted to sell and deliver a vessel to a Washington customer when the vendor's officer and employees entered Washington to solicit sales, monitor construction of the vessel, and perform tests to ensure it met contractual performance standards before the sale was complete.

RULE 193:NEXUS - OIL EXCHANGES - INSPECTORS. Nexus found forDelivery of products into Washington to customers; Instantaneous possession of products purchased in Washington prior to their sale; and Independent inspectors hired to confirm quantity and quality of products purchased and sold in Washington.

B&O TAX -- INTERSTATE SALES -- INBOUND SALES -- PLACE OF SALE -- RECEIPT IN THIS STATE -- FREIGHT FORWARDER. Delivery to a Washington freight forwarder for shipment to Alaska customers was not subject to Washington's B&O tax where there was no evidence that the freight forwarder had express written authority from the buyer to accept or reject the goods while they were in Washington.

B&O TAX -- NEXUS -- DISASSOCIATION -- INDEPENDENT SOURCE. A taxpayer may be allowed to dissociated sales from its nexus creating activities if it can document that the customer relationship was derived from an exclusively independent source, and the local activity creating nexus was not significantly associated, in any way, with the sales transaction in question.

B&O TAX -- NEXUS -- DISASSOCIATION -- DOCUMENTATION. A nonresident manufacturer's request to dissociate telephone sales from the nexus-creating activity of its independent sales agents was disallowed where taxpayer failed to submit documentation establishing an independent source for telephone customer relationships, and also failed to document that the local activities of its independent sales agents were not significantly associated with those sales.

RULE 193:SUBSTANTIAL NEXUS. Substantial nexus, for commerce clause purposes, includes three factors:(1) An activity within the state attempting to impose taxes; (2) A physical presence related to the activity; and (3) The activity must be for the purpose of either entering or maintaining a position in the marketplace of the taxing state.

B&O TAX -- COMMERCE CLAUSE -- NEXUS -- TRADE SHOWS -- DEALER TRAINING. In general, the Commerce Clause requires, inter alia, that there be substantial nexus before the state can impose B&O taxes on an out-of-state business that delivers goods from outside the state.While a presence of the vendor in Washington is required for substantial nexus, it need not be substantial, but only demonstrably more than the "slightest presence."

INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS -- NEXUS -- DISASSOCIATION. An out-of-state business that has taxable nexus with Washington through out-of-state representatives visiting Washington customers may disassociate sales into this state where it demonstrates that its in-state activities are not significantly associated in any way with the sales.

B&O TAX -- COMMERCE CLAUSE -- NEXUS -- TRADE SHOWS -- DEALER TRAINING. When a taxpayer's in-state activities are significantly associated with its ability to establish and maintain a market in this state, substantial nexus is established. A taxpayer who provides dealers with in-state training and promotional services at in-state trade shows is engaged in activities that are significantly associated with its ability to maintain a market in this state.

B&O TAX -- NEXUS ESTABLISHED. The presence of a sales manager in Washington establishes nexus.

B&O TAX -- NEXUS DURATION. Once established, nexus continues throughout the statutory period for up to five years after the activity that established nexus ceased.

B&O TAX --NEXUS -- DISASSOCIATION -- PROOF. The taxpayer bears the burden of proof to disassociate telephone and mail order sales from the activities of an instate employee.The presence of a sales manager who may have been available to assist customers, resolve difficulties, or maintain goodwill will not be disassociated merely because the taxpayer is unaware of any contacts by the manager even if he does not earn a commission from pre-existing customers.

WHOLESALING B&O TAX -- OUT-OF-STATE VENDORS --INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- DELIVERY IN WASHINGTON. Goods sold by an out-of-state vendor to its Washington customers were delivered in Washington and, therefore, are considered Washington sales when the vendor bore the expense of the shipment, even though the goods were sold f.o.b. vendor's out-of-state plant. Taxpayers must meet the requirement of ETB 560 before the Department of Revenue will allow tax treatment similar to the taxpayer in PACCAR, Inc. v. Department of Rev.

B&O TAX DISASSOCIATION. Taxpayers have the burden to show that particular sales are disassociated from its nexus creating activity.Where the taxpayers nexus creating activity is directed to the taxpayers sole Washington customer, disassociation is not possible.

B&O TAX DELIVERY INTO THE STATE. The fact that sales are made F.O.B. sellers out-of-state plant is not controlling over whether a sale is completed in Washington for the purposes of the B&O tax. Uniform Commercial Code provisions do not control the place of sale for B&O tax purposes, rather Title 82 RCW and the administrative rules adopted thereunder control.

B&O TAX NEXUS CREATING ACTIVITY. Visits by an out-of-state sellers salesperson to its only in-state customer two or three times a year for the purpose of delivering updates to the sellers catalog and providing technical support to the in-state customer constitute sufficient nexus to impose the B&O tax on sales into the state.

OUT-OF-STATE SELLER -- NEXUS -- SIGNIFICANT SERVICES. One or two short, non-sales visits per year by employees of an out-of-state seller for purposes of cultivating goodwill, obtaining input on taxpayer products, addressing user concerns, resolving problems with accounts, and dispensing information about taxpayer products are significant enough to confer nexus.

B&O TAX - DELIVERY TO BUYERS OWN IN-STATE FREIGHT FORWARDING OFFICE. For the purposes of Rule 193, when delivery is made to a buyers Washington office, which office acts as the buyers own freight forwarder, that office cannot be considered an independent freight forwarder merely because buyers employees do not inspect the goods received there before forwarding them out-of-state.

USE TAX WHOLESALING B&O TAX -- VALIDITY OF RULE UNAUTHORIZED ACTS CONFLICT BETWEEN RULE AND STATUTE. Rule 193 does not conflict with RCW 82.12.040, and it is not invalid.RCW 82.12.040(1) applies to every person who has a place of business, maintains a stock of goods, or engages in business activities within this state, including every activity which is sufficient under the Constitution of the United States for this state to require collection of use tax.

B&O TAX -- CONSTITUTIONALITY OF STATUTES DUE PROCESS CLAUSE COMMERCE CLAUSE. The Department, as an administrative agency, does not have the authority to declare a statute to be unconstitutional. Only the courts have that power. For Due Process purposes, the state where the goods are ordered, delivered, received, accepted, and used has sufficient contact with and interest in these goods to tax them. Sales do not lack Commerce Clause nexus with Washington simply because title to the goods passes out-of-state.

WHOLESALING B&O TAX PLACE OF SALE RECEIPT OF GOODS UCC DEFINITIONS OF DELIVERY. Sales take place in Washington where an out-of-state manufacturer sells products to a Washington buyer under a contract which provides that the goods will be sent f.o.b. the taxpayers out-of-state manufacturing plant and that the products are subject to final inspection and acceptance by the buyer at the destination in Washington.

