RCW 82.32.440
Project on sales and use tax exemption requirements.
(1) The department is authorized to enter into agreements with sellers who meet the criteria in this section for a project on sales and use tax exemption requirements. This project will allow the use of electronic data collection in lieu of paper certificates otherwise required by law, including the use of electronic signatures.
(2) The object of the project is to determine whether using an electronic system and reviewing the data regarding the exempt transactions provides the same level of reliability as the current system while lessening the burden on the seller.
(3) A business making both sales taxable and exempt under chapter
82.08
or
82.12
RCW, that has electronic data-collecting capabilities, and that wishes to participate in the project may make application to the department in such form and manner as the department may require. To be eligible for such participation, a seller must demonstrate its capability to take part in the project and to provide data to the department in a form in which the data can be used by the department. The department is not required to accept all applicants in this project and is not required to provide any reason for not selecting a participant. A seller selected as a participant may be relieved of other sales and use tax exemption documentation requirements provided by law as covered by the project.
[
2010 c 106 s 227
;
2001 c 116 s 2
.]
NOTES:
Effective date
—
2010 c 106:
See note following RCW 35.102.145
.
Findings
—
2001 c 116:
"The legislature finds that current sales and use tax exemption documentation requirements are often confusing and burdensome for retailers, taxpayers, and the state. Additionally, the legislature notes the national efforts under way to simplify and streamline the sales and use tax, and that those efforts include a new system for retailers to use in processing sales and use tax exemptions. The legislature further finds that it would be beneficial to the state and its residents to allow for the simplification of sales and use tax exemption requirements." [
2001 c 116 s 1
.]
RCW 82.32.450
Natural or manufactured gas, electricity
—
Maximum combined credits and deferrals allowed
—
Availability of credits and deferrals.
(1) The total combined credits and deferrals that may be taken under RCW 82.04.447, 82.12.024, and
82.16.0495
shall not exceed two million five hundred thousand dollars in any fiscal year. Each person is limited to no more than a total of one million five hundred thousand dollars in tax deferred and credit allowed in any fiscal year in which more than one person takes tax credits and claims tax deferral. The department may require reporting of the credits taken and amounts deferred in a manner and form as is necessary to keep a running total of the amounts.
(2) Credits and deferred tax are available on a first-come basis. Priority for tax credits and deferrals among approved applicants shall be designated based on the first actual consumption of gas under RCW 82.04.447
or
82.12.024, or on the first actual use of electricity under RCW 82.16.0495, by each approved applicant. The department shall disallow any credits or deferred tax, or portion thereof, that would cause the total amount of credits taken and deferred taxes claimed to exceed the fiscal year cap or to exceed the per person fiscal year cap. If the fiscal cap is reached or exceeded[,] the department shall notify those persons who have approved applications under RCW 82.04.447, 82.12.024, and
82.16.0495
that no more credits may be taken or tax deferred during the remainder of the fiscal year. In addition, the department shall provide written notice to any person who has taken any tax credits or claimed any deferred tax in excess of the fiscal year cap. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice.
(3) No portion of an application for credit or deferral disallowed under this section may be carried back or carried forward nor may taxes ineligible for credit or deferral due to the fiscal cap having been reached or exceeded be carried forward or carried backward.
[
2001 c 214 s 12
.]
NOTES:
Severability
—
Effective date
—
2001 c 214:
See notes following RCW 80.50.010
.
Findings
—
2001 c 214:
See note following RCW 39.35.010
.
RCW 82.32.470
Transfer of sales and use tax on toll projects.
(1) The tax imposed and collected under chapters
82.08
and
82.12
RCW, less any credits allowed under chapter
82.14
RCW, on initial construction for a transportation project to be constructed under chapter
36.120
RCW, must be transferred to the transportation project to defray costs or pay debt service on that transportation project. In the case of a toll project, this transfer or credit must be used to lower the overall cost of the project and thereby the corresponding tolls.
(2) This transaction is exempt from the requirements in *RCW 43.135.035
(4).
(3) Government entities constructing transportation projects under chapter
36.120
RCW shall report to the department the amount of state sales or use tax covered under this section.
[
2002 c 56 s 407
.]
NOTES:
*Reviser's note:
RCW 43.135.035
was repealed by
2011 c 1 s 3
(Initiative Measure No. 1053) without cognizance of its amendment by 2010 c 4 s 2. 2010 c 4 s 2 was subsequently repealed by 2013 c 1 s 3 (Initiative Measure No. 1185, approved November 6, 2012).
RCW 82.32.480
Washington forest products commission
—
Disclosure of taxpayer information.
The forest products commission, created pursuant to chapter
15.100
RCW, constitutes a state agency for purposes of applying the exemption contained in RCW 82.32.330
(3)(e) for the disclosure of taxpayer information by the department. Disclosure of return or tax information may be made only to employees of the commission and not to commission members. Employees are authorized to use this information in accordance with RCW 15.100.100
(4). Employees are subject to all civil and criminal penalties provided under RCW 82.32.330
for disclosures made to another person not entitled under the provisions of this section or RCW 15.100.100
to knowledge of such information.
[
2010 c 106 s 105
;
2001 c 314 s 20
.]
NOTES:
Effective date
—
2010 c 106:
See note following RCW 35.102.145
.
Findings
—
Construction
—
2001 c 314:
See RCW 15.100.010
and
15.100.900
.
RCW 82.32.490
Electronic database for use by mobile telecommunications service provider.
(1)(a) The department may provide an electronic database as described in this section to a mobile telecommunications service provider, or if the department does not provide an electronic database to mobile telecommunications service providers, then the designated database provider may provide an electronic database to a mobile telecommunications service provider.
(b)(i) An electronic database, whether provided by the department or the designated database provider, shall be provided in a format approved by the American national standards institute's accredited standards committee X12, that after allowing for de minimis deviations, designates for each street address in the state, including to the extent practicable, any multiple postal street addresses applicable to one street location, the appropriate taxing jurisdictions, and the appropriate code for each taxing jurisdiction, for each level of taxing jurisdiction, identified by one nationwide standard numeric code.
(ii) An electronic database shall also provide the appropriate code for each street address with respect to political subdivisions that are not taxing jurisdictions when reasonably needed to determine the proper taxing jurisdiction.
(iii) The nationwide standard numeric codes shall contain the same number of numeric digits with each digit or combination of digits referring to the same level of taxing jurisdiction throughout the United States using a format similar to FIPS 55-3 or other appropriate standard approved by the federation of tax administrators and the multistate tax commission, or their successors. Each address shall be provided in standard postal format.
(2) The department or designated database provider, as applicable, that provides or maintains an electronic database described in subsection (1) of this section shall provide notice of the availability of the then-current electronic database, and any subsequent revisions, by publication in the manner normally employed for the publication of informational tax, charge, or fee notices to taxpayers in the state.
(3) A mobile telecommunications service provider using the data contained in an electronic database described in subsection (1) of this section shall be held harmless from any tax, charge, or fee liability that otherwise would be due solely as a result of any error or omission in the database provided by the department or designated database provider. The mobile telecommunications service provider shall reflect changes made to the database during a calendar quarter not later than thirty days after the end of the calendar quarter if the department or designated database provider, as applicable, has issued notice of the availability of an electronic database reflecting the changes under subsection (2) of this section.
[
2002 c 67 s 11
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.495
Liability of mobile telecommunications service provider if no database provided.
(1) If neither the department nor the designated database provider provides an electronic database under RCW 82.32.490, a mobile telecommunications service provider shall be held harmless from any tax, charge, or fee liability in any taxing jurisdiction in this state that otherwise would be due solely as a result of an assignment of a street address to an incorrect taxing jurisdiction if, subject to RCW 82.32.500, the home service provider employs an enhanced zip code to assign each street address to a specific taxing jurisdiction for each level of taxing jurisdiction and exercises due diligence at each level of taxing jurisdiction to ensure that each street address is assigned to the correct taxing jurisdiction. If an enhanced zip code overlaps boundaries of taxing jurisdictions of the same level, the home service provider must designate one specific jurisdiction within the enhanced zip code for use in taxing the activity for such enhanced zip code for each level of taxing jurisdiction. Any enhanced zip code assignment changed in accordance with RCW 82.32.500
is deemed to be in compliance with this section. For purposes of this section, there is a rebuttable presumption that a home service provider has exercised due diligence if the home service provider demonstrates that it has:
(a) Expended reasonable resources to implement and maintain an appropriately detailed electronic database of street address assignments to taxing jurisdictions;
(b) Implemented and maintained reasonable internal controls to correct misassignments of street addresses to taxing jurisdictions promptly; and
(c) Used all reasonably obtainable and usable data pertaining to municipal annexations, incorporations, reorganizations, and any other changes in jurisdictional boundaries that materially affect the accuracy of the database.
(2) Subsection (1) of this section applies to a mobile telecommunications service provider that is in compliance with the requirements of subsection (1) of this section, if in this state an electronic database has not been provided under RCW 82.32.490, until the later of:
(a) Eighteen months after the nationwide standard numeric code described in RCW 82.32.490
(1) has been approved by the federation of tax administrators and the multistate tax commission; or
(b) Six months after the department or a designated database provider in this state provides the database as prescribed in RCW 82.32.490
(1).
[
2002 c 67 s 12
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.500
Determination of taxing jurisdiction for telecommunications services.
A taxing jurisdiction, or the department on behalf of any taxing jurisdiction or taxing jurisdictions within this state, may:
(1) Determine that the address used for purposes of determining the taxing jurisdictions to which taxes, charges, or fees for mobile telecommunications services are remitted does not meet the definition of place of primary use in RCW 82.04.065
and give binding notice to the home service provider to change the place of primary use on a prospective basis from the date of notice of determination. If the authority making the determination is not the department, the taxing jurisdiction must obtain the consent of all affected taxing jurisdictions within the state before giving the notice of determination. Before the taxing jurisdiction gives the notice of determination, the customer must be given an opportunity to demonstrate, in accordance with applicable state or local tax, charge, or fee administrative procedures, that the address is the customer's place of primary use; and
(2) Determine that the assignment of a taxing jurisdiction by a home service provider under RCW 82.32.495
does not reflect the correct taxing jurisdiction and give binding notice to the home service provider to change the assignment on a prospective basis from the date of notice of determination. If the authority making the determination is not the department, the taxing jurisdiction must obtain the consent of all affected taxing jurisdictions within the state before giving the notice of determination. The home service provider must be given an opportunity to demonstrate, in accordance with applicable state or local tax, charge, or fee administrative procedures, that the assignment reflects the correct taxing jurisdiction.
[
2002 c 67 s 13
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.505
Telecommunications services
—
Place of primary use.
(1) A home service provider is responsible for obtaining and maintaining information regarding the customer's place of primary use as defined in RCW 82.04.065
. Subject to RCW 82.32.500, and if the home service provider's reliance on information provided by its customer is in good faith, a taxing jurisdiction shall:
(a) Allow a home service provider to rely on the applicable residential or business street address supplied by the home service provider's customer; and
(b) Not hold a mobile telecommunications service provider liable for any additional taxes, charges, or fees based on a different determination of the place of primary use.
(2) Except as provided in RCW 82.32.500, a taxing jurisdiction shall allow a home service provider to treat the address used by the home service provider for tax purposes for any customer under a service contract or agreement in effect on August 1, 2002, as that customer's place of primary use for the remaining term of the service contract or agreement, excluding any extension or renewal of the service contract or agreement, for purposes of determining the taxing jurisdictions to which taxes, charges, or fees on charges for mobile telecommunications services are remitted.
[
2002 c 67 s 14
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.510
Scope of mobile telecommunications act
—
Identification of taxable and nontaxable charges.
(1) Chapter 67, Laws of 2002 does not modify, impair, supersede, or authorize the modification, impairment, or supersession of any law allowing a taxing jurisdiction to collect a tax, charge, or fee from a customer that has failed to provide its place of primary use.
(2) If a taxing jurisdiction does not otherwise subject charges for mobile telecommunications services to taxation and if these charges are aggregated with and not separately stated from charges that are subject to taxation, then the charges for nontaxable mobile telecommunications services may be subject to taxation unless the mobile telecommunications service provider can reasonably identify charges not subject to the tax, charge, or fee from its books and records that are kept in the regular course of business.
(3) If a taxing jurisdiction does not subject charges for mobile telecommunications services to taxation, a customer may not rely upon the nontaxability of charges for mobile telecommunications services unless the customer's home service provider separately states the charges for nontaxable mobile telecommunications services from taxable charges or the home service provider elects, after receiving a written request from the customer in the form required by the provider, to provide verifiable data based upon the home service provider's books and records that are kept in the regular course of business that reasonably identifies the nontaxable charges.
[
2002 c 67 s 15
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.515
Applicability of telephone and telecommunications definitions.
The definitions in RCW 82.04.065
apply to RCW 82.32.490
through
82.32.510
and
35.21.873
.
[
2002 c 67 s 17
.]
NOTES:
Finding
—
Effective date
—
2002 c 67:
See notes following RCW 82.04.530
.
RCW 82.32.520
Sourcing of calls.
(1) Except for the defined telecommunications services listed in subsection (3) of this section, the sale of telecommunications service as defined in RCW 82.04.065
sold on a call-by-call basis is sourced to (a) each level of taxing jurisdiction where the call originates and terminates in that jurisdiction or (b) each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
(2) Except for the defined telecommunications services listed in subsection (3) of this section, a sale of telecommunications service as defined in RCW 82.04.065
sold on a basis other than a call-by-call basis, is sourced to the customer's place of primary use.
(3) The sales of telecommunications service as defined in RCW 82.04.065
that are listed in subsection (3) of this section is sourced to each level of taxing jurisdiction as follows:
(a) A sale of mobile telecommunications services, other than air-ground radiotelephone service and prepaid calling service, is sourced to the customer's place of primary use as required by RCW 82.08.066
.
(b) A sale of postpaid calling service is sourced to the origination point of the telecommunications signal as first identified by either (i) the seller's telecommunications system, or (ii) information received by the seller from its service provider, where the system used to transport such signals is not that of the seller.
(c) A sale of prepaid calling service or a sale of a prepaid wireless calling service is sourced as follows:
(i) When a prepaid calling service or a prepaid wireless calling service is received by the purchaser at a business location of the seller, the sale is sourced to that business location;
(ii) When a prepaid calling service or a prepaid wireless calling service is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser or the purchaser's donee, designated as such by the purchaser, occurs, including the location indicated by instructions for delivery to the purchaser or donee, known to the seller;
(iii) When (c)(i) and (ii) of this subsection do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith;
(iv) When (c)(i), (ii), and (iii) of this subsection do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, when use of this address does not constitute bad faith;
(v) When (c)(i), (ii), (iii), and (iv) of this subsection do not apply, including the circumstance where the seller is without sufficient information to apply those provisions, the sale is sourced as provided in RCW 82.32.730
(1)(e);
(vi) In the case of a sale of prepaid wireless calling service, (c)(v) of this subsection includes as an option the location associated with the mobile telephone number.
(d) A sale of a private communication service is sourced as follows:
(i) Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which such customer channel termination point is located.
(ii) Service where all customer termination points are located entirely within one jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer channel termination points are located.
(iii) Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segment of channel are separately charged is sourced fifty percent in each level of jurisdiction in which the customer channel termination points are located.
(iv) Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points.
(4) The definitions in this subsection apply throughout this chapter.
(a) "Air-ground radiotelephone service" means air-ground radio service, as defined in 47 C.F.R. Sec. 22.99, as amended or renumbered as of January 1, 2003, in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft.
(b) "Call-by-call basis" means any method of charging for telecommunications services where the price is measured by individual calls.
(c) "Communications channel" means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points.
(d) "Customer" means the person or entity that contracts with the seller of telecommunications services. If the end user of telecommunications services is not the contracting party, the end user of the telecommunications service is the customer of the telecommunications service. "Customer" does not include a reseller of telecommunications service or for mobile telecommunications service of a serving carrier under an agreement to serve the customer outside the home service provider's licensed service area.
(e) "Customer channel termination point" means the location where the customer either inputs or receives the communications.
(f) "End user" means the person who uses the telecommunications service. In the case of an entity, the term end user means the individual who uses the service on behalf of the entity.
(g) "Home service provider" means the same as that term is defined in RCW 82.04.065
.
(h) "Mobile telecommunications service" means the same as that term is defined in RCW 82.04.065
.
(i) "Place of primary use" means the street address representative of where the customer's use of the telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer. In the case of mobile telecommunications services, "place of primary use" must be within the licensed service area of the home service provider.
(j) "Postpaid calling service" means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number that is not associated with the origination or termination of the telecommunications service. A postpaid calling service includes a telecommunications service, except a prepaid wireless calling service, that would be a prepaid calling service except it is not exclusively a telecommunications service.
(k) "Prepaid calling service" means the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number and/or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount.
(l) "Prepaid wireless calling service" means a telecommunications service that provides the right to use mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content, and ancillary services, which must be paid for in advance that is sold in predetermined units or dollars of which the number declines with use in a known amount.
(m) "Private communication service" means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels.
