WAC 214

Boxes and Packaging Materials Repealed 6/30/2000 - This information is provided in WAC 458-20-214 (Cooperative marketing associations and independent dealers acting as agents of others with respect to the sale of fruit and produce) and WAC 458-20-115 (Sales of packing materials and containers).

"Persons," "company."

"Sale at retail," "retail sale."

"Sale at wholesale," "wholesale sale."

Tax on retailers.

Tax on wholesalers, distributors.

Tax on selected business services, financial businesses, or other business or service activities.

Exemptions--Farmers--Agriculture.

Deductions--Compensation for receiving, washing, etc., horticultural products for person exempt under RCW 82.04.330--Materials and supplies used.

Tax imposed-Retail sales-Retail car rental.

Use tax imposed.

Definitions-Where retail sale occurs.

Cooperative marketing associations and independent dealers acting as agents of others with respect to the sale of fruit and produce.

Processing Perishable Meat Products. The Department issued Excise Tax Advisory (ETA) 3122.2011 Processing Perishable Meat Products. This ETA was originally issued as ETA 2035 in March 2007 to explain who is entitled to the preferential business and occupation (“B&O”) tax rate based on the Washington State Supreme Court decision, Agrilink Foods, Inc. v. Washington State Department of Revenue, 153 Wn.2d 392 (2005). The following header has been added to this ETA to explain that it does not apply during the period of June 1, 2010 through December 1, 2010.

Packers of Horticultural Products and the Taxability of Storage Income Many packers of horticultural products are organized as agricultural cooperative marketing associations that pack, market, and sell horticultural products for the growers. These packers typically perform a variety of activities for growers, including the storage of the horticultural products in cold storage. This ETA discusses how the business and occupation (B&O) tax deduction available to persons receiving, washing, sorting, and packing horticultural products applies in these cases.

SALES AND RENTALS OF FRUIT BINS-Cancelled effective -0/30/2003.See WAC 210.

MARKETING ASSOCIATION:SELLER OR AGENT - Cancelled effective December 29, 2006 This document addresses the B&O tax classification of an in-state marketing association for association members. The document states that based on the associations activities and circumstances, and its bylaws, the association was operating as an agent of its members. The result being that the association was subject to service B&O tax on the gross receipts from services rendered and not the gross receipts from the sale of fresh fruit.

Processing Plants and Cold Storage Warehouses

B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products

Changes to the B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products

Fruit and Vegetable Processors Tax Exemption - New E-file Requirement

"Cold Storage Warehouse" Added to Warehouse Sales Tax Remittance Program

Fresh Fruit/Vegetable, Seafood, and Dairy Product Manufacturers B&O Tax Exemptions Extended

B&O Tax Preferences for Perishable Meat Products and Fruit or Vegetable Products Updated 11/17/10

Fruit and Vegetable Processors May Qualify for B&O Tax Refund

Processors of Perishable Meat Entitled to Lower B&O Tax Rate Effective December 2, 2010

B&O TAX EXEMPTION - PACKAGING OF FRESH HORTICULTURAL PRODUCTS - PALLETIZATION INCOME.Income received by a fruit packer from the buyer for the palletization of fruit boxes does not qualify for the B&O tax exemption allowed for fruit packaging activities.Palletization assists the shipper in the movement of the fruit boxes, but is not part of or even an extension of the packaging process.Furthermore, the B&O tax exemption is only available for charges incurred by the grower and not the buyer.

B&O TAX FRUIT GRADING.Payments from a cannery to a fruit packer, which authorized the fruit packer to grade and accept fruit on behalf of the cannery, were subject to B&O tax because the taxpayer was paid to accept the fruit for the cannery, not for the growers.

B&O TAX RENT FRUIT BINS.A fruit packer who receives and temporarily stores fruit in its bins is taxable under the service and other activities B&O classification on receipts designated as bin rental.

B&O TAX -- INSURANCE CHARGES FRUIT WAREHOUSE.Receipts derived from separately stated insurance charges to growers, who own fruit stored in a warehouse, to cover the fruit packers premiums for losses to the contents of the warehouse, are not reimbursements, but taxable under the same classification as the receipts designated as warehouse charges.

Rule 214; RCW 82.04.4287: B&O TAX -- EXEMPTION –– COMPENSATION FOR RECEIVING, WASHING, ETC., HORTICULTURAL PRODUCTS FOR PERSON EXEMPT UNDER RCW 8.04.330. Only income derived from washing, sorting, packing for growers directly is exempt from B&O tax under RCW 82.04.4287. Income from sorting and packing of apples for a fruit packing house is not exempt from B&O tax under RCW 82.04.4287 where the fruit packing house and the grower of the fruits were affiliated entities.

B&O TAX -- SERVICE -- AGRICULTURAL COOPERATIVE ASSOCIATIONS -- TAXABILITY -- AGENTS. Agricultural marketing associations organized under chapter 24.32 RCW are selling agents for their principal/grower members by operation of law.Such organizations are subject to Service business tax measured by commissions, fees, and their own, retained gross receipts.

B&O TAX -- AGRICULTURAL COOPERATIVE ASSOCIATIONS -- SERVICE VIS-A-VIS WHOLESALE --SUBSTANCE OVER FORM. The substance of the operating relationship between an agricultural marketing association and its grower-members is that of an agent selling on behalf of its disclosed or undisclosed principals. Such an association is not a "wholesaler" outright, in any independent capacity.