Out-of-state delivery of a product by a seller to a common carrier does not constitute out-of-state receipt by a purchaser.Uniform Commercial Code definitions of delivery are not controlling for B&O tax purposes. Instead, a Washington sale takes place when the goods are received by the buyer or its agent in this state.

It does not facially discriminate against interstate commerce. A Washington-based wholesaler pays the same B&O tax rate on its sales to Washington customers as an out-of-state vendor does on its wholesale sales to Washington customers.

CORPORATE NONRESIDENT PERMIT. Nonresidents, including nonresident corporations, of certain states are allowed to purchase items of tangible personal property in Washington without payment of retail sales tax. Prior to July 25, 1993, to qualify for the exemption, the nonresident purchaser was required to have a nonresident permit. After July 24, 1993, nonresident individuals are not required to have a nonresident permit, but nonresident corporations are.

INTERSTATE SALES ACCEPTANCE IN WASHINGTON CONTRACT LANGUAGE. Goods are accepted in Washington where the contract between the buyer and the out-of-state seller expressly states that products shall be subject to final inspection and acceptance by the buyer at the buyer's Washington facility and inspection or acceptance in Washington actually occurs, notwithstanding any payment or prior inspection out-of state.

INTERSTATE SALES QUALITY CONTROL DISTINGUISHED FROM ACCEPTANCE. An out-of-state inspection of goods for quality and even acknowledgement that the goods are acceptable are not the same as final acceptance and first possession of the goods themselves.

B&O TAX NEXUS - IN-STATE SOLICITATION OF BUSINESS -DISASSOCIATION: A taxpayer may not disassociate a sale for business and occupation tax purposes for a period up to five years due to its prior nexus-creating activities even if a visit to the customer was not necessary.

B&O TAX NEXUS IN-STATE SOLICITATION OF BUSINESS. Washington has substantial nexus with an out-of-state furniture manufacturer that employs independent contractors to solicit sales of its products in Washington and, therefore, may impose the business and occupation tax on the manufacturers gross proceeds from those sales.

MANUFACTURING MACHINERY AND EQUIPMENT EXEMPTION RECEIPT BEFORE AND AFTER EFFECTIVE DATE OF EXEMPTION. When a taxpayer purchases machinery and/or equipment that qualifies for the manufacturing machinery and equipment exemption from the retail sales and use taxes and receives a portion of the machinery and equipment before the effective date of the exemption (July 1, 1995) and a portion after the effective date, only the portion received after the effective date qualifies for the exemption.

B&O TAX NEXUS TRAINED CLIENT EMPLOYEES AGENTS-- CONTRACTUAL RESPONSIBILITIES. Where a management consultant firm trains client employees to train other client employees on management . . . concepts and also enters into a written agreement with those Trainers, conferring upon them certain rights and responsibilities, the training activities of the Trainers is sufficient to establish nexus between Washington and the out-of-state firm.

RETAIL SALES TAX EXEMPTION SALES OF TANGIBLE PERSONAL PROPERTY TO NONRESIDENTS. Retail vendors of tangible personal property in Washington are permitted not to collect sales tax from certain nonresidents of Washington providing the vendors maintain proper records for each nontaxable sale that show the type of proof of identification the vendors accepted from their nonresident customers.

B&O TAX -- COMMERCE CLAUSE -- NEXUS -- TRADE SHOWS -- DEALER TRAINING. The Commerce Clause requires, inter alia, that there be substantial nexus before the state can impose B&O taxes on an out-of-state business. When a taxpayers in-state activities are significantly associated with its ability to establish and maintain a market in this state, substantial nexus is established.

B&O TAX DUE PROCESS CLAUSE RATIONAL RELATION -- TRADE SHOWS -- DEALER TRAINING. In addition to some minimal connection or nexus between the interstate activities and the taxing state, there must be a rational relation between the income attributed to the state and the intrastate value of the enterprise. Washingtons B&O tax by its nature is proportioned to in-state activities, because it is collected only upon the gross proceeds of sales in Washington.

B&O TAX -- INTERSTATE DEDUCTION --PACCAR -- ETB 560. An out-of-state manufacturer was not entitled to a refund of selling B&O taxes previously paid on sales of goods shipped from its out-of-state plant when the good were sold F.O.B. shipping point and shipped freight pre-paid.

RULE 193B: DISSOCIATION - ORIGIN OF GOODS - DESTINATION OF GOODS. Sales may be dissociated only where goods are shipped directly from a point outside this state. When goods are shipped first to the out-of-state seller's instate facilities prior to ultimate delivery to the buyer in this state, delivery of the goods is made from a local stock of goods of the seller in this state.Furthermore, it cannot be said that there has been no participation whatever inthis state by the seller's local place of business.

RULE 193B: NEXUS - DISSOCIATION - MULTIPLE SALES. When out-of-state seller makes multiple sales to a buyer in this state and business and occupation (B & O) tax is assessed on the first sale because there is sufficient nexus the Department will presume that subsequent sales to the same buyer are sufficiently related to the first sale and tax them as well; however, the presumption is rebutted upon showing that subsequent sales are totally unrelated (i.e. dissociated) from the initial sale.

RULE 193B:B&O TAX -- INTERSTATE COMMERCE -- NEXUS -- FOOD PRODUCTS-- MAIL ORDER SALES. Mail order sales of food products to persons in this state are subject to the retailing B&O tax if the seller has engaged in any activities in this state which are significantly associated with its ability to establish or maintain a market in this state for the sales.Sufficient local nexus exists where the seller's Washington outlet receives the orders or packages and ships the orders.

RULE 193B:B&O TAX -- INTERSTATE COMMERCE -- NEXUS -- MAIL ORDER SALES -- DISSOCIATION.To avoid taxation, the out-of-state seller must sustain the burden of showing the sales at issue are dissociated from the seller's in-state activities. Norton Co. v. Department of Revenue cited.

RULE 193B:NEXUS -- dissociation -- B&O TAX -- RETAIL SALES TAX -- USE TAX.An out-of-state business which is registered in Washington and has a resident agent here is required to collect retail sales tax on all retail sales. B&O tax is due on all sales, except those which can be disassociated.

RULE 193B:SALES OF GOODS ORIGINATING IN OTHER STATES -- NEXUS -- PLACE OF DELIVERY. Out-of-state sellers with presence in this state (nexus) who are themselves obligated to get the goods sold to buyers within this state are subject to B&O tax upon such sales.

RULE 193B:DELIVERY -- RISK OF LOSS -- TRANSFER OF POSSESSION. Delivery of physical possession of goods sold, to the buyer in this state is dispositive of the question where a sale occurs for tax purposes, not the fact that "risk of loss" may pass to the buyer outside this stat

RULE 193B:B&O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- DUE PROCESS -- NEXUS -- FACTORS DETERMINING. The crucial factor governing nexus is whether the activities performed in this state on behalf of the taxpayer are significantly associated with the taxpayer's ability to establish and maintain a market in this state for the sales.

