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Substitute Senate Bill (SSB) 5566 (chapter 289, Laws of 2009) changes the sourcing rules for direct mail sellers, when the direct mail both originates and is delivered within Washington. The change eliminates the requirement that, in certain circumstances, sales tax must be collected based on the delivery location of direct mail in Washington. In most cases, direct mail sellers have not been required to collect based on the delivery location in Washington. SSB 5566 does not change the sourcing rules for direct mail that is delivered into Washington from outside the state.

Business and Occupation Tax Exemption

Substitute House Bill 1508 provides a business and occupation (B&O) tax exemption for certain sales of natural or manufactured gas. To qualify for the exemption, the total amount of natural or manufactured gas a company sells within the United States cannot exceed 20% of what the seller consumed in the United States, in the same calendar year. SHB 1508 is effective July 22, 2007.

This Special Notice is being distributed to explain the tax application for persons who operate a composting facility.

The business and occupation (B&O) tax applies to every business activity in the state, unless specifically exempt by law. The classifications and tax rates vary depending upon the specific business activity. Composting facilities often receive income from various sources and activities. Generally, the activities of a composting facility include the following.

Motor vehicle manufacturers and dealers are offering a number of incentives and customer satisfaction programs to stimulate new car sales. Some customer satisfaction programs provide customers with an extended period of time within which they can return a purchased vehicle to the dealer if the customer is not satisfied. This Special Notice explains the conditions under which the dealer can claim a refund or credit of taxes previously paid on the sale of a vehicle to a customer.

Beginning July 1, 2008, purchases of trail grooming services by the state of Washington and nonprofit corporations organized under chapter 24.03 RCW are exempt from retail sales tax.

Trail grooming services

“Trail grooming” means the activity of snow compacting, snow redistribution or snow removal on state or privately-owned trails.

Intended audience: Businesses providing services to farmers

Effective July 1, 2022, the business and occupation (B&O) tax and the public utility tax exemptions for certain providers of custom farming and other farming-related services for farmers are restored.

These exemptions were previously available between Aug. 1, 2007, and Dec. 31, 2020.

Recently, questions have been raised regarding the tax treatment of removing fruit or nut-bearing trees and/ or stumps from orchards, which is often performed using bulldozers or other equipment not generally associated with farming activities. This Special Notice clarifies the tax treatment for these removal charges when performed for farmers.

In 1996, the Legislature enacted RCW 82.08.02745 and RCW 82.12.02685 that provides a sales and use tax exemption for agricultural employers making purchases of materials and labor for use in constructing, repairing, decorating, or improving new or existing buildings or other structures that will be used to provide housing to the employer’s agricultural employees.

Does your business rent motorized RVs or motor homes to consumers? If so, you should be aware that rentals of these vehicles are subject to either the rental car tax or the 0.3 percent motor vehicle tax. One tax or the other applies to the rental of motorized RVs and motor homes, but not both.

Intended audience: manufacturers who apply to this deferral program.

Change to this sales and use tax deferral program

Starting January 1, 2018, the Washington State Department of Revenue will accept two manufacturers for this deferral program each year instead of five. One manufacturer must be located in Eastern Washington. The other manufacturer must be located in Western Washington.

Manufacturers can get a sales and use tax deferral up to the first $10 million in costs for eligible buildings, machinery and equipment on each investment project.