(n) "Service address" means:
(i) The location of the telecommunications equipment to which a customer's call is charged and from which the call originates or terminates, regardless of where the call is billed or paid;
(ii) If the location in (n)(i) of this subsection is not known, the origination point of the signal of the telecommunications services first identified by either the seller's telecommunications system or in information received by the seller from its service provider, where the system used to transport such signals is not that of the seller;
(iii) If the locations in (n)(i) and (ii) of this subsection are not known, the location of the customer's place of primary use.
[
2010 c 106 s 228
. Prior:
2007 c 54 s 18
;
2007 c 6 s 1001
;
2004 c 153 s 403
;
2003 c 168 s 501
.]
NOTES:
Effective date
—
2010 c 106:
See note following RCW 35.102.145
.
Severability
—
2007 c 54:
See note following RCW 82.04.050
.
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
Retroactive effective date
—
Effective date
—
2004 c 153:
See note following RCW 82.08.0293
.
Effective dates
—
Part headings not law
—
2003 c 168:
See notes following RCW 82.08.010
.
RCW 82.32.525
Purchaser's cause of action for over-collected sales or use tax.
(1) A purchaser's cause of action against the seller for over-collected sales or use tax does not accrue until the purchaser has provided written notice to the seller and the seller has sixty days to respond. The notice to the seller must contain the information necessary to determine the validity of the request.
(2) In connection with a purchaser's request from a seller for over-collected sales or use taxes, a seller shall be presumed to have a reasonable business practice, if in the collection of such sales or use taxes, the seller:
(a) Uses either a provider or a system, including a proprietary system, that is certified by the state; and
(b) Has remitted to the state all taxes collected less any deductions, credits, or collection allowances.
[
2004 c 153 s 408
;
2003 c 168 s 211
.]
NOTES:
Retroactive effective date
—
Effective date
—
2004 c 153:
See note following RCW 82.08.0293
.
Effective dates
—
Part headings not law
—
2003 c 168:
See notes following RCW 82.08.010
.
RCW 82.32.530
Seller nexus.
The department may not use registration under the streamlined sales and use tax agreement and collection of sales and use taxes in member states as a factor in determining whether the seller has nexus with Washington for any tax at any time.
[
2004 c 153 s 404
;
2003 c 168 s 213
.]
NOTES:
Retroactive effective date
—
Effective date
—
2004 c 153:
See note following RCW 82.08.0293
.
Effective dates
—
Part headings not law
—
2003 c 168:
See notes following RCW 82.08.010
.
RCW 82.32.531
Nexus
—
Trade convention attendance or participation.
(1) For purposes of the taxes imposed or authorized under chapters
82.04, 82.08, 82.12, and
82.14
RCW, the department may not make a determination of nexus based solely on the attendance or participation of one or more representatives of a person at a single trade convention per year in Washington state in determining if such person is physically present in this state for the purposes of establishing substantial nexus with this state.
(2) Subsection (1) of this section does not apply to persons making retail sales at a trade convention, including persons taking orders for products or services where receipt will occur in Washington state.
(3) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Not marketed to the general public" means that the sponsor of a trade convention limits its marketing efforts for the trade convention to its members and specific invited guests of the sponsoring organization.
(b) "Physically present in this state" and "substantial nexus with this state" have the same meaning as provided in RCW 82.04.067
.
(c) "Trade convention" means an exhibition for a specific industry or profession, which is not marketed to the general public, for the purposes of:
(i) Exhibiting, demonstrating, and explaining services, products, or equipment to potential customers; or
(ii) The exchange of information, ideas, and attitudes in regards to that industry or profession.
[
2016 c 137 s 3
.]
NOTES:
Reviser's note:
Section 3, chapter 137, Laws of 2016 expires January 1, 2027, pursuant to the automatic expiration date established in RCW 82.32.805
(1)(a).
Tax preference performance statement
—
2016 c 137 s 3:
"(1) This section is the tax preference performance statement for the tax preference contained in section 3 of this act. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to induce certain designated behavior by taxpayers as indicated in RCW 82.32.808
(2)(a).
(3) It is the legislature's specific public policy objective to encourage participation in Washington trade conventions. It is the legislature's intent to allow a business to participate in one trade convention in Washington each year without that participation being the sole basis for establishing physical presence nexus with the state for tax purposes. Pursuant to chapter
43.136
RCW, the joint legislative audit and review committee must review the new tax preference established under section 3 of this act by December 31, 2025.
(4) If a review finds that the number of businesses participating in trade conventions in Washington has increased from 2015 levels, then the legislature intends for the legislative auditor to recommend extending the expiration date of the tax preference. If the joint legislative audit and review committee finds that the number of businesses participating in trade conventions in Washington has not increased above 2015 levels, then the joint legislative audit and review committee must make recommendations on how the tax preference can be improved to accomplish that legislative objective. To obtain the data necessary to perform this review, the joint legislative audit and review committee must request the required information from the department of revenue and the Washington state convention center operated under chapter
36.100
RCW." [
2016 c 137 s 1
.]
Effective date
—
2016 c 137:
See note following RCW 82.04.067
.
RCW 82.32.532
Digital products
—
Nexus.
(1) For purposes of the taxes imposed in this title, the department of revenue may not consider a person's ownership of, or rights in, computer software as defined in RCW 82.04.215, including computer software used in providing a digital automated service; master copies of software; digital goods or digital codes residing on servers located in this state in determining whether the person has substantial nexus with this state.
(2) For purposes of this section, "substantial nexus" means the requisite connection that a person has with a state to allow the state to subject the person to the state's taxing authority, consistent with the commerce clause of the United States Constitution.
[
2010 c 111 s 701
;
2009 c 535 s 901
.]
NOTES:
Purpose
—
Retroactive application
—
Effective date
—
2010 c 111:
See notes following RCW 82.04.050
.
Intent
—
Construction
—
2009 c 535:
See notes following RCW 82.04.192
.
RCW 82.32.533
Digital products
—
Amnesty.
(1) Except as provided in subsection (2) of this section, no person may be held liable for the failure to collect or pay state and local sales and use taxes accrued before July 26, 2009, on the sale or use of digital goods or of services defined as a retail sale in RCW 82.04.050
(2)(a) and rendered in respect to digital goods.
(2) Subsection (1) of this section does not relieve any person from liability for state and local sales taxes that the person collected from buyers but did not remit to the department of revenue.
(3) Nothing in this section may be construed as authorizing the refund of state and local sales and use taxes properly paid on the sale or use, before July 26, 2009, of digital goods or of services defined as a retail sale in RCW 82.04.050
(2)(a) and rendered in respect to digital goods.
(4) A person is not entitled to a credit or refund of any business and occupation tax paid in excess of that properly due as a result of the person paying tax on its income earned from the sale of eligible digital products and services at the tax rate provided in RCW 82.04.290
(2)(a) rather than the tax rate provided in RCW 82.04.250
(1), unless the person requesting the credit or refund has paid the proper amount of state and local sales taxes due on the sales of the eligible digital products and services that generated the income in respect to which the business and occupation tax credit or refund is sought. For purposes of this subsection, "eligible digital products and services" means: (a) Digital goods; and (b) services defined as a retail sale in RCW 82.04.050
(2)(a) and rendered in respect to digital goods.
(5) For purposes of this section, "digital goods" has the same meaning as in RCW 82.04.192
.
[
2010 c 111 s 801
;
2009 c 535 s 1001
.]
NOTES:
Purpose
—
Retroactive application
—
Effective date
—
2010 c 111:
See notes following RCW 82.04.050
.
Intent
—
Construction
—
2009 c 535:
See notes following RCW 82.04.192
.
RCW 82.32.534
Annual report requirement for tax preferences.
(1)(a)(i) Beginning in calendar year 2018, every person claiming a tax preference that requires an annual tax performance report under this section must file a complete annual report with the department. The report is due by May 31st of the year following any calendar year in which a person becomes eligible to claim the tax preference that requires a report under this section.
(ii) If the tax preference is a deferral of tax, the first annual tax performance report must be filed by May 31st of the calendar year following the calendar year in which the investment project is certified by the department as operationally complete. An annual tax performance report must also be filed by May 31st of each succeeding calendar year through the calendar year in which the deferred taxes are fully repaid or are immediately due and payable because the recipient of the deferral is no longer eligible for the deferral.
(iii) The department may extend the due date for timely filing of annual reports under this section as provided in RCW 82.32.590
.
(b) The report must include information detailing employment and wages for employment positions in Washington for the year that the tax preference was claimed. However, persons engaged in manufacturing commercial airplanes or components of such airplanes may report employment and wage information per job at the manufacturing site for the year that the tax preference was claimed. The report must not include names of employees. The report must also detail employment by the total number of full-time, part-time, and temporary positions for the year that the tax preference was claimed. In lieu of reporting employment and wage data required under this subsection, taxpayers may instead opt to allow the employment security department to release the same employment and wage information from unemployment insurance records to the department and the joint legislative audit and review committee. This option is intended to reduce the reporting burden for taxpayers, and each taxpayer electing to use this option must affirm that election in accordance with procedures approved by the employment security department.
(c) Persons receiving the benefit of the tax preference provided by RCW 82.16.0421
or claiming any of the tax preferences provided by RCW 82.04.2909, 82.04.4481, 82.08.805, 82.12.805, or
82.12.022
(5) must indicate on the annual report the quantity of product produced in this state during the time period covered by the report.
(d) If a person filing a report under this section did not file a report with the department in the previous calendar year, the report filed under this section must also include employment and wage information for the calendar year immediately preceding the calendar year for which a tax preference was claimed.
(2)(a) As part of the annual report, the department and the joint legislative audit and review committee may request additional information necessary to measure the results of, or determine eligibility for, the tax preference.
(b) The report must include the amount of the tax preference claimed for the calendar year covered by the report. For a person that claimed an exemption provided in RCW 82.08.025651
or
82.12.025651, the report must include the amount of tax exempted under those sections in the prior calendar year for each general area or category of research and development for which exempt machinery and equipment and labor and services were acquired in the prior calendar year.
(3) Other than information requested under subsection (2)(a) of this section, the information contained in an annual report filed under this section is not subject to the confidentiality provisions of RCW 82.32.330
and may be disclosed to the public upon request.
(4)(a) Except as otherwise provided by law, if a person claims a tax preference that requires an annual report under this section but fails to submit a complete report by the due date or any extension under RCW 82.32.590, the department must declare:
(i) Thirty-five percent of the amount of the tax preference claimed for the previous calendar year to be immediately due and payable;
(ii) An additional fifteen percent of the amount of the tax preference claimed for the previous calendar year to be immediately due and payable if the person has previously been assessed under this subsection (4) for failure to submit a report under this section for the same tax preference; and
(iii) If the tax preference is a deferral of tax, the amount immediately due under this subsection is the deferred tax divided by the number of years in the repayment period. If the economic benefits of the deferral are passed to a lessee, the lessee is responsible for payment to the extent the lessee has received the economic benefit.
(b) The department may not assess interest or penalties on amounts due under this subsection.
(5) The department must use the information from this section to prepare summary descriptive statistics by category. No fewer than three taxpayers may be included in any category. The department must report these statistics to the legislature each year by December 31st.
(6) For the purposes of this section:
(a) "Person" has the meaning provided in RCW 82.04.030
and also includes the state and its departments and institutions.
(b) "Tax preference" has the meaning provided in RCW 43.136.021
and includes only the tax preferences requiring a report under this section.
[
2022 c 56 s 10
;
2021 c 145 s 19
;
2017 c 135 s 1
;
2016 c 175 s 1
;
2014 c 97 s 102
;
2010 c 114 s 103
.]
NOTES:
Effective date
—
2017 c 135:
"This act takes effect January 1, 2018." [
2017 c 135 s 48
.]
Effective date
—
2016 c 175:
"This act takes effect July 1, 2016." [
2016 c 175 s 4
.]
Application
—
Prospective and retroactive
—
2016 c 175:
"(1) In addition to applying prospectively, sections 1(4) and 2(6) of this act apply retroactively for a taxpayer who has filed an appeal regarding taxes, penalties, and interest owed under RCW 82.32.534
or *
82.32.585
before January 1, 2016, and the appeal is pending before the department of revenue or the board of tax appeals as of July 1, 2016.
(2) Except for taxpayers described in subsection (1) of this section, sections 1(4) and 2(6) of this act apply to amounts due and payable under sections 1(4) and 2(6) of this act on or after July 1, 2017." [
2016 c 175 s 3
.]
*Reviser's note:
RCW 82.32.585
was repealed by 2017 c 135 s 2, effective January 1, 2018.
Annual surveys and reports
—
Recommendations to update and improve
—
2013 2nd sp.s. c 13:
"By December 1, 2013, the department of revenue, in consultation with the joint legislative audit and review committee, must make recommendations to the appropriate fiscal committees of the legislature on ways to update and improve the annual report and annual survey. The recommendations must include suggested revisions to the report and survey that would make the data more relevant and reduce the administrative burden on the taxpayer." [
2013 2nd sp.s. c 13 s 1801
.]
Application
—
2010 c 114:
"Those provisions of sections 101 through 103, 105 through 109, 111 through 116, 118 through 122, 124, 126 through 128, 130, 132 through 149, and 151 through 153 of this act that relate to annual surveys and annual reports apply beginning with annual surveys and annual reports due in 2011 and thereafter." [
2010 c 114 s 203
.]
Finding
—
Intent
—
2010 c 114:
"(1) The legislature finds that accountability and effectiveness are important aspects of setting tax policy. In order to make policy choices regarding the best use of limited state resources, the legislature needs information on how a tax preference is used. In recent years, the legislature has enacted or extended numerous tax preferences that require the reporting of information to the department of revenue. Although there are many similarities in the requirements, and only two distinct accountability documents, there is a lack of uniformity in the information reported, penalties for failure to file, due dates, filing extensions, and filing requirements. Greater uniformity in the data reported is necessary to adequately compare tax preference programs. The legislature intends to create two sets of uniform reporting requirements that apply to the existing tax preferences and can be used in future legislation granting additional tax preferences.
(2) The legislative fiscal committees or the department of revenue are required to study many of the existing tax preferences and report to the legislature at least once. Because chapter
43.136
RCW now requires the joint legislative audit and review committee, with support from the department of revenue, to comprehensively review most tax preferences every ten years and provide a report to the legislature, a number of redundant studies by the legislative fiscal committees and the department of revenue have been eliminated. However, the department of revenue will continue to prepare summary descriptive statistics by category and report the statistics to the legislature each year." [
2010 c 114 s 101
.]
RCW 82.32.537
Silicon smelters
—
Annual survey or report.
(Contingent expiration date.)
(1)(a) A silicon smelter operated by a person required to submit an annual survey or report under RCW 82.16.315, 82.04.545, or
82.12.022
must repay an amount equal to the entire economic benefit accruing to the person for the previous two calendar years due to the tax preferences under RCW 82.16.315, 82.04.545, or
82.12.022
if:
(i) The average number of employment positions at a silicon smelter operated by the person is less than one hundred employment positions, as reported to the employment security department for the previous two calendar years; and
(ii) The average annual wage for all employment positions is equal to or less than the average annual wage for the county in which the silicon smelter operation is located for the previous two calendar years. The department must use the finalized 2015 county wage data from the census of employment and wages as reported by the employment security department.
(b) The department must make the determinations under (a)(i) and (ii) of this subsection (1) by August 31, 2023.
(2) If any tax preference amounts must be repaid under subsection (1) of this section, the department must declare the tax preference amounts to be immediately due and payable. The department must assess interest, but not penalties, on the amounts due under this subsection. The department must assess interest at the rate provided for delinquent taxes under this chapter, retroactively to the date the tax preference was claimed, and such interest accrues until the tax preference amounts are repaid.
(3) If any tax preference amounts must be repaid under subsection (1) of this section, the person may not continue to benefit from the tax preferences under RCW 82.16.315, 82.04.545, or
82.12.022
.
[
2017 3rd sp.s. c 37 s 708
.]
NOTES:
Contingent expiration date
—
2017 3rd sp.s. c 37 ss 701-708:
"(1)(a) Except as provided in (b) of this subsection, part VII of this act expires July 1, 2027.
(b)(i) If a person must make repayment under section 708 of this act, part VII of this act expires January 1, 2024.
(ii) Section 706 of this act expires January 1, 2018.
(2) If the contingent expiration date in subsection (1)(b) of this section occurs, the department of revenue must provide written notice of the expiration date of part VII of this act to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.
(3) If the contingent expiration date in subsection (1)(b) of this section occurs, the joint legislative audit and review committee is not required to perform the evaluation required in section 701 of this act." [
2017 3rd sp.s. c 37 s 1407
.]
Findings
—
Intent
—
Tax preference performance statement
—
2017 3rd sp.s. c 37 ss 701-708:
See note following RCW 82.16.315
.
RCW 82.32.550
"Commercial airplane," "component," and "superefficient airplane"
—
Definitions.
(1) "Commercial airplane" has its ordinary meaning, which is an airplane certified by the federal aviation administration for transporting persons or property, and any military derivative of such an airplane.
(2) "Component" means a part or system certified by the federal aviation administration for installation or assembly into a commercial airplane.