RULE 193B: B&O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- DUE PROCESS -- NEXUS -- WASHINGTON FRANCHISEE AS LOCAL OUTLET. A corporation that approaches a market through local outlets is distinguishable from a corporation approaching a market through solicitors only or one whose only connection with the customers in the state is by common carrier or mail. Services provided by a local franchisee can be decisive in establishing and holding a market for the franchise products.

RULE 193B:B & O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- DUE PROCESS -- DIVISIONAL NEXUS -- AFFILIATED CORPORATION AS TAXPAYER'S REPRESENTATIVE -- DISSOCIATION.

RULE 193B:B & O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- NEXUS -- FRANCHISE PRODUCT -- FRANCHISOR'S ACTIVITIES CREATING MARKET. A franchisor corporation creates a market for franchise products by establishing franchises, providing training programs, management advice, marketing surveys, newspaper and network advertising. A franchisee and franchisor have a community interest in selling trademarked goods and services.

RULE 193B:B&O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- VALIDITY OF TAX. A state tax on interstate commerce is valid if it meets the four requirements set forth in Complete Auto Transit, Inc. v. Brady.

WHOLESALING B&O TAX -- PLACE OF SALE -- RECEIPT OF GOODS -- QUALITY ASSURANCE PROGRAMS DISTINGUISHED FROM ACCEPTANCE. Wheretaxpayers personnel inspect goods at the taxpayer's out of state facilities on behalf of the buyer to satisfy governmental regulations regarding quality assurance, such inspection and subsequent shipment of goods do not constitute the acceptance of goods by the buyers agent out of state so as to make such sales out-of-state sales.

INTERSTATE SALES -- ACCEPTANCE IN WASHINGTON -- CONTRACT LANGUAGE. Goods are accepted in Washington if the contract between the buyer and the out-of-state seller expressly states that products shall be subject to final inspection and acceptance by the buyer at the buyer's Washington facility . . ., notwithstanding any payment or prior inspection out-of state.Accord: Det. No. 99-216E, 18 WTD 377 (1999).

WHOLESALING B&O TAX -- PLACE OF SALE -- RECEIPT OF GOODS -- UCC DEFINITIONS OF DELIVERY. Sales take place in Washington where an out-of-state manufacturer sells products to a Washington buyer under a contract which provides that the goods will be sent f.o.b. the taxpayers out-of-state manufacturing plant and that the products are subject to final inspection and acceptance by the buyer at the destination in Washington. Transfer of title is not dispositive for B&O tax purposes.

RETAIL SALES TAX -- GOODS DESTINED FOR USE IN NONCONTIGUOUS STATE -- COMPLIANCE -- DELIVERY AND DOCUMENTATION. The RCW 82.08.0269 noncontiguous state exemption is available only to those who comply with the delivery and documentation provisions set forth in Rule 193(6)(c).

RETAIL SALES TAX -- GOODS DESTINED FOR USE IN NONCONTIGUOUS STATE -- DELIVERY OPTIONS. For purposes of the RCW 82.08.0269 noncontiguous state exemption, delivery may be made not only to a "for-hire" carrier, but also to the purchaser's dock, airport, depot, warehouse, or receiving terminal in this state "when the circumstances are such that it is reasonably certain that the goods will be transported directly to their place of ultimate use." [Overruling Det. No. 87-166, 3 WTD 53 (1987)]

B&O TAX -- SUBSTANTIAL NEXUS OTHER REPRESENTATIVE INDEPENDENT DISTRIBUTOR SALES FORCE RECRUITMENT AND TRAINING OF. Where an out-of-state manufacturer paid commissions to its Washington independent distributors based on the sales made by new distributors recruited and trained by each Washington distributor, nexus was sustained. The Washington distributors activities of recruiting, training and motivating new independent distributors was found to be significant services performed on behalf of the out-of-state manufacturer in establishing and maintaining a market within the state.

B&O TAX -- SERVICES TAXABLE UNDER RCW 82.04.290 -- NEXUS. Rule 194, rather than Rule 193, addresses the taxation of service-taxable income of a person doing business both inside and outside the state. Nexus examples in Rule 193 should not be relied upon to determine whether a taxpayer who engages in both sales activity and discrete service activity has sufficient nexus with a state for the state to tax its service income.

SERVICES TAXABLE UNDER RCW 82.04.290 -- NEXUS. Conducting an annual industry convention or seminar as a discrete business activity, for which the taxpayer charges attendees a fee, generally creates nexus with the host state to tax the fee income.

B&O TAX--DISSOCIATION. Out-of-state taxpayer which maintains warranty service center for goods it sells in Washington cannot show that such centers are not significantly associated in any way with sales of such goods, including sales by national accounts.Distinguishing Norton Co. v. Department of Revenue.

NEXUS: B&O TAX -- SALES TAX EMPLOYEES CONSULTING. Employees who regularly visit Washington customers to sell software and provide consulting services, which enable the customers to access the taxpayers web-site, provide nexus for Washington to tax the web-site access charges.

B&O TAX DISCRIMINATION EXEMPTION FOR DIRECT SELLERS. Washingtons tax structure does not discriminate against interstate commerce. If anything, a potential tax benefit is provided to the out-of-state firm using a direct sellers representative, since no equivalent is granted to a Washington-based seller of goods in the home or non-permanent retail locations.

B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON. When a truck or trailer is leased to motor carriers, the lessor may claim an interstate sales deduction against retailing B&O tax for the amount of the lease income attributable to the actual out-of-state use of the vehicles and trailers. This deduction may be taken even if the vehicle is not used substantially in interstate hauls for hire.

B&O TAX -- VEHICLE/TRAILER LEASE -- LEASE PAYMENTS GENERATED OUTSIDE WASHINGTON. Lease payments generating income for a Washington district of a vehicle/trailer lessor are not taxable in Washington to the extent the use of the vehicles or trailers are used outside of Washington.

B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON. Retailing B&O tax liability may be reduced by an interstate sales deduction if adequate records are maintained to substantiate the amount of use claimed outside this state.

B&O TAX -- LESSOR -- VEHICLES/TRAILERS -- USE OUTSIDE WASHINGTON -- VEHICLE REGISTRATION FEE. Because a passed-on charge representing the vehicle registration fee is considered as part of the lessee's lease payment, it is subject to an interstate commerce deduction for vehicle usage outside Washington just as normal lease payments are.

B&O TAX -- LESSOR -- TRUCKS/TRAILERS -- USE INSIDE AND OUTSIDE OF WASHINGTON. When a truck or trailer is leased to a person other than a motor carrier, the result is the same as for motor carriers. The taxable incident takes place in this state when the property is "used" in this state by the lessee.

B&O TAX -- SUBSTANTIAL NEXUS -- MINIMUM CONTACTS -- INDEPENDENT CONTRACTORS -- SOLICITATION OF SALES. An out-of-state manufacturer was found to have substantial nexus with Washington where it solicited sales within the state of Washington through the use of independent contractors and employees.

