Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-17803 - Use tax on promotional material

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
Persons who distribute or cause to be distributed
			 any article of tangible personal property, except newspapers, the primary
			 purpose of which is to promote the sale of products or services, are subject to
			 use tax on the value of the property.
			 RCW
			 82.12.010,
			 82.12.020, and chapter 367, Laws
			 of 2002. This section explains the use tax reporting responsibilities of
			 consumers when such property is delivered directly to persons other than the
			 consumer from outside Washington. For the purposes of this section, the term
			 "promotional material" is used in describing such property where applicable.
This rule provides numerous examples that identify a number of
				facts and then state a conclusion. These examples should only be used as a
				general guide. Similar determinations for other situations can be made only
				after a review of all facts and circumstances. For purposes of these examples,
				presume the promotional material is delivered to persons within
				Washington.
Chapter 514, Laws of 2005, changed the taxability of delivery
				charges associated with direct mail. Refer to subsection (5) of this section
				for further information.
(2)
What is the use tax?
The use
			 tax complements the retail sales tax by imposing a tax of a like amount when a
			 consumer uses tangible personal property or certain retail services within this
			 state. RCW 82.12.020. The tax does not
			 apply to the use of any property or service if the present user, donor, or
			 bailor previously paid retail sales tax under
			 chapter
			 82.08 RCW with respect to
			 the property used or the service obtained. See WAC
			 458-20-178 (Use tax) for an
			 explanation of the use tax and use tax reporting requirements.
(3)
Who is liable for the use tax on
			 promotional material?
The use tax is imposed on the consumer. Effective
			 June 1, 2002, the law provides that with respect to promotional material
			 distributed to persons within this state, the consumer is the person who
			 distributes or causes the distribution of the promotional material. A consumer
			 as defined in this rule is responsible for remitting use tax only if the
			 consumer has nexus in Washington.
(a)
Example 1.
Department Store contracts with Printer to print
			 promotional material advertising sale merchandise available at Department
			 Store's Washington locations. Printer distributes promotional material to
			 Department Store's customers. Department Store is the consumer of the
			 promotional material and is liable for use tax on promotional material
			 distributed into Washington. Neither Printer nor Department Store's customers
			 are consumers of this promotional material.
(b)
Example 2.
Retailer
			 contracts with Seattle Advertising Agency for advertising services. Advertising
			 Agency makes a single charge for all services, which includes designing,
			 printing, and distributing catalogs to potential customers. Advertising Agency
			 contracts with California Printer to print and prepare for distribution
			 promotional material advertising a new Washington location. Retailer is the
			 consumer of the catalogs and is liable for use tax on the promotional material
			 sent to Washington addresses. Neither Advertising Agency nor potential
			 customers are consumers of this promotional material.