(3) "Superefficient airplane" means a twin aisle airplane that carries between two hundred and three hundred fifty passengers, with a range of more than seven thousand two hundred nautical miles, a cruising speed of approximately mach .85, and that uses fifteen to twenty percent less fuel than other similar airplanes on the market.
[
2010 1st sp.s. c 23 s 517
;
2008 c 81 s 12
;
2007 c 54 s 20
;
2003 2nd sp.s. c 1 s 17
.]
NOTES:
Effective date
—
2010 1st sp.s. c 23:
See note following RCW 82.04.4292
.
Findings
—
Intent
—
2010 1st sp.s. c 23:
See notes following RCW 82.04.220
.
Findings
—
Savings
—
Effective date
—
2008 c 81:
See notes following RCW 82.08.975
.
Severability
—
2007 c 54:
See note following RCW 82.04.050
.
Finding
—
2003 2nd sp.s. c 1:
See note following RCW 82.04.4461
.
RCW 82.32.555
Telecommunications and ancillary services taxes
—
Identification of taxable and nontaxable charges.
If a taxing jurisdiction does not subject some charges for ancillary services or telecommunications service, as those terms are defined in RCW 82.04.065, to taxation, but these charges are aggregated with and not separately stated from charges that are subject to taxation, then the charges for nontaxable ancillary services or telecommunications service, as those terms are defined in RCW 82.04.065, may be subject to taxation unless the telecommunications service provider or ancillary services provider can reasonably identify charges not subject to the tax, charge, or fee from its books and records that are kept in the regular course of business and for purposes other than merely allocating the sales price of an aggregated charge to the individually aggregated items.
[
2007 c 54 s 21
;
2007 c 6 s 1011
;
2004 c 76 s 1
.]
NOTES:
Reviser's note:
This section was amended by 2007 c 6 s 1011 and by 2007 c 54 s 21, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025
(2). For rule of construction, see RCW 1.12.025
(1).
Severability
—
2007 c 54:
See note following RCW 82.04.050
.
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.558
Tax deferral
—
Eligible projects
—
Application.
(Expires January 1, 2030.)
(1) Until October 1, 2019, a qualifying business may apply for a deferral of taxes on an eligible project. Application must be made to the department in a form and manner prescribed by the department. The application must contain information regarding the location of the project, estimated or actual costs of the project, time schedules for completion and operation of the project, and other information required by the department. The department must rule on the application within sixty days.
(2) If the department approves an application for a deferral of taxes under this section, the department must issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters
82.08, 82.12, 82.14, and
81.104
RCW. This certificate expires on the date the eligible project becomes operationally complete. The certificate may only be used for sales and use tax liability incurred after the date the department issued the certificate.
(3) A recipient of a certificate must notify the department when its eligible project is operationally complete. The department must review the qualifying business's records after the eligible project is operationally complete to ensure the correct amount of taxes has been reported and will be repaid.
(4)(a) For local sales and use taxes, the recipient of the certificate must begin paying deferred sales and use taxes in the first calendar year after the date certified by the department as the date on which the eligible project is operationally complete. The first payment is due on January 1st of the first calendar year after such certified date, with subsequent annual payments due on January 1st of the following seven years. Each payment must equal twelve and one-half percent of the tax due plus interest.
(b) For state sales and use taxes, the recipient of the certificate must repay all deferred state sales and use taxes by June 30, 2023.
(c) The department must assess interest, but not penalties, on the deferred taxes. The interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date the project was certified to be operationally complete, and will accrue until the deferred taxes are repaid.
(5) The department may authorize an accelerated repayment schedule upon request of the qualifying business.
(6) The debt for taxes due is not extinguished by insolvency or other failure of the qualifying business. Transfer of ownership does not terminate the deferral if the transferee agrees in writing to be bound by the requirements of this section and receives approval from the department. If the department approves the transfer of the deferral to a transferee, such approval not to be unreasonably withheld, conditioned, or delayed, the transferee is solely liable for repayment of the deferred taxes.
(7) If the eligible project is not operationally complete within three calendar years from the date that the department issued the certificate for the project, or if at any time the department finds that the project is not eligible for a deferral under this section, the amount of taxes outstanding for the project is immediately due and payable. If taxes must be repaid under this subsection, the department must assess interest at the rate provided for delinquent taxes under this chapter retroactively to the date of issuance of the certificate, but not penalties, on amounts due under this subsection.
(8) Applications and any other information received by the department under this section are not confidential under RCW 82.32.330
. This chapter applies to the administration of this section.
(9) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Eligible project" means a project consisting of either or both (i) a qualifying arena, associated parking structures, plazas, public spaces, and one or more tunnels connecting the arena and parking structures, or (ii) an ice hockey practice facility.
(b) "Ice hockey practice facility" means one or more contiguous structures of up to two hundred thousand square feet located within ten miles of a qualifying arena that (i) contains at least three ice rinks, and (ii) is being developed to attract a professional ice hockey franchise. An "ice hockey practice facility" may include ice rinks, spectator viewing locations, locker rooms, strength and conditioning rooms, administrative offices, retail space, food service facilities, and other amenities related to the operation of a state-of-the-art ice hockey center.
(c) "Operationally complete" means the project is capable of being used for its intended purpose as described in the application.
(d) "Personal property" means tangible personal property with a useful life of one year or more that is used in the operation of the eligible project.
(e) "Project" means the construction of new improvements, the renovation of existing improvements, the acquisition and installation of fixtures that are permanently affixed to and become a physical part of those improvements, personal property, and site preparation. "Project" includes materials used and labor and services rendered in respect to the planning, site preparation, construction, renovation, and installation.
(f) "Qualifying arena" means a multipurpose sports and entertainment facility owned by the largest city in a county with a population of at least one million five hundred thousand that is being redeveloped to attract professional ice hockey and basketball league franchises.
(g) "Qualifying business" means a business entity that exists for the primary purpose of engaging in commercial activity for profit and has entered into a lease or occupancy agreement with the fee owner of a qualifying arena and/or ice hockey practice facility to engage in the development of an eligible project.
(h) "Site preparation" includes soil testing, site clearing and grading, demolition, or any other related activities that are initiated before construction.
(10) This section expires January 1, 2030.
[
2019 c 347 s 2
.]
NOTES:
Tax preference performance statement
—
2019 c 347:
"(1) This section is the tax preference performance statement for the tax preference contained in section 2, chapter 347, Laws of 2019. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to provide tax relief for certain businesses or individuals and to accomplish a general purpose as indicated in RCW 82.32.808
(2) (e) and (f).
(3) It is the legislature's specific public policy objective to increase the fiscal stability of multipurpose sports and entertainment arenas in Washington state and thereby strengthen the economic vitality of the communities in which the arenas and practice facilities are located.
(4) To measure the effectiveness of the tax preference in achieving the specific public policy objective described in this act, the joint legislative audit and review committee must evaluate this tax preference. In evaluating the tax preference, the joint legislative audit and review committee may refer to data provided to the department of revenue." [
2019 c 347 s 1
.]
Effective date
—
2019 c 347:
"This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 9, 2019]." [
2019 c 347 s 4
.]
RCW 82.32.559
Tax deferral
—
Eligible projects
—
Deposit of funds.
(1) The state treasurer must deposit the repayment of deferred state sales and use taxes due under RCW 82.32.558
into the general fund.
(2)(a) Subject to the requirements provided in (b) of this subsection (2), the state treasurer must deposit deferred local sales and use taxes due under RCW 82.32.558
into the local sales and use tax account created in RCW 82.14.050
.
(b) Half of the repayment of deferred local sales and use taxes due under RCW 82.32.558
must be distributed to a county where an eligible project under RCW 82.32.558
(9)(a)(i) is located for the exclusive purpose of funding the construction or rehabilitation of capital facilities used for youth educational programming related to discovery, experimentation, and critical thinking in the sciences. Funds may also be used for the maintenance and operation of such capital facilities, which may include off-site operations that directly relate to the core mission of curiosity, discovery, experimentation, and critical thinking. The capital facility must be located on the same premises as a qualifying arena.
(3) The state treasurer must deposit any interest assessed and accrued on taxes due pursuant to RCW 82.32.558
(4) that is part of any annual repayment as follows:
(a) Interest on state taxes must be deposited into the state general fund.
(b) Interest on local taxes must be deposited into the local sales and use tax account.
(4) In the event that an accelerated repayment schedule is authorized by the department pursuant to RCW 82.32.558
(5), the state treasurer must deposit any amount in excess of taxes due pursuant to RCW 82.32.558
(4) into the state general fund and into the local sales and use account, with the respective amounts deposited based on the proportionate shares of the state taxes and local taxes due.
[
2021 c 178 s 1
;
2019 c 347 s 3
.]
NOTES:
Tax preference performance statement
—
Effective date
—
2019 c 347:
See notes following RCW 82.32.558
.
RCW 82.32.580
Sales and use tax deferral
—
Historic automobile museum.
(1) The governing board of a nonprofit organization, corporation, or association may apply for deferral of taxes on an eligible project. Application must be made to the department in a form and manner prescribed by the department. The application must contain information regarding the location of the project, estimated or actual costs of the project, time schedules for completion and operation of the project, and other information required by the department. The department must rule on the application within sixty days. All applications for the tax deferral under this section must be received no later than December 31, 2008.
(2) The department must issue a sales and use tax deferral certificate for state and local sales and use taxes due under chapters
82.08, 82.12, and
82.14
RCW on each eligible project.
(3) The nonprofit organization, corporation, or association must begin paying the deferred taxes in the tenth year after the date certified by the department as the date on which the eligible project is operationally complete. The first payment is due on December 31st of the tenth calendar year after such certified date, with subsequent annual payments due on December 31st of the following nine years. Each payment must equal ten percent of the deferred tax.
(4) The department may authorize an accelerated repayment schedule upon request of the nonprofit organization, corporation, or association.
(5) Except as provided in subsection (6) of this section, interest may not be charged on any taxes deferred under this section for the period of deferral. The debt for deferred taxes is not extinguished by insolvency or other failure of the nonprofit organization, corporation, or association.
(6) If the project is not operationally complete within five calendar years from issuance of the tax deferral or if at any time the department finds that the project is not eligible for tax deferral under this section, the amount of deferred taxes outstanding for the project is immediately due and payable. If deferred taxes must be repaid under this subsection, the department must assess interest, but not penalties, on amounts due under this subsection. Interest must be assessed at the rate provided for delinquent taxes under this chapter, retroactively to the date of deferral, and accrues until the deferred taxes due are repaid.
(7) Applications and any other information received by the department of revenue under this section are not confidential under RCW 82.32.330
. This chapter applies to the administration of this section.
(8) This section applies to taxable eligible project activity that occurs on or after July 1, 2007.
(9) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Eligible project" means a project that is used primarily for a historic automobile museum.
(b) "Historic automobile museum" means a facility owned and operated by a nonprofit organization, corporation, or association that is used to maintain and exhibit to the public a collection of at least five hundred motor vehicles.
(c) "Nonprofit organization, corporation, or association" means an organization, corporation, or association exempt from tax under section 501(c) (3), (4), or (10) of the federal internal revenue code (26 U.S.C. Sec. 501(c) (3), (4), or (10)).
(d) "Project" means the construction of new structures, the acquisition and installation of fixtures that are permanently affixed to and become a physical part of those structures, and site preparation. For purposes of this subsection, structures do not include parking facilities used for motor vehicles that are not on display or part of the museum collection.
(e) "Site preparation" includes soil testing, site clearing and grading, demolition, or any other related activities that are initiated before construction. Site preparation does not include landscaping services or landscaping materials.
[
2017 3rd sp.s. c 37 s 902
;
2005 c 514 s 701
.]
NOTES:
Tax preference performance statement
—
2017 3rd sp.s. c 37 s 902:
"(1) This section is the tax preference performance statement for the tax preference contained in section 902, chapter 37, Laws of 2017 3rd sp. sess. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
(2) The legislature categorizes this tax preference as one intended to provide tax relief for certain businesses or individuals and to accomplish a general purpose as indicated in RCW 82.32.808
(2) (e) and (f).
(3) It is the legislature's specific public policy objective to increase the fiscal stability of historic automobile museums in Washington state and thereby strengthen the economic vitality of the communities in which the museums are located.
(4) To measure the effectiveness of the tax preference in section 902, chapter 37, Laws of 2017 3rd sp. sess. in achieving the specific public policy objective described in subsection (3) of this section, the joint legislative audit and review committee must evaluate this tax preference. In evaluating the tax preference, the joint legislative audit and review committee may refer to data provided to the department of revenue." [
2017 3rd sp.s. c 37 s 901
.]
Effective date
—
2005 c 514 s 701:
"Section 701 of this act takes effect July 1, 2007." [
2005 c 514 s 1306
.]
Part headings not law
—
Severability
—
2005 c 514:
See notes following RCW 82.12.808
.
RCW 82.32.590
Annual tax performance reports
—
Failure to file.
(1) If the department finds that the failure of a taxpayer to file an annual tax performance report under RCW 82.32.534
by the due date was the result of circumstances beyond the control of the taxpayer, the department must extend the time for filing the tax performance report. The extension is for a period of thirty days from the date the department issues its written notification to the taxpayer that it qualifies for an extension under this section. The department may grant additional extensions as it deems proper.
(2) In making a determination whether the failure of a taxpayer to file an annual tax performance report by the due date was the result of circumstances beyond the control of the taxpayer, the department must be guided by rules adopted by the department for the waiver or cancellation of penalties when the underpayment or untimely payment of any tax was due to circumstances beyond the control of the taxpayer.
(3)(a) Subject to the conditions in this subsection (3), a taxpayer who fails to file an annual tax performance report required under subsection (1) of this section by the due date of the report is entitled to an extension of the due date. A request for an extension under this subsection (3) must be made in writing to the department.
(b) To qualify for an extension under this subsection (3), a taxpayer must have filed all annual tax performance reports, if any, due in prior years under subsection (1) of this section by their respective due dates, beginning with annual reports due in calendar year 2010.
(c) An extension under this subsection (3) is for ninety days from the original due date of the annual tax performance report.
(d) No taxpayer may be granted more than one ninety-day extension under this subsection (3).
[
2017 c 135 s 3
;
2011 c 174 s 306
. Prior:
2010 c 137 s 1
;
2010 c 114 s 135
;
2009 c 461 s 7
; prior:
2008 c 81 s 13
;
2008 c 15 s 7
; prior:
2006 c 354 s 17
;
2006 c 300 s 10
;
2006 c 177 s 8
;
2006 c 112 s 7
;
2006 c 84 s 7
;
2005 c 514 s 1001
.]
NOTES:
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Application
—
2010 c 137:
"Section 1 of this act applies to annual surveys and reports due under any of the statutes listed in RCW 82.32.590
(1) in calendar year 2011 and thereafter." [
2010 c 137 s 2
.]
Application
—
Finding
—
Intent
—
2010 c 114:
See notes following RCW 82.32.534
.
Effective date
—
Contingent effective date
—
2009 c 461:
See note following RCW 82.04.280
.
Findings
—
Savings
—
Effective date
—
2008 c 81:
See notes following RCW 82.08.975
.
Effective date
—
2008 c 15:
See note following RCW 82.82.010
.
Effective dates
—
2006 c 354:
See note following RCW 82.04.4268
.
Effective dates
—
Contingent effective date
—
2006 c 300:
See note following RCW 82.04.261
.
Effective date
—
2006 c 177 ss 1-9:
See note following RCW 82.04.250
.
Effective date
—
2006 c 84 ss 2-8:
See note following RCW 82.04.2404
.
Findings
—
Intent
—
2006 c 84:
See note following RCW 82.04.2404
.
Retroactive application
—
2005 c 514 s 1001:
"Section 1001 of this act applies retroactively to annual surveys required under RCW 82.04.4452
that are due after December 31, 2004." [
2005 c 514 s 1312
.]
Effective date
—
2005 c 514:
See note following RCW 82.04.4272
.
Part headings not law
—
Severability
—
2005 c 514:
See notes following RCW 82.12.808
.
RCW 82.32.600
Annual tax performance reports
—
Electronic filing.
(1) Persons required to file annual tax performance reports under RCW 82.32.534
must electronically file with the department all reports, returns, and any other forms or information the department requires in an electronic format as provided or approved by the department. As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050
.
(2) Any report, return, or any other form or information required to be filed in an electronic format under subsection (1) of this section is not filed until received by the department in an electronic format.
(3) The department may waive the electronic filing requirement in subsection (1) of this section for good cause shown.
[
2017 c 135 s 4
;
2010 c 114 s 136
;
2009 c 461 s 8
. Prior:
2008 c 81 s 14
;
2008 c 15 s 8
; prior:
2007 c 54 s 23
;
2007 c 54 s 22
; prior:
2006 c 354 s 16
;
2006 c 300 s 11
;
2006 c 178 s 9
;
2006 c 177 s 9
;
2006 c 84 s 8
;
2005 c 514 s 1002
.]
NOTES:
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Application
—
Finding
—
Intent
—
2010 c 114:
See notes following RCW 82.32.534
.
Effective date
—
Contingent effective date
—
2009 c 461:
See note following RCW 82.04.280
.
Findings
—
Savings
—
Effective date
—
2008 c 81:
See notes following RCW 82.08.975
.
