Taxicab owners renting their taxicabs to drivers must be registered with the Department of Revenue. They are obligated to collect and remit retail sales tax on the amounts received from the drivers for use of their taxicabs. In addition, B&O tax applies under the retailing classification.
Trucking is a multifaceted industry in the state of Washington. In addition to the hauling of goods into and through the state, many other business activities fall under the umbrella of “trucking” industry. These businesses include fuel stations, repair facilities, broker services, and leasing companies, to name a few.
Business and Occupation (B&O) tax: A gross receipts tax imposed on persons conducting business activities in Washington. There are different reporting classifications for various business activities. Each classification has its own tax rate. Persons performing more than one activity may be subject to B&O tax under more than one classification.
Generally, every person doing a business activity in Washington must register with the state of Washington through the Business Licensing Service. Once registered, persons receive a nine-digit Unified Business Identifier (UBI) number. Generally, this number is also the Department of Revenue (DOR) Account ID. Businesses also receive the state Business License.
Persons engaged in trucking activities are potentially subject to the following taxes:
A business that performs hauling for hire within the state of Washington is subject to the Public Utility Tax (PUT) under either the Motor Transportation or the Urban Transportation classifications. Motor and urban transportation include the operation of motor-driven vehicles, upon public roads, used in transporting persons or property belonging to others, on a for hire basis. The PUT on transportation is generally computed only on those trips that originate and terminate within this state.
Speedy Trucking is hired to pickup office furniture in City A and then deliver it to City C. The total mileage from the pickup point to the delivery point is twenty miles. The carrier will use a direct route from City A, through City B, and deliver the goods in City C. City B’s corporate limits are within five miles of both City A and C.
Speedy Trucking is hired to transport property from a location in City A to a location in City B. The total mileage between the pickup point and the delivery point is ten miles. City B is within 5 miles of the corporate limits of City A.
In many cases, a business may perform both urban transportation and motor transportation activities. In order to report under the proper tax classification the business must segregate their income into the proper reporting classifications. Documentation, such as a log or other record, must be maintained as evidence of actual activities performed. (Failure to maintain proper records may result in the higher tax rate of motor transportation applying to all of the income.)
A sales tax exemption is allowed for certain purchases by motor carriers who operate in interstate and foreign commerce. A “motor carrier” means and includes a natural person, individual, partnership, firm, association, or private or public corporation, which is engaged in interstate commerce and which operates or causes to be operated on any highway in this state any commercial motor vehicle.
The exemption applies to purchases of the following items when used in interstate and foreign commerce:
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