RETAIL SALESTAX -- EXEMPTION -- VESSEL -- REPAIRS MADE IN WASHINGTON -- OUT OF STATE DELIVERY. Taxpayer failed to submit sufficient evidence to sustain its argument that its vessel had been delivered to an out-of-state port after its repair in Washington.

RETAIL SALES TAX NONRESIDENT EXEMPTION RECORDS. Taxpayers must maintain records required under RCW 82.08.0273 for each nontaxable sale to nonresidents to qualify for that statutory exemption.

B&O TAX NEXUS DISSOCIATION INDEPENDENT SOURCE. For a taxpayer to dissociate sales from its nexus creating activities in Washington, it must document that those sales are derived from an exclusively independent source and are not significantly associated, in any way, with any of the taxpayers in-state activities that establish or maintain a market for its products.

B&O TAX NEXUS DISSOCIATION BRAND NAME PRODUCTS. An out-of-state taxpayer with taxing nexus in Washington cannot dissociateselect sales of brand name products where the select sales are made pursuant to sales contracts negotiated and executed outside of Washington because the taxpayer cannot prove that the select sales are not significantly associated in any way with its in-state promotion and support activities for these brand name products.

NEXUS DROP SHIPMENTS STOCK OF GOODS. A taxpayer has nexus with Washington State where it maintains a stock of goods in Washington for distribution to its customers.Maintenance of a stock of goods is not the same as a drop shipment, because the latter involves a taxpayer who receives an order from its customer for certain items, places the order with its supplier for the items, and the supplier delivers the items directly to the taxpayers customer.

B&O TAX SUBSTANTIAL NEXUS INDEPENDENT CONTRACTOR CUSTOMER ASSISTANCE. Sending an independent contractor to a customers plant in Washington to assist the customer in making certain the taxpayers product will fit plant configuration and to assemble examples for the customers assemblers to follow, when the customer potentially has an ongoing or recurring requirement for the taxpayers products, is sufficient contact to establish nexus to tax the taxpayers sales into the state.

RETAIL SALES TAX INTERSTATE FUEL. Washington dock sales of fuel pumped into the fuel tanks of nonresidents vessels motoring to destinations outside of Washington is not exempt from sales tax because the fuel is first substantially used to power the vessels in Washington waters.

INTERSTATE LEASES -- NEXUS. Washington has jurisdiction to tax an out-of-state lessors receipts from the lease of tangible personal property used in this state where the lease or the parties to the lease contemplate that the lessors property will be principally stored and substantially used in Washington by a Washington consumer.

INTERSTATE LEASES -- NEXUS. Washington has jurisdiction to tax an out-of-state lessors receipts from the lease of tangible personal property used in this state where the lease or the parties to the lease contemplate that the lessors property will be principally stored and substantially used in Washington by a Washington consumer.

B&O TAX -- SUBSTANTIAL NEXUS ONE OR TWO BRIEF VISITS ANNUALLY TO WHOLESALE DISTRIBUTOR. One or two brief visits per year by an out-of-state manufacturer to its Washington wholesale distributor, for the purpose of presenting new or existing products and demonstrating use of products, establish substantial nexus. They are product-oriented visits for the purpose of creating or maintaining a customer base in Washington.

RCW 82.24.020, RCW 82.24.080, RCW 82.12.020: CIGARETTE TAX USE TAX FIRST POSSESSION USE. Where a taxpayer purchased cigarettes from an out-of-state vendor and was the first possessor of the cigarettes in Washington, he is liable for the cigarette tax.Where a taxpayer used cigarettes in Washington and did not pay retail sales tax on the purchase of the cigarettes, he is liable for use tax.

RETAIL SALES TAX EXEMPTION SALES TO RESIDENTS OF STATES THAT IMPOSE SALES TAX OF LESS THAN 3%. BURDEN OF PROOF. The exemption for sales to residents of states that impose sales tax of less than 3% is limited to purchasers who are bona fide residences of one of the states, possessions, or Provinces of Canada listed in ETA 2014. Where the evidence is conflicting as to whether the purchaser is a resident of a qualifying state, possession, or Province, the exemption must be denied.

RETAIL SALES TAX EXEMPTION SALES OF WATERCRAFT TO NONRESIDENTS FOR USE OUTSIDE THE STATE APPLICABLE WATERCRAFT PROOF REQUIRED. The exemption for sales of watercraft to nonresidents for use outside the state is limited to sales of watercraft that require either (1) U.S. Coast Guard registration, or (2) registration with the state in which the vessel will be principally used if that state has assumed the registration and numbering function under the Federal Boating Act of 1958.

RETAIL SALES TAX EXEMPTION SALES OF MOTOR VEHICLES TO NONRESIDENTS FOR USE OUTSIDE THE STATE PROOF REQUIRED.

Rule 193; ETA 56: B&O TAX -- INBOUND INTERSTATE SALES -- AGENCY -- FORM OVER SUBSTANCE. Sales of goods to purchasers in this state were taxable in this state even though the purchasers gave a for-hire carrier written authority to accept the goods at an out-of-state location. The mere giving to the for-hire carrier written authority to accept the goods at an out-of-state location, without some further act of acceptance, is not considered receipt by the purchaser or the purchaser's agent at that location.

Rule 193: B&O TAX – SUBSTANTIAL NEXUS – AFFILIATED CORPORATION AS TAXPAYER’S REPRESENTATIVE. In order for the activities of an in-state affiliate to establish nexus for an out-of-state mail order company, the in-state affiliate must act on the out-of-state company’s behalf as an agent or representative, and the activity must be significantly associated with the out-of-state company’s ability to establish or maintain a market in Washington for its sales.

RULE 193B:B&O TAX -- LEASE PAYMENTS -- OUT OF STATE LESSOR -- DUE PROCESS NEXUS. The presence of leased property in this state, used by the lessees in their business, constitutes sufficient nexus to support imposition of this state's B&O tax on the lessor. The connection between the taxing state and the out-of-state taxpayer necessary to establish nexus is an economic rather than a physical relationship.

RULE 193B:RETAIL SALES TAX/USE TAX -- OUT-OF-STATE LESSOR. Out-of-state lessors are required to collect and remit Washington's retail sales tax or use tax if they regularly engage in the leasing of property located within this state.

RULE 193B:B&O TAX -- LEASE PAYMENTS -- OUT-OF-STATE LESSOR -- ETBs 384 and 447. Persons who lease tangible personal property for use in this state are subject to the state's B&O tax upon the gross proceeds from such rentals, even if the lease agreement was consummated outside this state, and the lessor maintains no place of business, employees, or other business establishment in the state.