Effective date
—
2008 c 15:
See note following RCW 82.82.010
.
Severability
—
2007 c 54:
See note following RCW 82.04.050
.
Effective dates
—
2006 c 354:
See note following RCW 82.04.4268
.
Effective dates
—
Contingent effective date
—
2006 c 300:
See note following RCW 82.04.261
.
Effective date
—
Severability
—
2006 c 178:
See notes following RCW 82.75.010
.
Effective date
—
2006 c 177 ss 1-9:
See note following RCW 82.04.250
.
Effective date
—
2006 c 84 ss 2-8:
See note following RCW 82.04.2404
.
Findings
—
Intent
—
2006 c 84:
See note following RCW 82.04.2404
.
Effective date
—
2005 c 514 ss 501 and 1002:
See note following RCW 82.04.4463
.
Part headings not law
—
Severability
—
2005 c 514:
See notes following RCW 82.12.808
.
RCW 82.32.605
Annual tax performance report
—
Hog fuel.
(Expires June 30, 2034.)
(1) Every taxpayer claiming an exemption under RCW 82.08.956
or
82.12.956
must file with the department a complete annual tax performance report under RCW 82.32.534, except that the taxpayer must file a separate tax performance report for each facility owned or operated in the state of Washington.
(2) This section expires June 30, 2034.
[
2023 c 341 s 4
;
2017 c 135 s 5
;
2013 2nd sp.s. c 13 s 1004
.]
NOTES:
Intent
—
2023 c 341:
See note following RCW 82.08.956
.
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Intent
—
Effective date
—
2013 2nd sp.s. c 13:
See notes following RCW 82.08.956
.
RCW 82.32.607
Annual tax performance report for tax exemption for sales of machinery and equipment used in generating electricity.
Every taxpayer claiming an exemption under RCW 82.08.962
or
82.12.962
must file with the department a complete annual tax performance report under RCW 82.32.534, except that the taxpayer must file a separate tax performance report for each facility owned or operated in the state of Washington developed with machinery, equipment, services, or labor for which the exemption under RCW *
43.136.058, 82.08.962, and
82.12.962
is claimed.
[
2017 c 135 s 6
;
2013 2nd sp.s. c 13 s 1503
.]
NOTES:
*Reviser's note:
RCW 43.136.058
expired January 1, 2020.
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Intent
—
2013 2nd sp.s. c 13:
See note following RCW 82.08.962
.
Effective date
—
2013 2nd sp.s. c 13:
See note following RCW 82.08.956
.
RCW 82.32.655
Tax avoidance.
(1) It is the legislature's intent to require all taxpayers to pay their fair share of taxes. To accomplish this purpose, it is the legislature's intent to stop transactions or arrangements that are designed to unfairly avoid taxes.
(2) The department must disregard, for tax purposes, the tax avoidance transactions or arrangements that are described in subsection (3) of this section. The department must deny the tax benefit that would otherwise result from the tax avoidance transaction or arrangement. In determining whether the department must disregard a transaction or arrangement described under subsection (3) of this section, the department may consider:
(a) Whether an arrangement or transaction changes in a meaningful way, apart from its tax effects, the economic positions of the participants in the arrangement when considered as a whole;
(b) Whether substantial nontax reasons exist for entering into an arrangement or transaction;
(c) Whether an arrangement or transaction is a reasonable means of accomplishing a substantial nontax purpose;
(d) An entities' relative contributions to the work that generates income;
(e) The location where work is performed; and
(f) Other relevant factors.
(3) This section applies only to the following transactions or arrangements:
(a) Arrangements that are, in form, a joint venture or similar arrangement between a construction contractor and the owner or developer of a construction project but that are, in substance, substantially guaranteed payments for the purchase of construction services characterized by a failure of the parties' agreement to provide for the contractor to share substantial profits and bear significant risk of loss in the venture;
(b) Arrangements through which a taxpayer attempts to avoid tax under chapter
82.04
RCW by disguising income received, or otherwise avoiding tax on income, from a person that is not affiliated with the taxpayer from business activities that would be taxable in Washington by moving that income to another entity that would not be taxable in Washington; and
(c) Arrangements through which a taxpayer attempts to avoid tax under chapter
82.08
or
82.12
RCW by engaging in a transaction to disguise its purchase or use of tangible personal property by vesting legal title or other ownership interest in another entity over which the taxpayer exercises control in such a manner as to effectively retain control of the tangible personal property.
(4) In determining whether a transaction or arrangement comes within the scope of subsection (3) of this section, the department is not required to prove a taxpayer's subjective intent in engaging in the transaction or arrangement.
(5) The department must adopt rules to assist in determining whether a transaction or arrangement is within the scope of subsection (3) of this section. The adoption of a rule as required under this subsection is not a condition precedent for the department's exercise of the authority provided in this section. Any rules adopted under this section must include examples of transactions that the department will disregard for tax purposes.
(6) This section does not affect the department's authority to apply any other remedies available under statutory or common law.
(7) For purposes of this section, "affiliated" means under common control. "Control" means the possession, directly or indirectly, of more than fifty percent of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise.
[
2010 1st sp.s. c 23 s 201
.]
NOTES:
Application
—
2010 1st sp.s. c 23 ss 201 and 202:
"Except as provided in section 202 of this act, section 201 of this act applies to tax periods beginning January 1, 2006." [
2010 1st sp.s. c 23 s 1703
.]
Effective date
—
2010 1st sp.s. c 23:
"Except as otherwise provided in this act, this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect May 1, 2010." [
2010 1st sp.s. c 23 s 1708
.]
Findings--Intent
—
2010 1st sp.s. c 23:
See notes following RCW 82.04.220
.
RCW 82.32.660
Tax avoidance
—
Statutory application.
(1)(a) The department may not use RCW 82.32.655
to disregard any transaction or arrangement initiated before May 1, 2010, if, in respect to such transaction or arrangement, the taxpayer had reported its tax liability in conformance with either specific written instructions provided by the department to the taxpayer, a determination published under the authority of RCW 82.32.410, or other document made available by the department to the general public.
(b) This section does not apply if the transaction or arrangement engaged in by the taxpayer differs materially from the transaction or arrangement that was addressed in the specific written instructions, published determination, or other document made available by the department to the general public.
(2) RCW 82.32.655
does not apply to any tax periods ending before May 1, 2010, that were included in a completed field audit conducted by the department.
(3) For purposes of this section, "specific written instructions" means tax reporting instructions provided to a taxpayer and which specifically identify the taxpayer to whom the instructions apply. Specific written instructions may be provided as part of an audit, tax assessment, determination, closing agreement, or in response to a binding ruling request.
[
2010 1st sp.s. c 23 s 202
.]
NOTES:
Application
—
2010 1st sp.s. c 23 ss 201 and 202:
See note following RCW 82.32.655
.
Effective date
—
2010 1st sp.s. c 23:
See note following RCW 82.32.655
.
Findings
—
Intent
—
2010 1st sp.s. c 23:
See notes following RCW 82.04.220
.
RCW 82.32.670
Tax evasion by electronic means
—
Seizure and forfeiture.
(1)(a) Automated sales suppression devices, phantom-ware, electronic cash registers or point of sale systems used with automated sales suppression devices or phantom-ware, and any property constituting proceeds traceable to any violation of RCW 82.32.290
(4) are considered contraband and are subject to seizure and forfeiture.
(b) Property subject to forfeiture under (a) of this subsection (1) may be seized by any agent of the department authorized to assess or collect taxes, or law enforcement officer of this state, upon process issued by any superior court or district court having jurisdiction over the property. Seizure without process may be made if:
(i) The seizure is incident to an arrest or a search under a search warrant; or
(ii) The department or the law enforcement officer has probable cause to believe that the property was used or is intended to be used in violation of RCW 82.32.290
(4) and exigent circumstances exist making procurement of a search warrant impracticable.
(2) Forfeiture authorized by this section is deemed to have commenced by the seizure. Notice of seizure must be given to the department if the seizure is made by a law enforcement officer without the presence of any agent of the department. The department must cause notice of the seizure and intended forfeiture to be served on the owner of the property seized, if known, and on any other person known by the department to have a right or interest in the seized property. Such service must be made within fifteen days following the seizure or the department's receipt of notification of the seizure. The notice may be served by any method authorized by law or court rule, by certified mail with return receipt requested, or electronically in accordance with RCW 82.32.135
. Service by certified mail or electronic means is deemed complete upon mailing the notice, electronically sending the notice, or electronically notifying the person or persons entitled to the notice that the notice is available to be accessed by the person or persons, within the fifteen-day period following the seizure or the department's receipt of notification of the seizure.
(3) If no person notifies the department in writing of the person's claim of lawful ownership or right to lawful possession of the item or items seized within thirty days of the date of service of the notice of seizure and intended forfeiture, the item or items seized are deemed forfeited.
(4)(a) If any person notifies the department, in writing, of the person's claim of lawful ownership or lawful right to possession of the item or items seized within thirty days of the date of service of the notice of seizure and intended forfeiture, the person or persons must be afforded a reasonable opportunity to be heard as to the claim. The hearing must be before the director or the director's designee. A hearing and any administrative or judicial review is governed by chapter
34.05
RCW. The burden of proof by a preponderance of the evidence is upon the person claiming to be the lawful owner or the person claiming to have the lawful right to possession of the item or items seized.
(b) The department must return the item or items to the claimant as soon as possible upon a determination that the claimant is the present lawful owner or is lawfully entitled to possession of the item or items seized.
(5) When property is sought to be forfeited on the ground that it constitutes proceeds traceable to a violation of RCW 82.32.290
(4), the department must prove by a preponderance of the evidence that the property constitutes proceeds traceable to a violation of RCW 82.32.290
(4).
(6)(a) When automated sales suppression devices or phantom-ware voluntarily surrendered to an agent of the department, or property forfeited under this section, other than proceeds traceable to a violation of RCW 82.32.290
(4), is no longer required for evidentiary purposes, the department may:
(i) Destroy or have the property destroyed;
(ii) Retain the property for training or other official purposes; or
(iii) Loan or give the property to any law enforcement or tax administration agency of any state, political subdivision or municipal corporation of a state, or the United States for training or other official purposes. For purposes of this subsection (6)(a)(iii), "state" has the same meaning as in RCW 82.04.462
.
(b) When proceeds traceable to a violation of RCW 82.32.290
(4) forfeited under this section are no longer required for evidentiary purposes, they must be deposited into the general fund.
(7) The definitions in this subsection apply to this section:
(a) "Automated sales suppression device" means a software program that falsifies the electronic records of electronic cash registers or other point of sale systems, including transaction data and transaction reports. The term includes the software program, any device that carries the software program, or an internet link to the software program.
(b) "Electronic cash register" means a device that keeps a register or supporting documents through the means of an electronic device or computer system designed to record transaction data for the purpose of computing, compiling, or processing sales transaction data in whatever manner.
(c) "Phantom-ware" means a programming option that is hidden, preinstalled, or installed-at-a-later-time in the operating system of an electronic cash register or other point of sale device, or hardwired into the electronic cash register or other point of sale device, and that can be used to create a virtual second till or may eliminate or manipulate transaction reports that may or may not be preserved in digital formats to represent the true or manipulated record of transactions in the electronic cash register or other point of sale device.
(d) "Transaction data" means information about sales transactions, including items purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.
(e) "Transaction reports" means a report that includes information associated with sales transactions, taxes collected, media totals, and discount voids at an electronic cash register that can be printed on cash register tape at the end of a day or shift, or a report documenting every action at an electronic cash register or other point of sale device and that is stored electronically.
[
2017 c 323 s 401
;
2013 c 309 s 3
.]
NOTES:
Tax preference performance statement exemption
—
Automatic expiration date exemption
—
2017 c 323:
See note following RCW 82.04.040
.
RCW 82.32.680
Tax evasion by electronic means
—
Search and seizure.
When the department has good reason to believe that any property subject to seizure and forfeiture under RCW 82.32.670
is being used or maintained in this state in violation of RCW 82.32.290
(4)(a), the department may make affidavit of facts describing the place or thing to be searched before any judge of any superior or district court in this state. The judge may issue a search warrant directed to a law enforcement officer or agent of the department authorized under RCW 82.32.670
to seize contraband, commanding him or her to diligently search any place or thing as designated in the affidavit and search warrant, and to seize such suspected contraband and hold it until disposed of as provided by RCW 82.32.670
.
[
2013 c 309 s 4
.]
RCW 82.32.700
Administration of the sales and use tax for hospital benefit zones.
(1) As a condition to imposing a sales and use tax under RCW 82.14.465, a city, town, or county must apply to the department at least seventy-five days before the effective date of any such tax. The application shall be in a form and manner prescribed by the department and shall include but is not limited to information establishing that the applicant is eligible to impose such a tax, the anticipated effective date for imposing the tax, the estimated number of years that the tax will be imposed, and the estimated amount of tax revenue to be received in each fiscal year that the tax will be imposed. For purposes of this section, "fiscal year" means the year beginning July 1st and ending the following June 30th. The department shall make available forms to be used for this purpose. As part of the application, a city, town, or county must provide to the department a copy of the ordinance creating the benefit zone as required in RCW 39.100.040
. The department shall rule on completed applications within sixty days of receipt. The department may begin accepting and approving applications August 1, 2006. No new applications shall be considered by the department after the thirtieth day of September of the third year following the year in which the first application was received by the department.
(2) The authority to impose the local option sales and use taxes under RCW 82.14.465
is on a first-come basis. Priority for collecting the taxes authorized under RCW 82.14.465
among approved applicants shall be based on the date that the approved application was received by the department. As a part of the approval of applications under this section, the department shall approve the amount of tax under RCW 82.14.465
that an applicant may impose. The amount of tax approved by the department shall not exceed the lesser of two million dollars or the average amount of tax revenue that the applicant estimates that it will receive in all fiscal years through the imposition of a sales and use tax under RCW 82.14.465
. A city, town, or county shall not receive, in any fiscal year, more revenues from taxes imposed under RCW 82.14.465
than the amount approved by the department. The department shall not approve the receipt of more credit against the state sales and use tax than is authorized under subsection (3) of this section.
(3) No more than two million dollars of credit against the state sales and use tax provided for under RCW 82.14.465
(2), may be received in any fiscal year by all cities, towns, and counties imposing a tax under RCW 82.14.465
.
(4)(a) The credit against the state sales and use tax shall be available to any city, town, or county imposing a tax under RCW 82.14.465
only as long as the city, town, or county has outstanding indebtedness under chapter
39.100
RCW or the tax allocation revenues are used for public improvement costs, but in no case shall the credit be available for more than thirty years after the tax is first imposed by the city, town, or county.
(b) Local governments may pledge any receipts from taxes levied and collected under chapter
39.100
RCW and RCW 82.14.465
to the repayment of its bonds or bond anticipation notes. A local government shall notify the department when all outstanding indebtedness secured in whole or in part from receipts is no longer outstanding or tax allocation revenues are no longer used for public improvement costs, and the credit provided for under RCW 82.14.465
shall be terminated.
(5) The department may adopt any rules under chapter
34.05
RCW it considers necessary for the administration of chapter
39.100
RCW.
[
2007 c 266 s 9
;
2006 c 111 s 9
.]
NOTES:
Finding
—
Application
—
Effective date
—
2007 c 266:
See notes following RCW 39.100.010
.
Effective date
—
2006 c 111:
See RCW 39.100.900
.
RCW 82.32.710
Professional employer organizations
—
Eligibility for tax incentives
—
Responsibility for tax performance reports.
(1) A client under the terms of a professional employer agreement is deemed to be the sole employer of a covered employee for purposes of eligibility for any tax credit, exemption, or other tax incentive, arising as the result of the employment of covered employees, provided in RCW *
82.04.4333, 82.04.44525, 82.04.448, **
82.04.4483, 82.08.965, 82.12.965, 82.16.0495, or
82.60.049
or chapter
82.62
or ***
82.70
RCW, or any other provision in this title. A client, and not the professional employer organization, is entitled to the benefit of any tax credit, exemption, or other tax incentive arising as the result of the employment of covered employees of that client.
(2) A client under the terms of a professional employer agreement is deemed to be the sole employer of a covered employee for purposes of tax performance reports that require the reporting of employment information relating to covered employees of the client, as provided in RCW 82.32.534
. A client, and not the professional employer organization, is required to complete any tax performance report that requires the reporting of employment information relating to covered employees of that client.
(3) For the purposes of this section, "client," "covered employee," "professional employer agreement," and "professional employer organization" have the same meanings as in RCW 82.04.540
.
[
2017 c 135 s 7
;
2010 c 114 s 137
;
2006 c 301 s 4
.]
NOTES:
Reviser's note:
*(1) RCW 82.04.4333
was repealed by
2015 c 86 s 101
.
**(2) RCW 82.04.4483
was repealed by
2017 c 323 s 504
; and subsequently repealed by
2018 c 22 s 14
.
***(3) Chapter
82.70
RCW expired July 1, 2025.
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Application
—
Finding
—
Intent
—
2010 c 114:
See notes following RCW 82.32.534
.
Effective date
—
2006 c 301:
"This act takes effect July 1, 2006." [
2006 c 301 s 10
.]
