Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-19301 - Multiple activities tax credits

Current through Register Vol. 24-14, July 15, 2024
(1)
			 Introduction. Under the provisions of
			 RCW
			 82.04.440 as amended effective August 12,
			 1987, Washington state's business and occupation taxes imposed under
			 chapter
			 82.04 RCW were adjusted to
			 achieve constitutional equality in the tax treatment of persons engaged in
			 intrastate commerce (within this state only) and interstate commerce (between
			 Washington and other states). The business and occupation tax system taxes the
			 privilege of engaging in specified business activities based upon "gross
			 proceeds of sales" (RCW 82.04.070 ) and the "value of
			 products" (RCW 82.04.450 ) produced in this
			 state. In order to maintain the integrity of this taxing system, to eliminate
			 the possibility of discrimination between taxpayers, and to provide equal and
			 uniform treatment of persons engaged in extracting, manufacturing, and/or
			 selling activities regardless of where performed, a statutory system of
			 internal and external tax credits was adopted, effective August 12, 1987. This
			 tax credits system replaces the multiple activities exemption which, formerly,
			 assured that the gross receipts tax would be paid only once by persons engaged
			 in more than one taxable activity in this state in connection with the same end
			 products. Unlike the multiple activities exemption which only prevented
			 multiple taxation from within this state, the credits of the new system apply
			 for gross receipts taxes paid to other taxing jurisdictions outside this state
			 as well.
(2) Definitions. For
			 purposes of this rule the following terms will apply.
(a) "Credits" means the multiple activities
			 tax credit(s) authorized under this statutory system also referred to as
			 MATC.
(b) "Gross receipts tax"
			 means a tax:
(i) Which is imposed on or
			 measured by the gross volume of business, in terms of gross receipts or in
			 other terms, and in the determination of which the deductions allowed would not
			 constitute the tax an income tax or value added tax; and
(ii) Which is not, pursuant to law or custom,
			 separately stated from the selling price.
(c) "Extracting tax" means a gross receipts
			 tax imposed on the act or privilege of engaging in business as an extractor,
			 and includes the tax imposed by
			 RCW
			 82.04.230 (tax on extractors) and similar
			 gross receipts taxes paid to other states.
(d) "Manufacturing tax" means a gross
			 receipts tax imposed on the act or privilege of engaging in business as a
			 manufacturer, and includes:
(i) The taxes
			 imposed in
			 RCW
			 82.04.240 (tax on manufacturers) and
			 subsections (2) through (5) and (7) of
			 RCW
			 82.04.260 (tax on special manufacturing
			 activities) and
(ii) Similar gross
			 receipts taxes paid to other states.
The term "manufacturing tax," by nature, includes a gross
				receipts tax upon the combination of printing and publishing activities when
				performed by the same person.
(e) "Selling tax" means a gross receipts tax
			 imposed on the act or privilege of engaging in business as a wholesaler or
			 retailer of tangible personal property in this state or any other state. The
			 term "selling" has its common and ordinary meaning and includes the acts of
			 making either wholesale sales or retail sales or both.
(f) "State" means:
(i) The state of Washington,
(ii) A state of the United States other than
			 Washington or any political subdivision of such other state,
(iii) The District of Columbia,
(iv) Territories and possessions of the
			 United States, and
(v) Any foreign
			 country or political subdivision thereof.
(g) "Taxes paid" means taxes legally imposed
			 and actually paid in terms of money, credits, or other emoluments to a taxing
			 authority of any "state." The term does not include taxes for which liability
			 for payment has accrued but for which payment has not actually been made. This
			 term also includes business and occupation taxes being paid to Washington state
			 together with the same combined excise tax return upon which MATC are
			 taken.
(h) "Business,"
			 "manufacturer," "extractor," and other terms expressly defined in
			 RCW
			 82.04.020 through 82.04.-212 have the
			 meanings given in those statutory sections regardless of how the terms may be
			 used for other states' taxing purposes.