RULE 193B:B&O TAX -- LEASED PROPERTY USED IN INTERSTATE COMMERCE -- COLUMBIA RIVER -- APPORTIONMENT -- BURDEN OF PROOF. A tax on the lessor's income from lease payment for barges used by the lessee in interstate commerce is valid where the assessment was apportioned so as to tax only the portion of the use in Washington's territorial waters. The burden is on the taxpayer to show the apportionment is unreasonable.

B&O TAX -- WHOLESALING -- EXEMPTION -- INTERSTATE SALE -- DELIVERY TO FREIGHT FORWARDER. When a seller delivers sold goods to a freight forwarder hired by the seller for delivery to an out-of-state buyer's location, the sale is exempt from B&O tax provided there was an agreement with the buyer to make such delivery and documentary evidence (bill of lading, contract of carriage, etc.) retained by the seller showing that delivery was in fact made to the buyer outside this state.

B&O TAX -- WHOLESALING -- INTERSTATE SALE -- CARRIER AS AGENT FOR THE SELLER -- RISK AND EXPENSE OF THE SELLER. There is a presumption that the party bearing the "risk and expense" of the shipment is the one for whom the carrier acts as agent.Shipment by the seller on a "freight collect" basis does not make the seller's selected carrier an agent of the buyer.Whether the seller prepays the freight charge or has his carrier collect the freight charges from the buyer, the carrier is acting as agent on behalf of the seller in effecting an out-of-state delivery.

THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 00-152, 20 WTD 507 (2001).

RULE 193A:RETAIL SALES TAX -- EXEMPTION INTERSTATE SALES -- DELIVERY OUT OF STATE -- PROOF OF. Sale of equipment to Idaho purchaser held exempt from retail sales tax where sales invoice stated equipment was delivered by the taxpayer to the purchaser out of state, taxpayer's president testified he personally accompanied the delivery of the equipment to the out-of-state purchaser, and the taxpayer's records included the purchaser's affidavit that the propertywas purchased for use outside this state and would not be used in Washington.

RULE 193A:RETAIL SALES TAX -- EXEMPTION -- DELIVERY IN WASHINGTON OF PROPERTY FOR USE IN ALASKA --ETBs 93 and 161. Sale of equipment to Alaska purchaser for use outside the state is subject to retail sales tax if delivery is made to the out-of-state buyer or the buyer's agent in Washington. Accord: D. 1 WTD 37 (1986).

RULE 193D:MOTOR TRANSPORTATION -- PUBLIC UTILITY TAX -- EXEMPTION -- INTERSTATE COMMERCE. A trucker who is hired and paid by a broker to haul goods from shipside in one city in Washington, to another city here, is not entitled to a deduction for interstate hauling, where there is no through bill of lading.

Rule 193: B&O TAX - RETAIL SALES TAX - NEXUS - AFFILIATED CORPORATION AS TAXPAYER'S REPRESENTATIVE. An out-of-state mail order retailer was found to have substantial nexus with Washington where an in-state affiliate sold gift cards to customers that could be used to place catalog orders, distributed the out-of-state company's catalogs, and assisted the out-of-state company's customers. The in-state affiliate's activities were significantly associated with the out-of-state company's ability to establish and maintain a market in this state and therefore create nexus.

Rule 193: B&O TAX - RETAIL SALES TAX - SUBSTANTIAL NEXUS-SOLICITATION OF SALES. An out-of-state seller's two visits to a buyer in Washington were not associated in any way with its ability to establish and maintain a market for its product in Washington. Rather, those visits were for the purpose of making wholesale sales of product to the buyer, delivered outside the state, for sale at retail at the buyer's locations outside the state.

RCW 82.08.020; RCW 82.08.0273: RETAIL SALES TAX - EXEMPTION FOR SALES TO NONRESIDENTS FOR USE OUTSIDE OF WASHINGTON. Retailer is liable for retail sales tax on sales to alleged nonresidents because it failed to maintain records to establish the purchasers’ residency.

RCW 82.04.260: B&O TAX - EXEMPTION - INTERNATIONAL FREIGHT BROKERING OR FORWARDING. In order to qualify for the lower referential tax rate under RCW 82.04.260, Taxpayer must show that it engaged in international freight brokering or forwarding. While Taxpayer may have provided documentation of freight forwarding and freight brokering activities; it has failed to show that it was engaged in those activities internationally.

RCW 82.08.0273; ETA 3054.2011: RETAIL SALES TAX - NONRESIDENT EXEMPTION - RECORDS. Taxpayers must maintain records required under RCW 82.08.0273 for each nontaxable sale to nonresidents to qualify for the statutory exemption.

RCW 82.08.020; RCW 82.04.200; CONST. ART. XXIV, § 1: RETAIL SALES TAX - SALE OF A MARINE VESSEL - WITHIN THIS STATE - NORTHERN BOUNDARY - STRAIT OF JUAN DE FUCA. The Washington State Constitution extends Washington’s northern boundary to the midchannel of the Strait of Juan de Fuca at a point equidistant between Vancouver Island in British Columbia and the lands of Washington State.

RCW 82.32.730: RETAIL SALE TAX - STREAMLINED SALES TAX (SST) - DESTINATION-BASED SOURCING. Under the Streamlined Sales and Use Tax Agreement, Washington sources the sales of tangible personal property or retail-taxable services to the location where such property or services are received by the purchaser. Sales of leased charter vessels from a location in Washington, where the vessel is to be used both within and outside of Washington, are sourced to the Washington location where those vessels are leased and received by the purchaser.

RULE 193; RCW 82.04.067: NEXUS. Taxable nexus is created by a taxpayer’s representatives making four visits a year to trade shows in Washington, when those representatives displayed products, made contact with potential buyers, discussed its product models with potential buyers, and distributed catalogs. Those activities are significantly associated with establishing or maintaining a market for the sales of the taxpayer’s products in Washington.

WAC 458-20-193: RECEIPT IN WASHINGTON. Out-of-state buyer did not have receipt of goods in Washington because it exercised dominion and control over goods outside of Washington.

RULE 193; RCW 82.04.067(6): NEXUS. Taxable nexus is created by the out-of-state’s Taxpayer’s use of exchanges, where its Washington State customers obtain fuel in Washington from a third-party fuel supplier, who notifies the Taxpayer, who then bills these Washington customers.

RULE 193; RCW 82.04.220: B&O TAX - NEXUS - IN-STATE SOLICITATION OF BUSINESS: By way of administrative rule, the Department of Revenue has compiled a list of examples of what activities provide sufficient local nexus. Included within those examples is the in-state solicitation of orders by an employee or independent contractor.

RULE 193 RCW 82.04.220: NEXUS -TRAILING NEXUS B&O TAXES & RETAIL SALES TAX: Effective June 1, 2010, there is a change in reporting obligations of a business that ceases its nexus-creating activities. For B&O tax a person who stops the business activity that created nexus continues to have nexus for the remainder of the calendar year, plus one additional year, but the trailing nexus period for retail sales tax is still four years, plus the current year.