Act does not affect application of Title
50
or
51
RCW
—
2006 c 301:
"The provisions of this act do not affect the application of Title
50
or
51
RCW to the reporting requirement or tax liabilities of professional employer organizations or their clients." [
2006 c 301 s 9
.]
RCW 82.32.715
Monetary allowances
—
Streamlined sales and use tax agreement.
(1) The department must adopt by rule monetary allowances for certified service providers selected by model 1 sellers and also for model 2 sellers. The department may be guided by the provisions for monetary allowances adopted by the governing board of the agreement to determine the amount of the allowances and the conditions under which they are allowed. The monetary allowances must be reasonable and provide adequate incentive for certified service providers and sellers to collect and remit sales and use taxes under the agreement. Monetary allowances will be funded solely from state sales and use taxes. The department may modify its rules for monetary allowances in light of the holding of the United States supreme court in
South Dakota v. Wayfair, Inc.
, Docket No. 17-494, issued June 21, 2018.
(2) For certified service providers, the monetary allowance may include a base rate that applies to taxable transactions processed by the certified service provider.
(3) For model 2 sellers, the monetary allowance may include a base rate and a percentage of revenue generated by a seller registering under RCW 82.32.030
(3), but may not exceed a period of twenty-four months.
[
2019 c 8 s 403
;
2007 c 6 s 301
.]
NOTES:
Effective date
—
2019 c 8 ss 101, 104, 106, 201, 402-405, and 501:
See note following RCW 82.02.250
.
Existing rights and liability
—
Retroactive application
—
2019 c 8:
See notes following RCW 82.02.250
.
Part headings not law
—
Savings
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.720
Vendor compensation
—
Streamlined sales and use tax agreement.
(1) The department may adopt by rule vendor compensation for sellers collecting and remitting sales and use taxes. The vendor compensation may include a base rate or a percentage of tax revenue collected by the seller, and may vary by type of seller. The department may be guided by the findings of the cost of collection study performed under the agreement, by cost of collection studies performed by the department, and by vendor compensation provided by other states, to determine reasonable vendor compensation for sellers for the costs to collect and remit sales and use taxes. Vendor compensation will be funded solely from state sales and use taxes.
(2) A seller is not entitled to vendor compensation while the seller or its certified service provider receives a monetary allowance under RCW 82.32.715
.
[
2007 c 6 s 302
.]
NOTES:
Reviser's note:
The contingency in section 302(1)(b), chapter 6, Laws of 2007 appears to have occurred June 21, 2018, causing this section to take effect June 21, 2018.
Contingent effective date
—
2007 c 6 s 302:
"(1) Section 302 of this act takes effect when:
(a) The United States congress grants individual states the authority to impose sales and use tax collection duties on remote sellers; or
(b) It is determined by a court of competent jurisdiction, in a judgment not subject to review, that a state can impose sales and use tax collection duties on remote sellers.
(2) The department of revenue shall provide notice to affected taxpayers, the legislature, and others as deemed appropriate by the department, if either of the contingencies in this section occurs." [
2007 c 6 s 1705
.]
Part headings not law
—
Savings
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.725
Amnesty
—
Streamlined sales and use tax agreement.
(1) No assessment for taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW, or related penalties or interest, may be made by the department against a seller who:
(a) Within twelve months of the effective date of this state becoming a member state of the agreement, registers under RCW 82.32.030
(3) to collect and remit to the department the applicable taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW on sales made to buyers in this state in accordance with the terms of the agreement, if the seller was not otherwise registered in this state in the twelve-month period preceding the effective date of this state becoming a member state of the agreement; and
(b) Continues to be registered and continues to collect and remit to the department the applicable taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW for a period of at least thirty-six months, absent the seller's fraud or intentional misrepresentation of a material fact.
(2) The provisions of subsection (1) of this section preclude an assessment for taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW for sales made to buyers during the period the seller was not registered in this state.
(3) The provisions of this section do not apply to any seller with respect to:
(a) Any matter or matters for which the seller, before registering to collect and remit the applicable taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW, received notice from the department of the commencement of an audit and which audit is not yet finally resolved including any related administrative and judicial processes;
(b) Taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW and collected or remitted to the department by the seller; or
(c) That seller's liability for taxes imposed or authorized under chapters
82.08, 82.12, and
82.14
RCW in that seller's capacity as a buyer.
(4) The limitation periods for making an assessment or correction of an assessment prescribed in RCW *
82.32.050
(3) and
82.32.100
(3) do not run during the thirty-six month period in subsection (1)(b) of this section.
[
2007 c 6 s 401
.]
NOTES:
*Reviser's note:
RCW 82.32.050
was amended by 2008 c 181 s 501, changing subsection (3) to subsection (4).
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.730
Sourcing
—
Streamlined sales and use tax agreement.
(1) Except as provided in subsections (5) through (8) of this section, for purposes of collecting or paying sales or use taxes to the appropriate jurisdictions, all sales at retail shall be sourced in accordance with this subsection and subsections (2) through (4) of this section.
(a) When tangible personal property, an extended warranty, a digital good, digital code, digital automated service, or other service defined as a retail sale under RCW 82.04.050
is received by the purchaser at a business location of the seller, the sale is sourced to that business location.
(b) When the tangible personal property, extended warranty, digital good, digital code, digital automated service, or other service defined as a retail sale under RCW 82.04.050
is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser or the purchaser's donee, designated as such by the purchaser, occurs, including the location indicated by instructions for delivery to the purchaser or donee, known to the seller.
(c) When (a) and (b) of this subsection do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith.
(d) When (a), (b), and (c) of this subsection do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, when use of this address does not constitute bad faith.
(e) When (a), (b), (c), or (d) of this subsection do not apply, including the circumstance where the seller is without sufficient information to apply those provisions, then the location shall be determined by the address from which tangible personal property was shipped, from which the digital good or digital code or the computer software delivered electronically was first available for transmission by the seller, or from which the extended warranty or digital automated service or other service defined as a retail sale under RCW 82.04.050
was provided, disregarding for these purposes any location that merely provided the digital transfer of the product sold.
(2) The lease or rental of tangible personal property, other than property identified in subsection (3) or (4) of this section, shall be sourced as provided in this subsection.
(a) For a lease or rental that requires recurring periodic payments, the first periodic payment is sourced the same as a retail sale in accordance with subsection (1) of this section. Periodic payments made subsequent to the first payment are sourced to the primary property location for each period covered by the payment. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location is not altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.
(b) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with subsection (1) of this section.
(c) This subsection (2) does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
(3) The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment shall be sourced as provided in this subsection.
(a) For a lease or rental that requires recurring periodic payments, each periodic payment is sourced to the primary property location. The primary property location is as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. This location is not altered by intermittent use at different locations.
(b) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with subsection (1) of this section.
(c) This subsection does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
(4) The retail sale, including lease or rental, of transportation equipment shall be sourced the same as a retail sale in accordance with subsection (1) of this section.
(5) This subsection applies to direct mail transactions not governed by subsection (6) of this section.
(a) This subsection (5)(a) applies to sales of advertising and promotional direct mail.
(i) A purchaser of advertising and promotional direct mail may provide the seller with either:
(A) A direct pay permit;
(B) A streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written statement approved, authorized, or accepted by the department); or
(C) Information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients.
(ii) If the purchaser provides the permit, certificate, or statement referred to in (a)(i)(A) or (B) of this subsection (5), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving advertising and promotional direct mail to which the permit, certificate, or statement applies. The purchaser must source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered to the recipients and must report and pay any applicable tax due.
(iii) If the purchaser provides the seller information showing the jurisdictions to which the advertising and promotional direct mail is to be delivered to recipients, the seller must source the sale to the jurisdictions to which the advertising and promotional direct mail is to be delivered and must collect and remit the applicable tax. In the absence of bad faith, the seller is relieved of any further obligation to collect any additional tax on the sale of advertising and promotional direct mail where the seller has sourced the sale according to the delivery information provided by the purchaser.
(iv) If the purchaser does not provide the seller with any of the items listed in (a)(i)(A), (B), or (C) of this subsection (5), the sale must be sourced according to subsection (1)(e) of this section.
(b) This subsection (5)(b) applies to sales of other direct mail.
(i) Except as otherwise provided in this subsection (5)(b), sales of other direct mail are sourced in accordance with subsection (1)(c) of this section.
(ii) A purchaser of other direct mail may provide the seller with either:
(A) A direct pay permit; or
(B) A streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written statement approved, authorized, or accepted by the department).
(iii) If the purchaser provides the permit, certificate, or statement referred to in (b)(ii)(A) or (B) of this subsection (5), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit any tax on any transaction involving other direct mail to which the permit, certificate, or statement applies. Notwithstanding (b)(i) of this subsection (5), the sale must be sourced to the jurisdictions to which the other direct mail is to be delivered to the recipients, and the purchaser must report and pay any applicable tax due.
(6)(a) This subsection applies only with respect to transactions in which direct mail is delivered or distributed from a location within this state to a location within this state.
(b) If the purchaser of direct mail provides the seller with a direct pay permit or a streamlined sales and use tax agreement certificate of exemption claiming direct mail (or other written statement approved, authorized, or accepted by the department), the seller, in the absence of bad faith, is relieved of all obligations to collect, pay, or remit the applicable tax on any transaction involving direct mail to which the permit, certificate, or statement applies. The purchaser must report and pay any applicable tax due. A streamlined sales and use tax agreement certificate of exemption claiming direct mail will remain in effect for all future sales of direct mail by the seller to the purchaser until it is revoked in writing.
(c)(i) Except as provided in (b), (c)(ii), and (c)(iii) of this subsection (6), the seller must collect the tax according to subsection (1)(e) of this section.
(ii) To the extent the seller knows that a portion of the sale of direct mail will be delivered or distributed to locations in another state, the seller must collect the tax on that portion according to subsection (5) of this section.
(iii) Notwithstanding (c)(i) and (ii) of this subsection (6), a seller may elect to use the provisions of subsection (5) of this section to source all sales of advertising and promotional direct mail.
(7) The following are sourced to the location at or from which delivery is made to the consumer:
(a) A retail sale of watercraft;
(b) A retail sale of a modular home, manufactured home, or mobile home;
(c) A retail sale, excluding the lease and rental, of a motor vehicle, trailer, semitrailer, or aircraft, that do not qualify as transportation equipment; and
(d) Florist sales. In the case of a sale in which one florist takes an order from a customer and then communicates that order to another florist who delivers the items purchased to the place designated by the customer, the location at or from which the delivery is made to the consumer is deemed to be the location of the florist originally taking the order.
(8)(a) A retail sale of the providing of telecommunications services, as that term is defined in RCW 82.04.065, is sourced in accordance with RCW 82.32.520
.
(b) A retail sale of the providing of ancillary services, as that term is defined in RCW 82.04.065, is sourced to the customer's place of primary use of the telecommunications services in respect to which the ancillary services are associated with or incidental to. The definitions of "customer" and "place of primary use" in RCW 82.32.520
apply to this subsection (8)(b).
(9) The definitions in this subsection apply throughout this section.
(a) "Advertising and promotional direct mail" means printed material that meets the definition of direct mail, the primary purpose of which is to attract public attention to a product, person, business, or organization, or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization. As used in this subsection (9)(a), the word "product" means tangible personal property, a product transferred electronically, or a service.
(b) "Delivered electronically" means delivered to the purchaser by means other than tangible storage media.
(c) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list provided by the purchaser or at the direction of the purchaser when the cost of the items are not billed directly to the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. "Direct mail" does not include multiple items of printed material delivered to a single address.
(d)(i) "Other direct mail" means any direct mail that is not advertising and promotional direct mail, regardless of whether advertising and promotional direct mail is included in the same mailing. The term includes, but is not limited to:
(A) Transactional direct mail that contains personal information specific to the addressee including, but not limited to, invoices, bills, statements of account, and payroll advices;
(B) Any legally required mailings including, but not limited to, privacy notices, tax reports, and stockholder reports; and
(C) Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents including, but not limited to, newsletters and informational pieces.
(ii) Other direct mail does not include the development of billing information or the provision of any data processing service that is more than incidental.
(e) "Florist sales" means the retail sale of tangible personal property by a florist. For purposes of this subsection (9)(e), "florist" means a person whose primary business activity is the retail sale of fresh cut flowers, potted ornamental plants, floral arrangements, floral bouquets, wreaths, or any similar products, used for decorative and not landscaping purposes.
(f) "Receive" and "receipt" mean taking possession of tangible personal property, making first use of digital automated services or other services, or taking possession or making first use of digital goods or digital codes, whichever comes first. "Receive" and "receipt" do not include possession by a shipping company on behalf of the purchaser.
(g) "Transportation equipment" means:
(i) Locomotives and railcars that are used for the carriage of persons or property in interstate commerce;
(ii) Trucks and truck tractors with a gross vehicle weight rating of ten thousand one pounds or greater, trailers, semitrailers, or passenger buses that are:
(A) Registered through the international registration plan; and
(B) Operated under authority of a carrier authorized and certificated by the United States department of transportation or another federal authority to engage in the carriage of persons or property in interstate commerce;
(iii) Aircraft that are operated by air carriers authorized and certificated by the United States department of transportation or another federal or foreign authority to engage in the carriage of persons or property in interstate or foreign commerce; or
(iv) Containers designed for use on and component parts attached or secured on the items described in (g)(i) through (iii) of this subsection.
(10) In those instances where there is no obligation on the part of a seller to collect or remit this state's sales or use tax, the use of tangible personal property, digital good, digital code, or of a digital automated service or other service, subject to use tax, is sourced to the place of first use in this state. The definition of use in RCW 82.12.010
applies to this subsection.
[
2010 c 106 s 229
. Prior:
2009 c 535 s 704
;
2009 c 289 s 1
;
2008 c 324 s 1
;
2007 c 6 s 501
.]
NOTES:
Effective date
—
2010 c 106:
See note following RCW 35.102.145
.
Intent
—
Construction
—
2009 c 535:
See notes following RCW 82.04.192
.
Effective date
—
2008 c 324:
"This act takes effect July 1, 2008." [
2008 c 324 s 2
.]
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.735
Confidentiality and privacy
—
Certified service providers
—
Streamlined sales and use tax agreement.
(1) A fundamental precept of allowing the use of a certified service provider is to preserve the privacy of consumers by protecting their anonymity. With very limited exceptions, a certified service provider shall perform its tax calculation, remittance, and reporting functions without retaining the personally identifiable information of consumers.
(2) The department shall provide public notification to consumers, including purchasers claiming exemption from tax, of its practices relating to the collection, use, and retention of personally identifiable information.
(3) When personally identifiable information that has been collected and retained is no longer required to ensure the validity of exemptions from taxation by reason of the consumer's status or the intended use of the goods or services purchased, the information shall no longer be retained by the state of Washington.
(4) When personally identifiable information regarding an individual is retained by or on behalf of the state of Washington, this state shall provide reasonable access for the individual to his or her own information and a right to correct any inaccurately recorded information.
(5) If anyone other than a member state of the agreement, or other than a person authorized by Washington law or the agreement, seeks to discover personally identifiable information, the state of Washington shall make a reasonable and timely effort to notify the individual of the request.
(6) The provisions of this section may be enforced by petitioning the superior court of Thurston county for injunctive relief.
[
2007 c 6 s 601
.]
NOTES:
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.740
Taxability matrix
—
Liability
—
Streamlined sales and use tax agreement.
(1) The department must complete a taxability matrix maintained by the member states of the agreement in downloadable format. The matrix contains terms defined in the agreement and the disclosure of the state's practices in the administration of sales and use taxes as required under section 335 of the agreement. The department must provide notice of changes in the taxability of products or services listed in the matrix. The department must also provide notice of changes in the state's treatment of practices identified in the matrix.
(2)(a) Sellers and certified service providers are relieved from liability to the state and to local jurisdictions for having charged or collected the incorrect amount of sales or use tax if the error resulted from reliance on erroneous information provided by the department in the taxability matrix.
(b) Beginning July 1, 2015, if the taxability matrix is amended, sellers and certified service providers are relieved from liability to the state and to local jurisdictions to the extent that the seller or certified service provider relied on the immediately preceding version of the state's taxability matrix. Relief under this subsection (2)(b) is available until the first day of the calendar month that is at least thirty days after the department submits notice of a change to the state's taxability matrix to the streamlined sales tax governing board.
[
2015 c 86 s 401
;
2007 c 6 s 701
.]
NOTES:
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.745
Software certification by department
—
Classifications
—
Liability
—
Streamlined sales and use tax agreement.
(1) The department shall review software submitted to the governing board of the agreement for certification as a certified automated system under the terms of the agreement. The review shall include a determination of whether the software adequately classifies this state's product-based sales tax exemptions. Upon completing the review, the department shall certify to the governing board its acceptance or rejection of the classifications made by the system.
(2) Certified service providers and model 2 sellers shall be held harmless and are not liable for sales or use taxes, nor interest or penalties on those taxes, not collected due to reliance on the certification of the department under subsection (1) of this section.
(3) The relief from liability provided to certified service providers and model 2 sellers under subsection (2) of this section does not apply with respect to the incorrect classification of an item or transaction into a product-based exemption certified by the department unless that item or transaction is contained in a listing of items or transactions within a product definition approved by the governing board or the department.
