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When is use tax due on vehicles brought into Washington by nonresident businesses?
Nonresident businesses may owe use tax on vehicles used in Washington for nontransitory business purposes, even if those vehicles are registered and primarily located outside of Washington. Nontransitory business activities include:
- Extracting.
- Manufacturing.
- Printing and publishing.
- Selling tangible personal property.
- Constructing or improving real or tangible personal property.
How to determine the value of use tax due?
The "value" used to calculate use tax due is determined by the number of days the vehicle is in Washington.
| If the vehicle is brought into Washington for: | Use tax is due on: |
|---|---|
| 180 days or less - in any period of 365 consecutive days. | The fair rental value of the vehicle for the time it was in Washington. |
| More than 180 days - in any period of 365 consecutive days. | The fair market value of the vehicle. |
What if use tax has already been paid on the vehicle's full value?
If Washington sales or use tax has already been paid by the nonresident business on the vehicle’s full value, the nonresident business does not owe use tax when the vehicle is temporarily in Washington.
Exemption from use tax
Vehicles used in interstate commerce by nonresident businesses may be exempt from use tax. To qualify for the exemption, the following three conditions must be met:
- The vehicle is used exclusively in transporting persons or property across the boundaries of Washington.
- The vehicle is registered in another state.
- The vehicle is not used in Washington more than 15 days in a row.
The exemption includes the use of the vehicle while in Washington as part of the transportation across Washington’s boundaries.
The exemption applies only to those vehicles that are most frequently dispatched, garaged, serviced, maintained, and operated from the user's place of business in a state other than Washington.
Examples
The examples provided below are to be used only as a general guide. The tax results of other situations must be determined separately after review of all the facts and circumstances.
Example 1
An Idaho electrical company is hired to wire an office building in Spokane, Washington. The electrical company takes three months to finish the job. During that time, the company drives its company truck between Idaho and Washington five days each week. The company’s vehicle stays in Washington for less than 180 days (5 days x 12 weeks = 60 days). The company owes use tax based on the fair rental value for the 60 days that the vehicle was in Washington.
Example 2
A building supply company located in Oregon uses its Oregon registered trucks to deliver materials to its Washington customers. The trucks travel from Vancouver to Spokane, and then back to Oregon. The truck returns to its Oregon location within two days. The company does not owe use tax because the vehicle is being used exclusively to transport property into Washington and is not in Washington for more than 15 days in a row.
References
RCW 82.12.010 – Definitions.
RCW 82.12.0254 - Exemptions—Use of airplanes, locomotives, railroad cars, or watercraft used in interstate or foreign commerce or outside state's territorial waters—Components—Use of vehicles in the transportation of persons or property across state boundaries—Conditions—Use of vehicle under trip permit to point outside state.
WAC 458-20-178 - Use tax and the use of tangible personal property.
