Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-193D - Transportation, communication, public utility activities, or other services in interstate or foreign commerce

Current through Register Vol. 24-14, July 15, 2024
WAC
				458-20-193 deals with interstate
				and foreign commerce and is published in four separate parts:
Part A.
Sales of goods originating in Washington to persons
							 in other states.
Part B.
Sales of goods originating in other states to persons
							 in Washington.
Part C.
Imports and Exports: Sales of goods from or to
							 persons in foreign countries.
Part D.
Transportation, communication, public utility
							 activities, or other services in interstate or foreign commerce.
Part D.
Business and Occupation Tax, Public Utility
				Tax
In computing tax there may be deducted from gross income the
				amount thereof derived as compensation for performance of services which in
				themselves constitute interstate or foreign commerce to the extent that a tax
				measured thereby constitutes an impermissible burden upon such commerce. A tax
				does not constitute an impermissible burden upon interstate or foreign commerce
				unless the tax discriminates against that commerce by placing a burden thereon
				that is not borne by intrastate commerce, or unless the tax subjects the
				activity to the risk of repeated exactions of the same nature from other
				states. Transporting across the state's boundaries is exempt, whereas supplying
				such transporters with facilities, arranging accommodations, providing funds
				and the like, by which they engage in such commerce is taxable.
Examples of Exempt Income:
(1) Income from those activities which
			 consist of the actual transportation of persons or property across the state's
			 boundaries is exempt.
(2) That
			 portion of commissions received by local brokers or commission merchants for
			 interstate or foreign sales which was paid to out-of-state independent agents
			 is exempt.
(3) Income from services
			 rendered by an out-of-state branch or office of the taxpayer regularly
			 maintained outside the state is exempt. (See WAC
			 458-20-194.)
Examples of Taxable Income:
(1) Compensation received by persons engaged
			 in business within this state for performance of business activities which are
			 only ancillary to transportation across the state's boundaries is
			 taxable.
(2) Compensation received
			 by merchandise brokers or commission merchants for services rendered within
			 this state to principals engaged in interstate or foreign commerce is
			 taxable.
(3) Compensation received
			 by contracting, stevedoring or loading companies for services performed within
			 this state is taxable.
Persons engaged in stevedoring and associated activities
				involving the movement of goods and commodities in waterborne interstate or
				foreign commerce are subject to business tax at the rate .0033 upon the gross
				proceeds from such activities. Stevedoring and associated activities means all
				activities of a labor, service, or transportation nature whereby cargo is
				loaded or unloaded to or from vessels or barges, passing over, onto, or under a
				wharf, pier, or similar structure, including also the moving of cargo to a
				warehouse or similar holding or storage yard or area to await further movement
				in import or export; also the movement to a consolidation freight station to be
				stuffed, unstuffed, containerized, separated or otherwise segregated or
				aggregated for delivery or loading on any mode of transportation for delivery
				to its consignee. Specific activities included in this definition are:
				Wharfage, handling, loading, unloading, moving of cargo to a convenient place
				of delivery to the consignee or a convenient place for further movement to
				export mode; documentation services in connection with the receipt, delivery,
				checking, care, custody and control of cargo required in the transfer of cargo;
				imported automobile handling prior to delivery to consignee; terminal
				stevedoring and incidental vessel services, including but not limited to
				plugging and unplugging refrigerator service to containers, trailers, and other
				refrigerated cargo receptacles, and securing ship hatch covers.
Persons engaging in business as an international steamship
				agent, international customs house broker, international freight forwarder,
				vessel and/or cargo charter broker in foreign commerce, or international air
				cargo agent are subject to business tax at the rate .0033 upon gross income
				with respect to such international activities.
In computing public utility tax, there may be deducted from
				gross income so much thereof as is derived from actually transporting persons
				or property or transmitting communications or electrical energy, from this
				state to another state or territory or to a foreign country and vice
				versa.
Persons, including dock companies or wharfage companies, are
				permitted no deduction from gross income of amounts received for services
				performed in this state consisting of the handling of cargo or freight even
				though such cargo or freight has moved or will move across the state's
				boundaries.
No deduction is permitted with respect to gross income derived
				from activities which are ancillary to transportation across the state's
				boundaries, such as income received by a wharf company or warehouse company for
				the storage of goods. The mere ownership or operation of facilities by means of
				which others engage in foreign or interstate commerce is an activity ancillary
				to such commerce and any income received therefrom is taxable.
Insofar as the transportation of goods is concerned, the
				interstate movement of cargo or freight ceases when the goods have arrived at
				the destination to which it was billed by the out-of-state shipper, and no
				deduction is permitted of the gross income derived from transporting the same
				from such point of destination in this state to another point within this
				state. Thus, freight is billed from San Francisco, or a foreign point, to
				Seattle. After arrival in Seattle it is transported to Spokane. No deduction is
				permitted of the gross income received for the transportation from Seattle to
				Spokane. Again, freight is billed from San Francisco, or a foreign point, to a
				line carrier's terminal, or a public warehouse in Seattle. After arrival in
				Seattle it is transported from the line carrier's terminal or public warehouse
				to the buyer's place of business in Seattle. No deduction is permitted of the
				gross income received as transportation charges from the line carrier's
				terminal or public warehouse to the buyer's place of business in
				Seattle.
The interstate movement of cargo or freight begins when the
				goods are committed to a carrier for transportation out of the state, which
				carrier will start the transportation to a point outside the
				state.