(4) If the department determines that an item or transaction is incorrectly classified as to its taxability, it shall notify the certified service provider or model 2 seller of the incorrect classification. The certified service provider or model 2 seller has ten days to revise the classification after receipt of notice from the department. Upon the expiration of the ten days, the certified service provider or model 2 seller is liable for the failure to collect the correct amount of sales or use taxes.
[
2007 c 6 s 702
.]
NOTES:
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.750
Purchaser liability
—
Penalty
—
Streamlined sales and use tax agreement.
(1) Purchasers are relieved from liability for tax, interest, and penalty for having failed to pay the correct amount of sales or use tax in any of the following circumstances:
(a) A purchaser's seller or certified service provider relied on erroneous data provided by the department on tax rates, boundaries, taxing jurisdiction assignments, or in the taxability matrix completed by the department pursuant to RCW 82.32.740
;
(b) A purchaser holding a direct pay permit relied on erroneous data provided by the department on tax rates, boundaries, taxing jurisdiction assignments, or in the taxability matrix completed by the department pursuant to RCW 82.32.740
;
(c) A purchaser relied on erroneous data provided by the department in the taxability matrix completed by the department pursuant to RCW 82.32.740
; or
(d) A purchaser relied on erroneous data provided by the department on tax rates, boundaries, or taxing jurisdiction assignments.
(2) For purposes of this section, "penalty" means an amount imposed for noncompliance that is not fraudulent, willful, or intentional that is in addition to the correct amount of sales or use tax and interest.
[
2007 c 6 s 703
.]
NOTES:
Part headings not law
—
Savings
—
Effective date
—
Severability
—
2007 c 6:
See notes following RCW 82.32.020
.
Findings
—
Intent
—
2007 c 6:
See note following RCW 82.14.390
.
RCW 82.32.762
Remote seller nexus
—
Streamlined sales and use tax agreement or federal law conflict with state law.
(1) If the department determines that a change, taking effect after March 14, 2019, in the streamlined sales and use tax agreement or federal law creates a conflict with any provision of chapter 8, Laws of 2019, such conflicting provision or provisions of chapter 8, Laws of 2019, including any related provisions that would not function as originally intended, have no further force and effect as of the date the change in the streamlined sales and use tax agreement or federal law becomes effective.
(2) For purposes of this section:
(a) A change in federal law conflicts with chapter 8, Laws of 2019 if the change clearly prevents states from imposing sales and use tax collection obligations on remote sellers to the extent provided for under chapter 8, Laws of 2019.
(b) A change in the streamlined sales and use tax agreement conflicts with chapter 8, Laws of 2019 if one or more provisions of chapter 8, Laws of 2019 causes this state to be found out of compliance with the streamlined sales and use tax agreement by its governing board.
(3)(a) If the department makes a determination under this section that a change in federal law or the streamlined sales and use tax agreement conflicts with one or more provisions of chapter 8, Laws of 2019:
(i) For purposes of conflicts between the streamlined sales and use tax agreement and chapter 8, Laws of 2019, the department may adopt rules in accordance with chapter
34.05
RCW, including emergency rules, that are consistent with the streamlined sales and use tax agreement; and
(ii) For purposes of conflicts between federal law and chapter 8, Laws of 2019, the department must, by rule or rules adopted in accordance with chapter
34.05
RCW, including emergency rules:
(A) Impose sales and use tax collection obligations and business and occupation tax on remote sellers to the fullest extent allowed under state and federal law, which may include adopting provisions identical or substantially similar to those in sections 202 and 204(6)(c)(ii), chapter 5, Laws of 2015 3rd sp. sess.; and
(B) Implement election, notice, and reporting provisions substantially similar to those in sections 202 through 207, chapter 28, Laws of 2017 3rd sp. sess. The department must impose such election, notice, and reporting provisions only on remote sellers and marketplace facilitators against whom the department is unable to enforce a tax collection obligation as a result of a change in federal law. The department must not impose election, notice, and reporting provisions on referrers as defined in section 204, chapter 28, Laws of 2017 3rd sp. sess. The department must impose penalties for failure to comply with notice or reporting requirements consistent with those penalties imposed in section 206, chapter 28, Laws of 2017 3rd sp. sess.
(b) For purposes of (a)(i) and (ii) of this subsection (3), the department must include information on its website informing taxpayers and the public (i) of the provision or provisions of chapter 8, Laws of 2019 that will have no further force and effect, (ii) when such change will become effective, and (iii) about how to participate in any rule making conducted by the department in accordance with (a)(i) and (ii) of this subsection (3).
(4) For purposes of this section, "remote seller" and "marketplace facilitator" have the same meaning as in RCW 82.13.010
through June 30, 2019, and RCW 82.08.010
beginning July 1, 2019.
[
2019 c 8 s 404
;
2015 3rd sp.s. c 5 s 205
.]
NOTES:
Effective date
—
2019 c 8 ss 101, 104, 106, 201, 402-405, and 501:
See note following RCW 82.02.250
.
Existing rights and liability
—
Retroactive application
—
2019 c 8:
See notes following RCW 82.02.250
.
Construction
—
2017 c 323:
See note following RCW 82.08.052
.
Effective dates
—
Finding
—
Intent
—
2015 3rd sp.s. c 5:
See notes following RCW 82.08.052
.
RCW 82.32.765
Local revitalization financing
—
Reporting requirements.
(1) A sponsoring local government receiving a project award under RCW 39.104.100
must provide a report to the department by March 1st of each year beginning March 1st after the project award has been approved. The report must contain the following information:
(a) The amounts of local property tax allocation revenues received in the preceding calendar year broken down by sponsoring local government and participating taxing district;
(b) The amount of state property tax allocation revenues estimated to have been received by the state in the preceding calendar year;
(c) The amount of local sales and use tax and other revenue from local public sources dedicated by any participating local government used for the payment of bonds under RCW 39.104.110
and public improvement costs within the revitalization area on a pay-as-you-go basis in the preceding calendar year;
(d) The amount of local sales and use tax dedicated by the sponsoring local government, as it relates to the sponsoring local government's local sales and use tax increment, used for the payment of bonds under RCW 39.104.110
and public improvement costs within the revitalization area on a pay-as-you-go basis;
(e) The amounts, other than those listed in (a) through (d) of this subsection, from local public sources, broken down by type or source, used for payment of bonds under RCW 39.104.110
or public improvement costs within the revitalization area on a pay-as-you-go basis in the preceding calendar year;
(f) The anticipated date when bonds under RCW 39.104.110
are expected to be retired;
(g) The names of any businesses locating within the revitalization area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local revitalization financing;
(h) An estimate of the cumulative number of permanent jobs created in the revitalization area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local revitalization financing;
(i) An estimate of the average wages and benefits received by all employees of businesses locating within the revitalization area as a result of the public improvements undertaken by the sponsoring local government and financed in whole or in part with local revitalization financing;
(j) A list of public improvements financed by bonds issued under RCW 39.104.110
and the date on which the bonds are anticipated to be retired;
(k) That the sponsoring local government is in compliance with RCW 39.104.030
;
(l) At least once every three years, updated estimates of the amounts of state and local sales and use tax increments estimated to have been received since the approval of the project award under RCW 39.104.100
;
(m) The amount of revenues from local public sources that (i) were expended in prior years for the payment of bonds under RCW 39.104.110
and public improvement costs within the revitalization area on a pay-as-you-go basis in prior calendar years that were in excess of the project award amount for that year and are carried forward for dedication in future years, (ii) are deemed dedicated to payment of bonds or public improvement costs in the calendar year for which the report is prepared, and (iii) remain available for dedication in future years; and
(n) Any other information required by the department to enable the department to fulfill its duties under this chapter and RCW 82.14.510
.
(2) The department must make a report available to the public and the legislature by June 1st of each year. The report must include a summary of the information provided to the department by sponsoring local governments under subsection (1) of this section.
[
2016 c 207 s 5
;
2010 c 164 s 10
;
2009 c 270 s 501
.]
RCW 82.32.770
Sourcing compliance
—
Taxpayer relief
—
Collection and remittance errors.
(1) Notwithstanding any other provision in this chapter, no interest or penalties may be imposed on any taxpayer because of errors in collecting or remitting the correct amount of local sales or use tax arising out of changes in local sales and use tax sourcing rules implemented under RCW 82.14.490
and section 502, chapter 6, Laws of 2007 if the taxpayer demonstrates that it made a good faith effort to comply with the sourcing rules.
(2) The relief from penalty and interest provided by subsection (1) of this section only applies to taxpayers with a gross income of the business of less than five hundred thousand dollars in the prior calendar year.
(3) The relief from penalty and interest provided by subsection (1) of this section does not apply with respect to sales occurring after December 31, 2012.
[
2009 c 289 s 5
.]
RCW 82.32.780
Reseller's permit
—
Taxpayer application.
(1)(a) Taxpayers seeking to obtain a new reseller permit or to renew or reinstate a reseller permit, other than taxpayers subject to the provisions of RCW 82.32.783, must apply to the department in a form and manner prescribed by the department. The department must use its best efforts to rule on applications within sixty days of receiving a complete application. If the department fails to rule on an application within sixty days of receiving a complete application, the taxpayer may either request a review as provided in subsection (6) of this section or resubmit the application. Nothing in this subsection may be construed as preventing the department from ruling on an application more than sixty days after the department received the application.
(b) An application must be denied if:
(i) The department determines that, based on the nature of the applicant's business, the applicant is not entitled to make purchases at wholesale or is otherwise prohibited from using a reseller permit;
(ii) The application contains any material misstatement; or
(iii) The application is incomplete.
(c) The department may also deny an application if it determines that denial would be in the best interest of collecting taxes due under this title.
(d) The department's decision to approve or deny an application may be based on tax returns previously filed with the department by the applicant, a current or previous examination of the applicant's books and records by the department, information provided by the applicant in the master application and the reseller permit application, and other information available to the department.
(e) The department must refuse to accept an application to renew a reseller permit that is received more than ninety days before the expiration of the reseller permit.
(2) Notwithstanding subsection (1) of this section, the department may issue or renew a reseller permit for a taxpayer that has not applied for the permit or renewal of the permit if it appears to the department's satisfaction, based on the nature of the taxpayer's business activities and any other information available to the department, that the taxpayer is entitled to make purchases at wholesale.
(3)(a) Except as otherwise provided in this section, reseller permits issued, renewed, or reinstated under this section will be valid for a period of forty-eight months from the date of issuance, renewal, or reinstatement.
(b)(i) A reseller permit is valid for a period of twenty-four months and may be renewed for the period prescribed in (a) of this subsection (3) if the permit is issued to a taxpayer who:
(A) Is not registered with the department under RCW 82.32.030
;
(B) Has been registered with the department under RCW 82.32.030
for a continuous period of less than one year as of the date that the department received the taxpayer's application for a reseller permit;
(C) Was on nonreporting status as authorized under RCW 82.32.045
(5) at the time that the department received the taxpayer's application for a reseller permit or to renew or reinstate a reseller permit;
(D) Has filed tax returns reporting no business activity for purposes of sales and business and occupation taxes for the twelve-month period immediately preceding the date that the department received the taxpayer's application for a reseller permit or to renew or reinstate a reseller permit; or
(E) Has failed to file tax returns covering any part of the twelve-month period immediately preceding the department's receipt of the taxpayer's application for a reseller permit or to renew or reinstate a reseller permit.
(ii) The provisions of this subsection (3)(b) do not apply to reseller permits issued to any business owned by a federally recognized Indian tribe or by an enrolled member of a federally recognized Indian tribe, if the business does not engage in any business activity that subjects the business to any tax imposed by the state under chapter
82.04
RCW. Permits issued to such businesses are valid for the period provided in (a) of this subsection (3).
(iii) Nothing in this subsection (3)(b) may be construed as affecting the department's right to deny a taxpayer's application for a reseller permit or to renew or reinstate a reseller permit as provided in subsection (1)(b) and (c) of this section.
(c) A reseller permit is no longer valid if the permit holder's certificate of registration is revoked, the permit holder's tax reporting account is closed by the department, or the permit holder otherwise ceases to engage in business.
(d) The department may provide by rule for a uniform expiration date for reseller permits issued, renewed, or reinstated under this section, if the department determines that a uniform expiration date for reseller permits will improve administrative efficiency for the department. If the department adopts a uniform expiration date by rule, the department may extend or shorten the twenty-four or forty-eight month period provided in (a) and (b) of this subsection for a period not to exceed six months as necessary to conform the reseller permit to the uniform expiration date.
(4)(a) The department may revoke a taxpayer's reseller permit for any of the following reasons:
(i) The taxpayer used or allowed or caused its reseller permit to be used to purchase any item or service without payment of sales tax, but the taxpayer or other purchaser was not entitled to use the reseller permit for the purchase;
(ii) The department issued the reseller permit to the taxpayer in error;
(iii) The department determines that the taxpayer is no longer entitled to make purchases at wholesale; or
(iv) The department determines that revocation of the reseller permit would be in the best interest of collecting taxes due under this title.
(b) The notice of revocation must be in writing and is effective on the date specified in the revocation notice. The notice must also advise the taxpayer of its right to a review by the department.
(c) The department may refuse to reinstate a reseller permit revoked under (a)(i) of this subsection until all taxes, penalties, and interest due on any improperly purchased item or service have been paid in full. In the event a taxpayer whose reseller permit has been revoked under this subsection reorganizes, the new business resulting from the reorganization is not entitled to a reseller permit until all taxes, penalties, and interest due on any improperly purchased item or service have been paid in full.
(d) For purposes of this subsection, "reorganize" or "reorganization" means: (i) The transfer, however effected, of a majority of the assets of one business to another business where any of the persons having an interest in the ownership or management in the former business maintain an ownership or management interest in the new business, either directly or indirectly; (ii) a mere change in identity or form of ownership, however effected; or (iii) the new business is a mere continuation of the former business based on significant shared features such as owners, personnel, assets, or general business activity.
(5) The department may provide the public with access to reseller permit numbers on its website, including the name of the permit holder, the status of the reseller permit, the expiration date of the permit, and any other information that is disclosable under RCW 82.32.330
(3)(k).
(6) The department must provide by rule for the review of the department's decision to deny, revoke, or refuse to reinstate a reseller permit or the department's failure to rule on an application within the time prescribed in subsection (1)(a) of this section. Such review must be consistent with the requirements of chapter
34.05
RCW.
(7) As part of its continuing efforts to educate taxpayers on their sales and use tax responsibilities, the department will educate taxpayers on the appropriate use of a reseller permit or other documentation authorized under RCW 82.04.470
and the consequences of misusing such permits or other documentation.
[
2020 c 139 s 40
;
2010 c 112 s 2
;
2009 c 563 s 201
.]
NOTES:
Effective date
—
2010 c 112 ss 2, 3, 11, 12, and 15:
"Sections 2, 3, 11, 12, and 15 of this act take effect July 1, 2010." [
2010 c 112 s 18
.]
Retroactive application
—
2010 c 112:
"(1) Except as provided in subsection (2) of this section, this act applies retroactively to January 1, 2010, as well as prospectively.
(2) Sections 2, 3, 11, 12, and 15 of this act apply prospectively only." [
2010 c 112 s 17
.]
Finding
—
Intent
—
2010 c 112; 2009 c 563:
"The legislature finds that the department of revenue's 2008 compliance study estimates that sales tax noncompliance exceeds well over one hundred million dollars annually in unpaid state and local sales and use taxes.
The legislature intends to address this significant problem by eliminating the use of resale certificates to document wholesale purchases. Resale certificates will be replaced with reseller permits, which will be issued by the department of revenue only to those businesses that make wholesale purchases, such as retailers, wholesalers, manufacturers, and qualified contractors. Businesses that do not make wholesale purchases, such as most service businesses, will not be entitled to a reseller permit." [
2010 c 112 s 1
;
2009 c 563 s 101
.]
Construction
—
2009 c 563:
"This act must be liberally construed in order to carry out its purposes." [
2009 c 563 s 402
.]
Effective date
—
2009 c 563:
"This act takes effect January 1, 2010." [
2009 c 563 s 403
.]
Reports and recommendations
—
2009 c 563:
"By December 1, 2009, the finance committee of the house of representatives and the joint legislative task force on the underground economy in the Washington state construction industry, shall each prepare a report that reviews the issues and concerns that need to be addressed by the legislature as a result of the changes made in this act. The reports shall include any recommendations on potential modifications to the provisions of this act. The department of revenue shall provide necessary support and information." [
2009 c 563 s 405
.]
Construction
—
2009 c 563:
"The effective date in section 403 of this act may not be construed as preventing the department of revenue from accepting applications for, or issuing, seller's permits before January 1, 2010, adopting rules, or taking any other action before January 1, 2010, necessary to ensure the effective implementation of this act." [
2009 c 563 s 404
.]
RCW 82.32.783
Reseller's permit
—
Contractor application.
(1)(a) Contractors seeking a new reseller permit or to renew or reinstate a reseller permit must apply to the department in a form and manner prescribed by the department.