RULE 193: B&O TAX - SUBSTANTIAL NEXUS - MINIMUM CONTACTS - INDEPENDENT CONTRACTORS. An out-of-state manufacturer who employs an independent third party sales representative to provide technical support services and customer relations work has established substantial nexus with Washington.

RULE 193; RCW 82.04.4286: INTERSTATE SALES - OUT-OF-STATE ACCEPTANCE. A substantial and detailed inspection of goods prior to shipping may establish acceptance outside of Washington where there is no right to a final inspection upon delivery in Washington, the final inspection forms designate that inspection as acceptance of the goods, and there is evidence that the customer takes dominion and control of the goods outside Washington.

RULE 193: B&O TAX - NEXUS CREATING ACTIVITY - INTERSTATE SALES OF GOODS TO WASHINGTON CUSTOMERS - An out-of-state manufacturer who sends engineers into Washington to provide technical support and assistance during installation has established sufficient nexus to impose the B&O tax on it sales into the state.

RCW 82.08.0273; ETA 3054.2011: RETAIL SALES TAX - NONRESIDENT EXEMPTION - RECORDS. Taxpayers must maintain records required under RCW 82.08.0273 for each nontaxable sale to nonresidents to qualify for the statutory exemption.

RCW 82.32.730: B&O TAX - RETAIL SALES TAX - LEASE PAYMENTS. Under the provisions of RCW 82.32.730 the first rental payment is sourced to the business location of the seller, with subsequent payments sourced to the primary location of the property.

RCW 82.08.0273: RETAIL SALES TAX - NONRESIDENT EXEMPTION - ARTICLES SOLD TO NONRESIDENT STUDENTS - GOODS USED “SUBSTANTIALLY” IN WASHINGTON. Nonresident students that purchase school-related goods do not qualify for the nonresident exemption on such purchases because it is reasonable to presume that such goods are “substantially” used in Washington as part of their school activity.

RULE 193: B&O TAX - OUT-OF-STATE MANUFACTURER - NEXUS. An out-of-state manufacturer’s visits to Washington helped establish or maintain sales in Washington and that contact creates substantial nexus with this state.

RULE 193: B&O TAX - INTERSTATE SALES - INBOUND SALES - PLACE OF SALE - DELIVERY IN WASHINGTON - RECEIPT IN THIS STATE. The place where legal title to goods passes is not determinative of whether delivery has occurred in Washington under Rule 193. Income from sales of goods that are shipped from an out-of-state location into Washington, FOB origin, is subject to B&O taxation in Washington.

RULE 193; RCW 82.08.0254: B&O AND RETAIL SALES TAX - MANUFACTURER’S SALES -OUT-OF-STATE CONSUMERS - OUT-OF-STATE DELIVERY - PROOFS. Washington sellers that ship goods to out-of-state consumers are entitled to both B&O and retail sales tax exemptions if the seller retains adequate proofs documenting actual out-of-state delivery.

RULE 193; RCW 82.04.067: B&O TAX - RETAIL SALES TAX - NEXUS. The activities of a nonresident, independent sales representative in Washington to create and maintain customer goodwill are sufficient to create the nexus required for Washington to assert tax.

RULE 193B:NEXUS -- AFFILIATED CORPORATIONS. Sales made by out-of-state wholesaler to its parent company in Washington not subject to this state's taxes after its sales representatives became employees of the parent company and the out-of-state wholesaler itself performed no activities in this state significantly associated with its ability to maintain a market for the sale of its products.

RULE 193B:B&O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- NEXUS -- WHOLESALE SALES. Out-of-state taxpayer which made wholesale sales to its parent company in Washington found to have nexus with this state where it employed two sales representatives in Washington who called on parent corporation's Washington customers to promote interest in and the sales of the taxpayer's products. Promotional activities which directly affect retail sales of a product are related to wholesale sales and such activities can provide nexus for taxing the wholesale sales. (General Motors Corp. v.

RULE 193B:B&O AND RETAIL SALES TAX -- INTERSTATE COMMERCE -- NEXUS -- FACTORS DETERMINING. Sales to persons in this state are taxable when property is shipped from points outside this state to the buyer in this state and the seller has performed activities in this state which are significantly associated with its ability to establish and maintain a market in this state for the sales.

RULE 193A AND RULE 193C:INTERSTATE/FOREIGN SALES -- TAX EXEMPTIONS-- UNIFORM COMMERCIAL CODE -- INAPPLICABILITY. The excise taxability of sales to buyers located outside this state is governed by the Revenue Act of Title 82 RCW, not the provisions of U.C.C. law, chapter 62A.2-319. Rules 193A and C contain the proofs of interstate/foreign deliveries required to perfect entitlement to tax exemption.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- COMPLETE AUTO TRANSIT - FOURFOLD TEST. To be valid under Complete Auto Transit, the state tax on interstate commerce must meet four requirements: (1)there must be a sufficient nexus between the interstate activities and the taxing state;(2)the tax must be fairly apportioned;(3)the tax must not discriminate against interstate commerce; and (4) the tax must be fairly related to related to the services provided by the state.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- NEXUS. Those examples of activities giving rise to local nexus which are listed in Rule 193B are not exclusive. The rule provides that any in-state activity (unless otherwise specifically exempt) that serves to "enable" the Washington sales of an out-of-state taxpayer is sufficient to render those sales taxable under the Washington business and occupation tax.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- COMPLETE AUTO TRANSIT-- NEXUS -- NONRESIDENT SALES PERSON. The crucial factor governing nexus is whether the activities performed in this state on behalf of the taxpayer are significantly associated with the taxpayer's ability to establish and maintain a market in this state for the sales. Generally, if an in-state activity is economically meritorious for a taxpayer (if it is worth spending budget dollars to do it), then the activity is market driven and it establishes threshold nexus to tax.Tyler Pipe cited.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- COMPLETE AUTO TRANSIT -- APPORTIONMENT -- 15 U.S.C. 381 -- DOUBLE TAXATION. Oregon taxpayer's argument rejected that the tax imposed by Washington is unconstitutional for the reason of "double taxation" since it is also taxed by Oregon under a three factor formula.Washington tax, by its very nature, is perfectly apportioned and does not offend any of the other constitutional prohibitions against taxing interstate sales.Standard Pressed Steel and Chicago Bridge cited.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- COMPLETE AUTO TRANSIT -- DUE PROCESS -- RELATIONSHIP TO SERVICES PROVIDED -- NONRESIDENT SALES PERSONS. A state tax is constitutionally required to be fairly related to the services provided by the taxing state. This test requires a twofold determination:First, is a business active in the taxing state so that it creates a market for its goods or services in that state's marketplace? Second, is the measure of the tax reasonably related to the extent of the taxpayer's contact with the state? Wisconsin v. J. C. Penney Co.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- NEXUS -- DISSOCIATION -- NORTON -- BURDEN OF PROOF. Once nexus has been determined, the burden shifts to the seller to show that any of its sales result from market stimulation other than that which forms the nexus.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- COMPLETE AUTO TRANSIT -- DISCRIMINATION -- DOUBLE TAXATION. The U.S. Supreme Court has clearly rejected the notion that a multiple tax burden resulting from the varying tax schemes of more than one jurisdiction is an impermissible discrimination against interstate commerce. Tyler Pipe cited.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- NEXUS -- 15 U.S.C. 381. The federal act by its terms applies only to taxes on or measured by net income. The minimums prescribed for the exercise of nexus are therefore inapplicable to Washington's business and occupation tax, since it is measured by gross receipts.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- NEXUS -- DISSOCIATION -- MARKETING ACTIVITY. Where a taxpayer had a representative in this state marketing a line of products it was unable to dissociate sales from that line in which the representative was not directly involved from those in which the representative was involved. The activities of the representative helped to establish and maintain a market in Washington for the products.

