Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-235 - Effect of rate changes on prior contracts and sales agreements

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
This section explains the principals that determine
			 the applicability of changes in the rates of tax imposed under the Revenue Act,
			 with respect to contracts, sales agreements, and installment sales made prior
			 to the effective date of the change.
(2)
Unconditional sales
			 contracts.
* When an unconditional sales contract to sell tangible
				personal property is entered into prior to the effective date of a rate change,
				and the property is delivered after the rate change date, the new tax rate
				applies to the transaction.
* When an unconditional sales contract to sell tangible
				personal property is entered into prior to the effective date, and the property
				is delivered prior to the rate change date, the tax rate in effect for the
				prior period applies.
* When a contract to sell tangible personal property contains a
				specific provision to pass title at some time prior to delivery of the
				property, such a specific provision is controlling and the tax rate in effect
				at that time applies.
(3)
Conditional and installment sales.
The taxes due on conditional
			 and installment sales must be wholly reported during the period in which the
			 sale is made (see WAC
			 458-20-198 Installment sales,
			 method of reporting), even when the seller receives payment in installments.
			 Sellers who receive installment payments after the effective date of a rate
			 change on conditional and installment sales made prior to that date do not need
			 to adjust the installment payment amounts to reflect the rate change.
(4)
Leasing or rental of tangible
			 personal property.
Lessors who lease tangible personal property are
			 required to collect from their lessees the retail sales tax measured by the
			 gross income from leases or rentals as of the time the lease or rental payments
			 are due (WAC
			 458-20-211 Leases or rentals of
			 tangible personal property, bailments). Lessors must collect and remit taxes to
			 the department of revenue (department) at the new rates on all lease or rental
			 payments due on and after the effective date of a rate change, including lease
			 or rental payments on contracts entered into prior to that date.
(5)
Repairing or improving tangible
			 personal or real property.
When persons install, repair, clean, alter,
			 imprint, or improve tangible person property for others, or improve buildings
			 or other structures upon real property of others:
* Sales and use tax rate increases apply to the first billing
				period starting on or after the effective date of the increase; and
* Sales and use tax rate decreases apply when bills are
				rendered on or after the effective date of the decrease. (RCW
				82.08.064)
The new tax rate applies to the full contract amount if the
				contract was executed prior to the effective date of the rate change, unless
				the contract work is completed and accepted prior to the effective date.
If under the terms of the contract, the seller is entitled to
				periodic payments, which amounts are calculated to compensate the seller for
				the work completed to the date of payment, the applicable tax rates upon such
				payments (including, in the case of public works contracts, the percentage
				retained by the public agency pursuant to the provisions of
				RCW
				60.28.010) will be those in effect at the
				time the seller is entitled to receive the payments.
(6)
Do you have questions on rate
			 changes?
If you have questions on how a rate change may affect you,
			 please contact the Telephone Information Center at 360-705-6705, or write the
			 department at:
Taxpayer Information and Education
Department of Revenue
P.O. Box 47478
Olympia, WA 98504-7478.
Statutory Authority:
				  RCW
				  82.32.300,
				  82.01.060(2), and
				  82.08.064. 10-07-135, §
				  458-20-235, filed 3/23/10, effective 4/23/10. Statutory Authority:
				  RCW
				  82.32.300. 83-07-032 (Order ET 83-15), §
				  458-20-235, filed 3/15/83; Order ET 70-3, § 458-20-235 (Rule 235), filed
				  5/29/70, effective 7/1/70.