(b) As part of the application, the contractor must report the total combined dollar amount of all purchases of materials and labor during the preceding 24 months for retail construction activity, wholesale construction activity, speculative building, public road construction, and government contracting. If the contractor was not engaged in business as a contractor during the preceding 24 months, the contractor may provide an estimate of the dollar amount of purchases of materials and labor for retail construction activity, wholesale construction activity, speculative building, public road construction, and government contracting during the 12-month or 24-month period for which the reseller permit will be valid. The contractor must also report the percentage of its total dollar amount of actual or, if applicable, estimated material and labor purchases that was for retail and wholesale construction activity performed by the applicant.
(c) The department must use its best efforts to rule on applications within 60 days of receiving a complete application. If the department fails to rule on an application within 60 days of receiving a complete application, the taxpayer may either request a review as provided in subsection (6) of this section or resubmit the application. Nothing in this subsection may be construed as preventing the department from ruling on an application more than 60 days after the department received the application.
(d)(i) An application must be denied if:
(A) The department determines that the applicant is not entitled to make purchases at wholesale or is otherwise prohibited from using a reseller permit;
(B) The application contains any material misstatement;
(C) The application is incomplete; or
(D) Less than 25 percent of the taxpayer's total dollar amount of actual or, if applicable, estimated material and labor purchases as reported on the application is for retail and wholesale construction activity performed by the applicant. However, the department may approve an application not meeting the criteria in this subsection (1)(d)(i)(D) if the department is satisfied that approval is unlikely to jeopardize collection of the taxes due under this title.
(ii) The department may also deny an application if the department determines that denial would be in the best interest of collecting taxes due under this title.
(iii) The department's decision to approve or deny an application may be based on tax returns previously filed with the department by the applicant, a current or previous examination of the applicant's books and records by the department, information provided by the applicant in the master application and the reseller permit application, and other information available to the department.
(e) The department must refuse to accept an application to renew a reseller permit that is received more than 90 days before the expiration of the reseller permit.
(2) Notwithstanding subsection (1) of this section, the department may issue or renew a reseller permit for a contractor that has not applied for the permit or renewal of the permit if the department is satisfied that the contractor is entitled to make purchases at wholesale and that issuing or renewing the reseller permit is unlikely to jeopardize collection of sales taxes due under this title based on criteria established by the department by rule. Such criteria may include but is not limited to whether the taxpayer has a previous history of misusing resale certificates or reseller permits or there is any other indication that issuing or renewing the reseller permit would jeopardize collection of sales taxes due from the contractor.
(3)(a) Except as otherwise provided in (b) of this subsection, beginning July 1, 2013, reseller permits issued, renewed, or reinstated under this section will be valid for a period of 24 months from the date of issuance, renewal, or reinstatement.
(b)(i) A reseller permit is no longer valid if the permit holder's certificate of registration is revoked, the permit holder's tax reporting account is closed by the department, or the permit holder otherwise ceases to engage in business.
(ii) The department may provide by rule for a uniform expiration date for reseller permits issued, renewed, or reinstated under this section, if the department determines that a uniform expiration date for reseller permits will improve administrative efficiency for the department. If the department adopts a uniform expiration date by rule, the department may extend or shorten the 24-month period provided in (a) of this subsection for a period not to exceed six months as necessary to conform the reseller permit to the uniform expiration date.
(4)(a) The department may revoke a contractor's reseller permit for any of the following reasons:
(i) The contractor used or allowed or caused its reseller permit to be used to purchase any item or service without payment of sales tax, but the contractor or other purchaser was not entitled to use the reseller permit for the purchase;
(ii) The department issued the reseller permit to the contractor in error;
(iii) The department determines that the contractor is no longer entitled to make purchases at wholesale; or
(iv) The department determines that revocation of the reseller permit would be in the best interest of collecting taxes due under this title.
(b) The notice of revocation must be in writing and is effective on the date specified in the revocation notice. The notice must also advise the contractor of its right to a review by the department.
(c) The department may refuse to reinstate a reseller permit revoked under (a)(i) of this subsection until all taxes, penalties, and interest due on any improperly purchased item or service have been paid in full. In the event a contractor whose reseller permit has been revoked under this subsection reorganizes, the new business resulting from the reorganization is not entitled to a reseller permit until all taxes, penalties, and interest due on any improperly purchased item or service have been paid in full.
(d) For purposes of this subsection, "reorganize" or "reorganization" means: (i) The transfer, however effected, of a majority of the assets of one business to another business where any of the persons having an interest in the ownership or management in the former business maintain an ownership or management interest in the new business, either directly or indirectly; (ii) a mere change in identity or form of ownership, however effected; or (iii) the new business is a mere continuation of the former business based on significant shared features such as owners, personnel, assets, or general business activity.
(5) The department may provide the public with access to reseller permit numbers on its website, including the name of the permit holder, the status of the reseller permit, the expiration date of the permit, and any other information that is disclosable under RCW 82.32.330
(3)(k).
(6) The department must provide by rule for the review of the department's decision to deny, revoke, or refuse to reinstate a reseller permit or the department's failure to rule on an application within the time prescribed in subsection (1)(a) of this section. Such review must be consistent with the requirements of chapter
34.05
RCW.
(7) As part of its continuing efforts to educate taxpayers on their sales and use tax responsibilities, the department will educate taxpayers on the appropriate use of a reseller permit or other documentation authorized under RCW 82.04.470
and the consequences of misusing such permits or other documentation.
(8) As used in this section, the following definitions apply:
(a) "Contractor" means a person whose primary business activity is as a contractor which includes one or more contractor-related activities as defined in RCW 18.27.010, 18.106.010, or
19.28.006
.
(b) "Government contracting" means the activity described in RCW 82.04.190
(6).
(c) "Public road construction" means the activity described in RCW 82.04.190
(3).
(d) "Retail construction activity" means any activity defined as a retail sale in RCW 82.04.050
(2) (b) or (c).
(e) "Speculative building" means the activities of a speculative builder as the term "speculative builder" is defined by rule of the department.
(f) "Wholesale construction activity" means labor and services rendered for persons who are not consumers in respect to real property, if such labor and services are expressly defined as a retail sale by RCW 82.04.050
when rendered to or for consumers. For purposes of this subsection (8)(f), "consumer" has the same meaning as in RCW 82.04.190
.
[
2024 c 252 s 3
;
2010 c 112 s 3
;
2009 c 563 s 202
.]
NOTES:
Effective date
—
2010 c 112 ss 2, 3, 11, 12, and 15:
See note following RCW 82.32.780
.
Retroactive application
—
2010 c 112:
See note following RCW 82.32.780
.
Finding
—
Intent
—
Construction
—
Effective date
—
Reports and recommendations
—
2009 c 563:
See notes following RCW 82.32.780
.
RCW 82.32.784
Reseller's permit
—
Information required.
(1) Reseller permits issued by the department, as provided under RCW 82.32.780
and
82.32.783, will be in a form prescribed by the department, which may include an electronic form. Reseller permits must contain the following information:
(a) A unique identifying number assigned by the department;
(b) The name and address of the permit holder;
(c) The type of business engaged in;
(d) The date the permit was issued, renewed, or reinstated by the department; and
(e) The expiration date of the permit.
(2) Reseller permits may also contain such other information as required by the department, including, but not limited to:
(a) The categories of items or services to be purchased for resale or that are otherwise to be purchased at wholesale;
(b) The date that the permit was provided to the seller;
(c) A statement that the items or services purchased either: (i) Are purchased for resale in the regular course of business; or (ii) are otherwise purchased at wholesale;
(d) A statement that the permit holder acknowledges that misuse of [a] reseller permit or reseller permit number subjects the permit holder to revocation of the reseller permit, penalties as provided in RCW 82.32.290
and
82.32.291, in addition to the tax, interest, and any other penalties imposed by law;
(e) Instructions for renewing the permit;
(f) A statement that the department is authorized to obtain information concerning the permit holder's purchase of items or services under the permit from the seller to verify whether the permit holder was authorized to purchase such items or services without payment of retail sales tax; and
(g) The signature of the permit holder, unless a copy of the permit is provided to the seller in a format other than paper.
[
2010 c 112 s 4
.]
NOTES:
Retroactive application
—
2010 c 112:
See note following RCW 82.32.780
.
RCW 82.32.785
Reseller's permit
—
Voluntary electronic verification.
The department of revenue must, by January 1, 2011, develop a system, as resources permit, allowing sellers to voluntarily verify through electronic means whether their customers' reseller permits are valid.
[
2010 c 112 s 5
;
2009 c 563 s 203
.]
NOTES:
Retroactive application
—
2010 c 112:
See note following RCW 82.32.780
.
Finding
—
Intent
—
Construction
—
Effective date
—
Reports and recommendations
—
2009 c 563:
See notes following RCW 82.32.780
.
RCW 82.32.787
Reseller's permit
—
Request for copies.
A person must, upon request of the department, provide the department with paper or electronic copies of all reseller permits, or other documentation as authorized in RCW 82.04.470, accepted by that person during the period specified by the department to substantiate wholesale sales. If, instead of the documentation specified in this subsection, the seller has retained the relevant data elements from such permits or other documentation authorized in RCW 82.04.470, as allowed under the streamlined sales and use tax agreement, the seller must provide such data elements to the department.
[
2010 c 112 s 6
;
2009 c 563 s 204
.]
NOTES:
Retroactive application
—
2010 c 112:
See note following RCW 82.32.780
.
Finding
—
Intent
—
Construction
—
Effective date
—
Reports and recommendations
—
2009 c 563:
See notes following RCW 82.32.780
.
RCW 82.32.790
Tax incentives contingent upon semiconductor microchip fabrication facility siting and operation.
(Contingent expiration date.)
(1)(a) RCW 82.04.426, 82.04.448, 82.08.965, 82.08.970, 82.12.965, 82.12.970, 84.36.645, and
82.04.241
are contingent upon the siting and commercial operation of a significant semiconductor microchip fabrication facility in the state of Washington by January 1, 2034.
(b) For the purposes of this section:
(i) "Commercial operation" means the same as "commencement of commercial production" as used in RCW 82.08.965
.
(ii) "Semiconductor microchip fabrication" means "manufacturing semiconductor microchips" as defined in RCW 82.04.426
.
(iii) "Significant" means the combined investment of new buildings and new machinery and equipment in the buildings, at the commencement of commercial production, will be at least $500,000,000.
(2) The sections referenced in subsection (1) of this section take effect the first day of the month in which a contract for the construction of a significant semiconductor fabrication facility is signed, if the contract is signed and received by January 1, 2034, as determined by the director of the department of revenue.
(3)(a) The department of revenue must provide notice of the effective date of the sections referenced in subsection (1) of this section to affected taxpayers, the legislature, the office of the code reviser, and others as deemed appropriate by the department.
(b) If, after making a determination that a contract has been signed and the sections referenced in subsection (1) of this section are effective, the department discovers that commencement of commercial production did not take place within three years of the date the contract was signed, the department must make a determination that are no longer effective, and all taxes that would have been otherwise due are deemed deferred taxes and are immediately assessed and payable from any person reporting tax under RCW 82.04.241
or claiming an exemption or credit under RCW 82.04.426, 82.04.448, 82.08.965, 82.12.965, 82.08.970, 82.12.970, or
84.36.645
. The department is not authorized to make a second determination regarding the effective date of the sections referenced in subsection (1) of this section.
(4)(a) This section expires January 1, 2034, if the contingency in subsection (2) of this section does not occur by January 1, 2034, as determined by the department.
(b) The department must provide written notice of the expiration date of this section and the sections referenced in subsection (1) of this section to affected taxpayers, the legislature, the office of the code reviser, and others as deemed appropriate by the department.
[
2024 c 261 s 1
. Prior:
2022 c 56 s 11
;
2019 c 449 s 2
;
2017 3rd sp.s. c 37 s 526
; (2017 3rd sp.s. c 37 s 525 expired January 1, 2018); prior:
2017 c 323 s 509
;
2017 c 135 s 47
; prior:
2010 c 114 s 201
;
2010 c 106 s 401
;
2009 c 461 s 9
;
2006 c 300 s 12
;
2003 c 149 s 12
.]
NOTES:
Effective date
—
2024 c 261:
See note following RCW 82.04.241
.
Effective date
—
2017 3rd sp.s. c 37 ss 101-104, 403, 503, 506, 508, 510, 512, 514, 516, 518, 520, 522, 524, 526, 703, 705, 707, and 801-803:
See note following RCW 82.04.2404
.
Expiration date
—
2017 3rd sp.s. c 37 ss 502, 505, 507, 509, 511, 513, 515, 517, 519, 521, 523, and 525:
See note following RCW 82.04.2404
.
Tax preference performance statement exemption
—
Automatic expiration date exemption
—
2017 c 323:
See note following RCW 82.04.040
.
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Finding
—
Intent
—
2010 c 114:
See note following RCW 82.32.534
.
RCW 82.32.805
Tax preferences
—
Expiration dates.
(1)(a) Except as otherwise provided in this section, every new tax preference expires on the first day of the calendar year that is subsequent to the calendar year that is ten years from the effective date of the tax preference. With respect to any new property tax exemption, the exemption does not apply to taxes levied for collection beginning in the calendar year that is subsequent to the calendar year that is ten years from the effective date of the tax preference.
(b) If a new tax preference applies to both a state tax and a corresponding local tax that the department administers, such as a state and local sales and use tax exemption, the expiration of that new tax preference under this subsection applies to both the state and local tax.
(c) A future amendment that expands a tax preference does not extend the tax preference beyond the period provided in this subsection unless an extension is expressly and unambiguously stated in the amendment.
(2) Subsection (1) of this section does not apply if legislation creating a new tax preference includes an expiration date for the new tax preference or an exemption from this section in its entirety or from the provisions of subsection (1) of this section, whether or not such exemption is codified.
(3) Subsection (1) of this section does not apply to any existing tax preference that is amended to clarify an ambiguity or correct a technical inconsistency. Future enacted legislation intended to make such clarifications or corrections must explicitly indicate this intent.
(4) For the purposes of this section, the following definitions apply:
(a) "New tax preference" means a tax preference that initially takes effect after August 1, 2013, or a tax preference in effect as of August 1, 2013, that is expanded or extended after August 1, 2013, even if the expanding or extending amendment includes any other change to the tax preference.
(b) "Tax preference" has the same meaning as in RCW 43.136.021
with respect to any state tax administered by the department, except does not include the Washington estate and transfer tax in chapter
83.100
RCW.
(5) The department must provide written notice to the office of the code reviser of a ten-year expiration date required under this section for a new tax preference.
[
2021 c 145 s 20
;
2020 c 139 s 57
;
2013 2nd sp.s. c 13 s 1701
.]
NOTES:
Effective date
—
2013 2nd sp.s. c 13:
See note following RCW 82.04.43393
.
RCW 82.32.808
Tax preferences
—
Performance statement requirement.
(1) As provided in this section, every bill enacting a new tax preference must include a tax preference performance statement, unless the legislation enacting the new tax preference contains an explicit exemption from the requirements of this section.
(2) A tax preference performance statement must state the legislative purpose for the new tax preference. The tax preference performance statement must indicate one or more of the following general categories, by reference to the applicable category specified in this subsection, as the legislative purpose of the new tax preference:
(a) Tax preferences intended to induce certain designated behavior by taxpayers;
(b) Tax preferences intended to improve industry competitiveness;
(c) Tax preferences intended to create or retain jobs;
(d) Tax preferences intended to reduce structural inefficiencies in the tax structure;
(e) Tax preferences intended to provide tax relief for certain businesses or individuals; or
(f) A general purpose not identified in (a) through (e) of this subsection.
(3) In addition to identifying the general legislative purpose of the tax preference under subsection (2) of this section, the tax preference performance statement must provide additional detailed information regarding the legislative purpose of the new tax preference.
(4) A new tax preference performance statement must specify clear, relevant, and ascertainable metrics and data requirements that allow the joint legislative audit and review committee and the legislature to measure the effectiveness of the new tax preference in achieving the purpose designated under subsection (2) of this section.
(5) If the tax preference performance statement for a new tax preference indicates a legislative purpose described in subsection (2)(b) or (c) of this section, any taxpayer claiming the new tax preference must file an annual tax performance report in accordance with RCW 82.32.534
.
(6)(a) Taxpayers claiming a new tax preference must report the amount of the tax preference claimed by the taxpayer to the department as otherwise required by statute or determined by the department as part of the taxpayer's regular tax reporting responsibilities. For new tax preferences allowing certain types of gross income of the business to be excluded from business and occupation or public utility taxation, the tax return must explicitly report the amount of the exclusion, regardless of whether it is structured as an exemption or deduction, if the taxpayer is otherwise required to report taxes to the department on a monthly or quarterly basis. For a new sales and use tax exemption, the total purchase price or value of the exempt product or service subject to the exemption claimed by the buyer must be reported on an addendum to the buyer's tax return if the buyer is otherwise required to report taxes to the department on a monthly or quarterly basis and the buyer is required to submit an exemption certificate, or similar document, to the seller.
(b) This subsection does not apply to:
(i) Property tax exemptions;
(ii) Tax preferences required by constitutional law;
(iii) Tax preferences for which the tax benefit to the taxpayer is less than one thousand dollars per calendar year; or
(iv) Taxpayers who are annual filers.