RULE 193B:BUSINESS AND OCCUPATION TAX -- INTERSTATE COMMERCE -- NEXUS -- DISSOCIATION -- ABSENCE OF CUSTOMER CONTACT. A taxpayer who has taxable nexus with Washington may dissociate sales where it has demonstrated the absence of contact with customers in this state. ETB 506, 2 WTD 11 (1986).

RULE 193A AND RULE 103:B&O TAX -- NEXUS -- INSTATE DELIVERY -- ULTIMATE OUT-OF-STATE DESTINATION. When taxpayers provided storage at their own Washington facilities at the request of affiliate-buyers pending their products' further sale and shipment by the buyer to out-of-state destinations, the taxpayers in accepting responsibility for storage were acting as agents of their affiliate-customers, and constructive delivery thus took place in this state.

RULE 193A:B&O TAX -- RETAILING B&O TAX -- INTERSTATE SALES OF FISHING BOATS -- MANUFACTURING B&O TAX -- RETAILING INTERSTATE TRANSPORTATION EQUIPMENT (RITE) B&O TAX. Where taxpayer made interstate sales of fishing boats and reported the sales as subject to Retailing B&O tax which should have been reported as subject to Manufacturing B&O tax because the taxpayer manufactured the boats, the auditor erred in subjecting the sales to RITE B&O tax. The auditor should have subjected the interstate sales to Manufacturing B&O tax, same rate of tax as RITE B&O.

RULE 193B:B&O TAX -- RETAIL SALES TAX -- INTERSTATE LEASES -- NEXUS-- DUE PROCESS. Under Rule 193B Washington State has jurisdiction to tax apportioned lease receipts under B&O tax and retail sales tax where the property is leased by an out-of-state lessor to an out-of- state consumer for use in this state during any part of the lease period, where the lease agreement or the parties contemplate such use in this state. The nexus requirements under due process are the same for interstate leases as for interstate sales.

RULE 193B:B&O TAX -- RETAIL SALES TAX -- INTERSTATE LEASES -- OUT- OF-STATE DELIVERY -- MOBILE LEASED PROPERTY -- MOVEMENT AND USE BY LESSEE. Under Rule 193B Washington State does not assert tax jurisdiction for B&O tax or sales tax upon receipts from interstate leases of mobile property, delivered to an out-of-state lessee at a point outside this state by an out-of-state lessor with no contacts in this state, where the sole discretion to move the mobile property into Washington for use here is that of the lessee.

RULE 193B:B&O TAX -- DUE PROCESS -- NEXUS -- INTERSTATE LEASES. Under a gross receipts, business privileges tax structure some nexus activity more than mere happenstance physical presence of an out-of- state lessor's leased mobile property within this state is required for B&O taxing jurisdiction. The business privilege engaged in here must be known and intended by the out-of-state lessor.The same due process nexus standards apply for interstate leases as for interstate sales.

RULE 193B:B&O TAX -- SALES -- INTERSTATE COMMERCE -- NEXUS -- WHAT CONSTITUTES -- LOCAL SOLICITATION. Sales to persons in this state are B&O taxable when the order for the goods is solicited in this state by an agent or other representative of the seller.

RULE 193B:B&O TAX -- SALES -- EXEMPTION -- INTERSTATE COMMERCE -- NEXUS -- 15 U.S.C. 381.15 U.S.C. 381 (Public Law 86-272) by its terms applies only to taxes on or measured by net income. The criteria prescribed therein for nexus are, therefore, inapplicable to Washington's business and occupation tax, since it is measured by gross receipts.

B&O TAX -- PRINTING AND PUBLISHING -- IN-HOUSE PRINTING -- INSURANCE COMPANY. An insurance company that prints and publishes items for its own use is subject to B&O tax on the costs for materials, labor, and overhead.THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 93-269ER, 14 WTD 153 (1995).

RULE 193B:B&O Tax -- INTERSTATE COMMERCE -- NEXUS -- 15 U.S.C. 381.15 U.S.C. 381 (Public Law 86-272) applies only to taxes on or measured by net income.Washington's business and occupation tax is measured by gross receipts from sales in this state only. Nexus requirements of the federal statute are inapplicable.

RULE 193B:B&O TAX -- INTERSTATE COMMERCE -- NEXUS -- FACTORS DETERMINING. The key factor in determining whether nexus exists is whether activities performed in this state on behalf of the taxpayer are significantly associated with the taxpayer's ability to establish and maintain a market in this state for the sales. Lack of repeated contact with prospective clients is not determinative in a case where a taxpayer's sales are to one-time customers.

RULE 193B:BUSINESS AND OCCUPATION TAX -- NEXUS -- PROMOTION OF RETAIL SALES BY WHOLESALER. Local activity by a wholesaler which consists of promoting retail sales of the wholesaler's goods creates sufficient nexus to subject sales by the wholesaler to the retailer to business and occupation tax. ETB 507.04.193B.

RULE 193B:B&O TAX -- WHOLESALING -- INTERSTATE COMMERCE -- NEXUS -- SIGNIFICANT SERVICES -- SOLICITING -- AMOUNT OF TIME.The examples of nexus listed in Rule 193B are not an exhaustive list of nexus nor are the examples mutually exclusive for the purposes of illustrating the presence of nexus.Where a taxpayer may not meet the criteria of example (5) does not eliminate nexus if the activity fits another example or if the activity serves to establish or maintain a market, which is the legal principle that the examples are intended to illustrate.Accord: Det. No.

RULE 193B:B&O TAX -- WHOLESALING -- INTERSTATE COMMERCE -- NEXUS -- SOLICITING -- NON-RESIDENT EMPLOYEE.Whether an out of state business solicits through a resident or non-resident employee is immaterial for purposes of establishing nexus.It is the holding that subsequent U.S. Supreme Court decisions have significantly limited McLeod, Commissioner of Revenue v. J. E. Dilworth Co. et al to its facts.

