Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-141 - Duplicating activities and mailing bureaus

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
This rule
			 discusses the business and occupation (B&O) tax and retail sales and use
			 tax reporting responsibilities of persons who engage in duplicating activities
			 or who provide mailing bureau services in Washington. Persons engaged in
			 printing activities should refer to WAC
			 458-20-144 (Printing
			 industry).
(2)
Duplicating
			 activities.
Duplicating is the copying of typed, written, drawn,
			 photographed, previously duplicated, or printed materials using a photographic
			 process such as photocopying, color copying, or blueprinting.
(a)
Sales of duplicated
			 products.
Income from the sale of photostats, photocopies, blueprint
			 copies and other duplicated tangible personal property to consumers is subject
			 to the retailing B&O tax. The measure of tax is the gross proceeds of sale.
			 The seller is also responsible for collecting and remitting retail sales tax on
			 the selling price when making sales to consumers, unless a specific exemption
			 applies. The wholesaling B&O tax applies to the gross proceeds of sale when
			 the buyer purchases the duplicated property for resale without intervening use.
			 The seller must obtain a resale certificate from the buyer to document the
			 wholesale nature of any sale as provided in WAC
			 458-20-102 (Resale certificates).
If the seller is also the manufacturer of the duplicated
				products, the seller may be eligible for a multiple activities tax credit.
				Refer to WAC
				458-20-19301 (Multiple activities
				tax credits) for more information about the credit.
(b)
Duplicating as a manufacturing
			 activity.
A person duplicating tangible personal property for sale or
			 commercial or industrial use (the use of manufactured property as a consumer)
			 is subject to the manufacturing B&O tax classification. For further
			 information about manufacturing activities, refer to WAC
			 458-20-112 (Value of products),
			 WAC 458-20-134 (Commercial or
			 industrial use), and WAC
			 458-20-136 (Manufacturing,
			 processing for hire, fabricating).
(c)
Self-service copying.
Some
			 persons provide consumers with access to duplicating equipment to make their
			 own copies (frequently referred to "self-service copying"). These customers are
			 generally charged on a per page basis. The gross proceeds of sales made to
			 consumers for self-service copying is subject to the retailing B&O tax. The
			 seller is also responsible for collecting retail sales tax, unless a specific
			 exemption applies. In such cases, the person providing access to duplicating
			 equipment is not engaged in a manufacturing activity and charges for
			 self-service copying are not subject to the manufacturing B&O
			 tax.
(d)
Potential litter tax
			 liability.
Chapter 82.19 RCW imposes a litter tax on manufacturers
			 (including duplicators), wholesalers, and retailers of certain products. These
			 products include, but are not limited to, newspapers, magazines, and household
			 paper and paper products. Thus, persons who duplicate tangible personal
			 property for sale or who provide facilities for self-service copying may incur
			 a litter tax liability. The measure of the litter tax is the gross proceeds of
			 sale. For further information about the litter tax, refer to chapter 82.19 RCW
			 and WAC 458-20-243 (Litter
			 tax).
(e)
Purchases for
			 resale
. The purchase of tangible personal property for resale as
			 tangible personal property or as a component or ingredient of duplicated
			 property is a purchase at wholesale. Examples of items that may be purchased at
			 wholesale include paper, ink, toner, and staples. Refer to WAC
			 458-20-113 (Ingredients or
			 components, chemicals used in processing new articles for sale). Wholesale
			 purchases are not subject to retail sales tax when the buyer provides a resale
			 certificate to the seller as provided by WAC
			 458-20-102 (Resale
			 certificates).
(f)
Purchases
			 subject to retail sales or use tax.
A person who engages in duplicating
			 activities and acquires tangible personal property for use as a consumer must
			 pay retail sale tax (commonly referred to as "deferred sales tax") or use tax
			 directly to the department when the seller fails to collect retail sales tax.
			 Examples of purchases by a person engaged in duplicating activities that are
			 subject to retail sales tax or use tax include photocopiers, cutting boards,
			 computers, cash registers, and office furniture. For further information about
			 the use tax, refer to WAC
			 458-20-178 (Use tax).
Persons who engage in duplicating products for sale should
				refer to WAC
				458-20-13601 (Manufacturers and
				processors for hire -- Sales and use tax exemption for machinery and equipment)
				for information about the sales and use tax exemptions for certain machinery
				and equipment used directly in a manufacturing operation.
(g)
Example.
Copy Company
			 provides a public area with photocopying equipment and materials (paper, toner,
			 and staples) to allow customers to make their own copies. Copy Company has a
			 separate area where Copy Company employees make copies for customers. The
			 income attributable to copies made both by the customers and by Copy Company
			 employees is subject to the retailing B&O and retail sales taxes. The value
			 of the copies made by Copy Company employees is also subject to the
			 manufacturing B&O tax, and Copy Company may claim a multiple activities tax
			 credit as described above in subsection (2)(a). Litter tax may be due as
			 explained above in subsection (2)(d).
Copy Company may purchase the paper, toner, and staples that
				are used or provided in both areas at wholesale, if the seller receives a
				resale certificate. Retail sales or use tax applies to the purchase of
				photocopying equipment in both areas. The purchase and/or use of the equipment
				where Copy Company employees make copies may qualify for the machinery and
				equipment exemption described in WAC
				458-20-13601.