(c) The department may waive the filing requirements of this subsection for taxpayers who are not required to file electronically any return or report under this chapter.
(7)(a) Except as otherwise provided in this subsection, the amount claimed by a taxpayer for any new tax preference is subject to public disclosure and is not considered confidential tax information under RCW 82.32.330, if the reporting periods subject to disclosure ended at least twenty-four months prior to the date of disclosure and the taxpayer is required to report the amount of the tax preference claimed by the taxpayer to the department under subsection (6) of this section.
(b)(i) The department may waive the public disclosure requirement under (a) of this subsection (7) for good cause. Good cause may be demonstrated by a reasonable showing of economic harm to a taxpayer if the information specified under this subsection is disclosed. The waiver under this subsection (7)(b)(i) only applies to the new tax preferences provided in chapter 13, Laws of 2013 2nd sp. sess.
(ii) The amount of the tax preference claimed by a taxpayer during a calendar year is confidential under RCW 82.32.330
and may not be disclosed under this subsection if the amount for the calendar year is less than ten thousand dollars.
(c) In lieu of the disclosure and waiver requirements under this subsection, the requirements under RCW 82.32.534
apply to any tax preference that requires a tax performance report.
(8) If a new tax preference does not include the information required under subsections (2) through (4) of this section, the joint legislative audit and review committee is not required to perform a tax preference review under chapter
43.136
RCW, and it is legislatively presumed that it is the intent of the legislature to allow the new tax preference to expire upon its scheduled expiration date.
(9) For the purposes of this section, "tax preference" and "new tax preference" have the same meaning as provided in RCW 82.32.805
.
(10) The provisions of this section do not apply to the extent that legislation creating a new tax preference provides an exemption, in whole or in part, from this section, whether or not such exemption is codified.
[
2020 c 139 s 58
;
2017 c 135 s 8
;
2013 2nd sp.s. c 13 s 1702
.]
NOTES:
Effective date
—
2017 c 135:
See note following RCW 82.32.534
.
Effective date
—
2013 2nd sp.s. c 13:
See note following RCW 82.04.43393
.
RCW 82.32.850
Significant commercial airplane manufacturing
—
Tax preference
—
Contingent effective date.
(1) Chapter 2, Laws of 2013 3rd sp. sess. takes effect contingent upon the siting of a significant commercial airplane manufacturing program in the state of Washington. If a significant commercial airplane manufacturing program is not sited in the state of Washington by June 30, 2017, chapter 2, Laws of 2013 3rd sp. sess. does not take effect.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Commercial airplane" has the same meaning provided in RCW 82.32.550
.
(b) "New model, or any version or variant of an existing model, of a commercial airplane" means a commercial airplane manufactured with a carbon fiber composite fuselage or carbon fiber composite wings or both.
(c) "Significant commercial airplane manufacturing program" means an airplane program in which the following products, including final assembly, will commence manufacture at a new or existing location within Washington state on or after July 9, 2014:
(i) The new model, or any version or variant of an existing model, of a commercial airplane; and
(ii) Fuselages and wings of a new model, or any version or variant of an existing model, of a commercial airplane.
(d) "Siting" means a final decision, made on or after November 1, 2013, by a manufacturer to locate a significant commercial airplane manufacturing program in Washington state.
(3) The department must make a determination regarding whether the contingency in subsection (1) of this section occurs and must provide written notice of the date on which such contingency occurs and chapter 2, Laws of 2013 3rd sp. sess. takes effect. If the department determines that the contingency in subsection (1) of this section has not occurred by June 30, 2017, the department must provide written notice stating that chapter 2, Laws of 2013 3rd sp. sess. does not take effect. Written notice under this subsection (3) must be provided to affected parties, the chief clerk of the house of representatives, the secretary of the senate, the office of the code reviser, and others as deemed appropriate by the department.
[
2013 3rd sp.s. c 2 s 2
.]
NOTES:
Reviser's note:
The department of revenue determined that the contingency in section 2, chapter 2 (Engrossed Substitute Senate Bill No. 5952), Laws of 2013 3rd sp.s. occurred and that the bill took effect July 9, 2014.
Findings
—
Intent
—
2013 3rd sp.s. c 2:
"(1) The legislature finds that the people of Washington have benefited enormously from the presence of the aerospace industry in Washington state. The legislature further finds that the industry continues to provide good wages and benefits for the thousands of engineers, mechanics, and support staff working directly in the industry throughout the state. The legislature further finds that suppliers and vendors that support the aerospace industry in turn provide a range of well-paying jobs. In 2003, and again in 2006, and 2007, the legislature determined it was in the public interest to encourage the continued presence of the aerospace industry through the provision of tax incentives. To this end, and in recognition of the continuing extreme importance of the aerospace industry in Washington, it is the legislature's intent to reaffirm and build upon prior aerospace tax incentive legislation in a fiscally prudent manner.
(2) The legislature categorizes the tax preferences extended in this act as intended to create or retain jobs, as indicated in RCW 82.32.808
(2)(c).
(3) It is the legislature's specific public policy objective to maintain and grow Washington's aerospace industry workforce. To help achieve this public policy objective, it is the legislature's intent to conditionally extend aerospace industry tax preferences until July 1, 2040, in recognition of intent by the state's aerospace industry sector to maintain and grow its workforce within the state.
(4) The joint legislative audit and review committee must review the tax preferences provided in this act and report to the legislature by December 1, 2019, and every five years thereafter. As part of its tax preference reviews, the committee must specifically assess changes in aerospace industry employment in Washington in comparison with other states and internationally. To the extent practicable, the committee must use occupational data statistics provided by the bureau of labor statistics and state agencies responsible for administering unemployment insurance to perform this assessment." [
2013 3rd sp.s. c 2 s 1
.]
RCW 82.32.860
Liquefied natural gas
—
Estimated sales tax revenue.
(Expires July 1, 2028.)
(1) By the last workday of the second and fourth calendar quarters, the state treasurer must transfer the amount specified in subsection (2) of this section from the general fund to the motor vehicle fund established under RCW 46.68.070
. The first transfer under this subsection must occur by December 31, 2017.
(2) By December 15th and by June 15th of each year, the department must estimate the increase in state general fund revenues from the taxes collected under RCW 82.08.0261
(2)(a) on the nonexempt portion of liquefied natural gas sales in the current and prior calendar quarters and notify the state treasurer of the increase.
(3) This section expires July 1, 2028.
[
2014 c 216 s 406
.]
NOTES:
Effective date
—
Findings
—
Tax preference performance statement
—
2014 c 216:
See notes following RCW 82.38.030
.
RCW 82.32.865
Nonresident vessel permit.
(Effective until January 1, 2029.)
(1) A nonresident vessel owner that is not a natural person, or a nonresident vessel owner who intends to charter the vessel with a captain or crew as provided in RCW 88.02.620
(1)(b)(ii), must apply directly to the department for written approval to obtain a nonresident vessel permit under RCW 88.02.620
. The application must be made to the department in a form and manner prescribed by the department and must include:
(a) The name of the record owner of the vessel;
(b) The name, address, and telephone number of the individual that applied for the permit;
(c) The record owner's address and telephone number;
(d) The vessel's hull identification number;
(e) The vessel year, make, and model;
(f) The vessel length;
(g) The vessel's registration or numbering under the state of principal operation or the valid number under federal law;
(h) Proof of the person's current nonresident status, including, as applicable, certified copies of the filed articles of incorporation, a certificate of formation, or similar filings;
(i) Proof of the identity and current residency of the natural person owning the charter vessel or all principals of the nonresident person owning the vessel. Such proof may include a valid driver's license verifying out-of-state residency or a valid identification card that has a photograph of the holder and is issued by an out-of-state jurisdiction;
(j) An affidavit signed by the owner of the nonresident charter vessel, or by a principal of the entity owning the nonresident vessel, certifying that the owner is not a Washington resident or that no Washington residents are principals of the nonresident vessel owner, as the case may be; and
(k) Any other information the department may require.
(2) The department must determine the nonresident vessel owner's eligibility for the permit, as provided in RCW 88.02.620
. The department may require additional proof of eligibility directly from the nonresident vessel owner.
(3)(a) If the department determines that the nonresident vessel owner has established by clear, cogent, and convincing evidence that it is eligible for the permit, the department must provide written approval to the nonresident vessel owner that authorizes issuance of the permit and includes the name of the nonresident vessel owner, the name of the vessel, and the hull identification number. Otherwise, the department must refuse to authorize the issuance of the permit.
(b) The department must also provide the information in the written approval to the department of licensing.
(4)(a) If, after a permit has been issued under RCW 88.02.620, the department has reason to believe that the nonresident vessel owner was not eligible for the permit approved under subsection (3) of this section, the department may request such information from the nonresident vessel owner as the department determines is necessary to conduct a review of the nonresident vessel owner's eligibility.
(b) If the department finds the nonresident person was not eligible for the permit, the department must assess against the nonresident person state and local use tax on the value of the vessel according to the "value of the article used" as defined in RCW 82.12.010
. The department must also assess against the nonresident person any watercraft excise tax due under chapter
82.49
RCW. Penalties and interest as provided in this chapter and chapter
82.49
RCW apply to taxes assessed under this subsection (4).
(5) For purposes of this section, "principal" means a natural person that owns, directly or indirectly, including through any tiered ownership structure, more than a one percent interest in the nonresident person applying for a nonresident vessel permit.
(6) By January 1, 2026, the department must submit a report to the governor and the transportation and fiscal committees of the legislature. The report must include:
(a) The number of nonresident vessel permits the department authorized for approval in each calendar year since September 1, 2015, and the length of such vessels;
(b) The number of nonresident vessel permits the department authorized for approval in each calendar year since July 25, 2021, for vessels chartered with a captain or crew;
(c) Information about the state or country where the vessels described in (a) and (b) of this subsection are primarily operated;
(d) The amount of use tax collected on vessels described in (b) of this subsection;
(e) A discussion of any evidence of fraud or attempted fraud related to nonresident vessel permits or permit applications; and
(f) Any other information the department determines may be relevant.
(7) The department may adopt rules to implement this section.
[
2021 c 150 s 3
;
2015 3rd sp.s. c 6 s 805
.]
NOTES:
Expiration date
—
2021 c 150:
See note following RCW 88.02.620
.
Expiration date
—
2021 c 150; 2017 c 323; 2015 3rd sp.s. c 6 ss 802-805:
See note following RCW 88.02.620
.
Findings
—
Intent
—
Tax preference performance statement
—
2021 c 150; 2017 c 323; 2015 3rd sp.s. c 6 ss 802-805:
See note following RCW 88.02.640
.
Effective date
—
2015 3rd sp.s. c 6:
See note following RCW 82.04.4266
.
PDF
RCW 82.32.865
Nonresident vessel permit.
(Effective January 1, 2029, until January 1, 2031.)
(1) A nonresident vessel owner that is not a natural person must apply directly to the department for written approval to obtain a nonresident vessel permit under RCW 88.02.620
. The application must be made to the department in a form and manner prescribed by the department and must include:
(a) The name of the record owner of the vessel;
(b) The name, address, and telephone number of the individual that applied for the permit on behalf of the nonresident person;
(c) The record owner's address and telephone number;
(d) The vessel's hull identification number;
(e) The vessel year, make, and model;
(f) The vessel length;
(g) The vessel's registration or numbering under the state of principal operation or the valid number under federal law;
(h) Proof of the person's current nonresident status, including certified copies of the filed articles of incorporation, a certificate of formation, or similar filings;
(i) Proof of the identity and current residency of all principals of the nonresident person. Such proof may include a valid driver's license verifying out-of-state residency or a valid identification card that has a photograph of the holder and is issued by an out-of-state jurisdiction;
(j) An affidavit signed by a principal of the nonresident vessel owner certifying that no Washington residents are principals of the nonresident vessel owner; and
(k) Any other information the department may require.
(2) The department must determine the nonresident vessel owner's eligibility for the permit, as provided in RCW 88.02.620, and may request additional information as needed directly from the nonresident vessel owner.
(3)(a) If the nonresident vessel owner appears eligible for the permit, the department must provide written approval to the nonresident vessel owner that authorizes issuance of the permit and includes the name of the nonresident vessel owner, the name of the vessel, and the hull identification number. After November 30, 2025, the department may not provide written approval for any permits under this subsection.
(b) The department must also provide the information in the written approval to the department of licensing.
(4)(a) If, after a permit has been issued under RCW 88.02.620, the department has reason to believe that the nonresident vessel owner was not eligible for the permit approved under subsection (3) of this section, the department may request such information from the nonresident vessel owner as the department determines is necessary to conduct a review of the nonresident vessel owner's eligibility.
(b) If the department finds the nonresident person was not eligible for the permit, the department must assess against the nonresident person state and local use tax on the value of the vessel according to the "value of the article used" as defined in RCW 82.12.010
. The department must also assess against the nonresident person any watercraft excise tax due under chapter
82.49
RCW. Penalties and interest as provided in this chapter and chapter
82.49
RCW apply to taxes assessed under this subsection (4).
(5) For purposes of this section, "principal" means a natural person that owns, directly or indirectly, including through any tiered ownership structure, more than a one percent interest in the nonresident person applying for a nonresident vessel permit.
(6) The department may adopt rules to implement this section.
[
2015 3rd sp.s. c 6 s 805
.]
NOTES:
Expiration date
—
2017 c 323; 2015 3rd sp.s. c 6 ss 802-805:
See note following RCW 88.02.620
.
Findings
—
Intent
—
Tax preference performance statement
—
2017 c 323; 2015 3rd sp.s. c 6 ss 802-805:
See note following RCW 88.02.640
.
Effective date
—
2015 3rd sp.s. c 6:
See note following RCW 82.04.4266
.
RCW 82.32.870
Vapor products tax deposits.
(1) By October 15, 2020, and by each October 15th thereafter, the department must estimate any increase in state general fund revenue collections for the immediately preceding fiscal year resulting from the taxes imposed in chapter 445, Laws of 2019. The department must promptly notify the state treasurer of these estimated amounts.
(2) Beginning November 1, 2020, and by each November 1st thereafter, the state treasurer must transfer from the general fund the estimated amount determined by the department under subsection (1) of this section for the immediately preceding fiscal year as follows:
(a) Fifty percent into the Andy Hill cancer research endowment fund match transfer account created in RCW 43.348.080
; and
(b) Fifty percent into the foundational public health services account created in RCW 82.25.015
.
(3) The department may not make any adjustments to an estimate under subsection (1) of this section after the state treasurer makes the corresponding distribution under subsection (2) of this section based on the department's estimate.
[
2019 c 445 s 401
.]
NOTES:
Conflict with federal requirements
—
Effective date
—
2019 c 445:
See RCW 82.25.900
and
82.25.901
.
Automatic expiration date and tax preference performance statement exemption
—
2019 c 445:
See note following RCW 82.08.0318
.
RCW 82.32.875
Department of revenue
—
Recommendations to simplify tax compliance.
(Effective January 1, 2026.)
The department must engage its business advisory council as well as a group of stakeholder taxpayers to recommend statutory and administrative changes to simplify tax compliance for taxpayers. The recommendations should include ways to simplify online filing, the development of guidance materials to ease taxpayer compliance in reporting business activities accurately, and enhance the accessibility of information.
[
2025 c 420 s 114
.]
NOTES:
Effective date
—
2025 c 420 ss 114, 201, 301, 401, and 402:
"Sections 114, 201, 301, 401, and 402 of this act take effect January 1, 2026." [
2025 c 420 s 507
.]
Tax preference performance statement exemption
—
Automatic expiration date exemption
—
Necessity of act
—
2025 c 420:
See notes following RCW 82.04.230
.
RCW 82.32.900
Work group created
—
Transition plan
—
Taxing liquefied natural gas used for marine vessel transportation.
(1) The department of licensing must convene a work group that includes, at a minimum, representatives from the department of transportation, the trucking industry, manufacturers of compressed natural gas and liquefied natural gas, and any other stakeholders as deemed necessary, for the following purposes:
(a) To evaluate the annual license fee in lieu of fuel tax under RCW 82.38.075
to determine a fee that more closely represents the average consumption of vehicles by weight and to make recommendations to the transportation committees of the legislature by December 1, 2014, on an updated fee schedule.
(b) To develop a transition plan to move vehicles powered by liquefied natural gas and compressed natural gas from the annual license fee in lieu of fuel tax to the fuel tax under RCW 82.38.030
. The transition plan must incorporate stakeholder feedback and must include draft legislation and cost and revenue estimates. The transition plan must be submitted to the transportation committees of the legislature by December 1, 2015.
(2) The department of revenue must convene a work group that includes, at a minimum, representatives from the department of transportation, the marine shipping industry, manufacturers of liquefied natural gas, and any other stakeholders as deemed necessary, for the purpose of examining the appropriate level and manner of taxing liquefied natural gas used for marine vessel transportation. The department must make recommendations to the fiscal committees of the legislature by December 1, 2025.
[
2014 c 216 s 209
.]
NOTES:
Effective date
—
Findings
—
Tax preference performance statement
—
2014 c 216:
See notes following RCW 82.38.030
.