RULE 193A:B&0 TAX -- LIABILITY -- RELIANCE ON PRIOR AUDIT.During the period of taxpayer's audit, Washington taxpayers who made and sold products out of state were taxable under the Manufacturing classification of the B&O tax for those sales and under the Wholesaling or Retailing classification for their in-state sales.Taxpayers are obligated to inform themselves of tax ramifications of their activities.Prior audit whichmissed asserting taxon taxpayer's out-of-state sales does not entitle taxpayer to rely on error and escape taxation on those activities in later years.

RULE 193A, RULE 193B:B&O TAX -- EXEMPTION MULTIPLE ACTIVITIES -- NATIONAL CAN -- REFUNDS.Refunds of business and occupation tax paid prior to June 23, 1987 will not be granted if the basis for the refund requestis Tyler Pipe v. Washington, 483 U.S. ___, 97 L. Ed 2d 199, 107 S. Ct. 2810 (1987).

RULE 193A:B&O TAX -- EXEMPTION -- INTERSTATE COMMERCE -- DELIVERY -- SALES TO OUT-OF-STATE PURCHASERS -- BURDEN OF PROOF.Sellers who deliver goods to purchasers at out-of-state points are required to prove entitlement to an exemption from B&O tax liability in order to avoid being taxable on their activities.Where no such proof is submitted, taxpayer is liable for tax under either the Retailing or the Wholesaling B&O tax classification.

RULE 193B: B&O TAX -- EXEMPTION -- INTERSTATE COMMERCE -- NEXUS.Infrequent visits to Washington customers by nonresident employees constitute sufficient local nexus to support taxation of sales where the visits involved either solicitation of sales or providing advice on the safe handling of the dangerous product sold by the taxpayer.

RULE 193B:B&O TAX -- AIRPLANE PARTS -- DELIVERY OF -- OUT-OF-STATE -- COMMON CARRIER -- SHIPMENT BY.The shipment of airplane parts via common carrier from an out-of-state seller to an in-state buyer constitutes a Washington delivery and sale.

RULE 193B:B&O TAX -- AIRPLANES -- SALE OF -- DELIVERY-- OUT-OF-STATE.The sale of an airplane to a Washington buyer by an out-of-state seller is not subject to B&O tax when the buyer takes delivery of the plane at the seller's out-of-state facility.

A STATEMENT OF PURPOSE AND INTENT WITH RESPECT TO THE TAXABILITY OF INTERSTATE SALES AND DELIVERIES OF TANGIBLE PERSONAL PROPERTY.

RULE 193A:RETAIL SALES TAX --EXEMPTION -- NONCONTIGUOUS STATES -- LOCAL DELIVERY --BUYER'S OWN RECEIVING TERMINAL.The sales tax exemption for goods sold for use in noncontiguous states is not available for buyers who take delivery in this state at their own warehouse/receiving terminal and then act as their own forwarding agent, carrying some goods themselves and hiring common carriers for other deliveries to Alaska.

RULE 193B and RULE 193C:B&O TAX -- IMPORTS -- STREAM OF COMMERCE.Where taxpayer imports vehicles into Washington and prepares them for resale in this state, the activity is B&O taxable.Vehicles are not in unbroken stream of commerce, and taxpayer's activities in this state are sufficient to constitute nexus.

RULE 193A:RETAIL SALES TAX -- INTERSTATE SALES.To be relieved of the duty to collect sales tax on alleged interstate sales, taxpayer must prove that it was obligated to, and did, deliver the goods to the purchaser outside this state. Delivery to moving company where the invoice lists a Washington telephone number for the purchaser at the time of sale and where the seller was not shown on the transportation documents as "shipper" is not sufficient to comply with Rule 193A.

RULE 193B:RULE 193A -- WHOLESALING B&O TAX -- EXEMPTION-- INTERSTATE SALES -- DELIVERY TO BUYER.A sale takes place in this state when the goods sold are delivered to the buyer in this state. If delivery to the buyer takes place outside this state, there is no sale in this state.

RULE 193A -- RETAIL SALES TAX -- SALE TO NON-RESIDENT -- LOCAL DELIVERY POINT -- TAKEN OUT OF STATE BY BUYER.Where taxpayer sold and delivered a drilling rig to an out-of-state purchaser/consumer at its Washington business location, the sale has been completed within the state and retail sales tax must be collected on the transaction.

RULE 193B:B&O & RETAIL SALES TAX -- SALES MADE TO WASHINGTON RESIDENTS -- AFFIDAVIT OF OUT-OF-STATE DELIVERY.Where the taxpayer's sales office was located in Oregon, and all deliveries were made from that location, taxpayer's affidavits of out-of-state delivery were accepted, as sufficient documentation for the interstate nature of its sales for this audit period only.

RULE 193A:B&O TAX -- MANUFACTURING -- RAW SEAFOOD -- INTERSTATE SALE-- CARRIER AS AGENT OF SELLER.Where seller delivers sold goods to a carrier it has selected to deliver goods [to] an out-of-state buyer's location, the sale is taxed at the Manufacturing--raw seafood products B&O tax rate provided there was an agreement with the buyer to make such delivery and documentary evidence was retained by the seller showing that delivery was in fact made to the buyer outside this state.Shipment on a "freight collect" basis does not necessarily indicate that the carrier is an agent of the buy

RULE 193A:B&O TAX -- EXEMPTION -- OUT-OF-STATE SALES -- DELIVERY.The shipment of goods from a taxpayer's Oregon facility to Alaska via Seattle is found B&O taxable. Delivery of the goods occurred in Washington when they were turned over to common carriers hired by the buyers to transport the goods to Alaska.

RULE 193B:INTERSTATE SALES OF GOODS TO PERSONS IN WASHINGTON -- B&O TAX -- NEXUS -- DISSOCIATION -- BURDENS OF PROOF.The burden to show jurisdiction to tax sales rests upon the state.Once this has been shown, then the burden shifts to the seller to prove that some or any of its sales were disassociated with the significant sales activity.

RULE 193B:F.O.B. DESTINATION -- DELIVERY -- SALES -- TAX LIABILITY.Shipments are F.O.B. destination when an out- of-state taxpayer/seller bears the risk and expense of transport and tenders delivery in Washington. Under Rule 103, in determining tax liability of persons selling tangible personal property, a sale occurs in Washington if goods sold are delivered to the buyer in this state.

RULE 193B -- B&O TAX -- FEDERAL INTERSTATE INCOME TAX ACT -- APPLICABILITY.The federal interstate income tax act (15 U.S.C Sec. 381 et. seq.) does not apply to the business and occupation tax.Tyler Pipe v. Department of Rev., 105 Wn.2d 318 ( 1986).ACCORD:Det. 87-342, 4 WTD 229 (1987).

RULE 193B: EXPORT CERTIFICATE - NEXUS.The issuance of an export certificate by a constructive possessor of carbonated beverages is not a business activity within this state sufficient to confer B&O nexus for a business that does not otherwise have B&O tax nexus in this state.