WSR 98-18-059

PROPOSED RULES

DEPARTMENT OF LICENSING

[Filed August 31, 1998, 1:04 p.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 98-13-003.

Title of Rule: Chapter 308-72 WAC, Motor vehicle fuel tax and chapter 308-77 WAC, Special fuel tax rules and regulations.

Purpose: To establish administrative rules to administer and clarify the provisions of SHB 2659 regarding the administration and collection of state motor vehicle fuel and special fuel taxes. To repeal or amend existing administrative rules which conflict with the provisions of the bill.

Statutory Authority for Adoption: RCW 82.36.435 and 82.38.260.

Statute Being Implemented: Chapters 82.36 and 82.38 RCW.

Summary: Administrative rules are necessary to administer and clarify the provisions of SHB 2659. This bill changes the manner in which the motor vehicle fuel and special fuel tax programs are administered by the Department of Licensing. The bill changes the point of taxation for motor vehicle fuel and special fuel; creates new reporting requirements; creates new license types and license application requirements, eliminates some existing tax types; and creates a dyed special fuel program.

Reasons Supporting Proposal: Key provisions of SHB 2659 require additional clarification and interpretation to facilitate effective administration by the department and to assist licensees in understanding and complying with the law. Passage of SHB 2659 requires the repeal or amendment of administrative rules currently in place.

Name of Agency Personnel Responsible for Drafting: Art Farley, Olympia, Washington 98504, (360) 753-6993; Implementation: Paige Boule, Olympia, Washington 98504, (360) 664-2500; and Enforcement: Thao Pham Manikoth, Olympia, Washington 98504, (360) 753-6860.

Name of Proponent: Department of Licensing, Prorate and Fuel Tax Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: New motor vehicle fuel tax and special fuel tax rules have been proposed which accomplish the following:

Promulgates the authority of the Department of Licensing to require fuel tax payments remitted by electronic funds transfers to be submitted on the last state business day before the 10th of the month if the 10th falls on a weekend or holiday.

Allows fuel tax refunds of $100.00 or less to be submitted without supporting purchase invoices, reducing administrative burden on the department and refund claimant.

Clarifies the definition of "export" to assist in ensuring tax-exempt fuel purchased for export is delivered outside the state of Washington.

Clarifies the definition of "motor vehicle fuel supplier" and "special fuel supplier" to assist licensees in determining what license is appropriate for their business activity.

Creates a delinquent account notification process for licensees as required by statute. This provides a process for fuel suppliers to notify the department when they have not received tax payments from purchases of fuel.

Creates a process for licensees, other than fuel suppliers, to obtain refunds of fuel tax paid on worthless accounts receivable.

Clarifies the date of receipt of refund claims for purposes of applying interest.

Additional amendments to the motor vehicle fuel tax and special tax administrative rules are proposed in order to repeal rules that either conflicted with, or became obsolete by, the passage of SHB 2659. Areas of amendment or repeal include license application requirements and tax reports; recordkeeping; purchase invoice documentation; tax exemptions; and bonding.

Proposal Changes the Following Existing Rules: The proposal will repeal the following sections of chapters 308-72 and 308-77 WAC: WAC 308-72-502 Sale or distribution at wholesale, 308-72-504 Bona fide wholesale merchant, 308-72-508 Requirements to qualify for a motor vehicle distributor license, 308-72-520 Reports, 308-72-530 Import deliveries, 308-72-600 Tax refund, 308-77-032 Special fuel dealer's license, 308-77-034 Special fuel user's license, 308-77-042 Special fuel user bond, 308-77-044 Bonding requirements, 308-77-060 Special fuel dealers' liability for the tax, 308-77-070 Exemptions, 308-77-100 Credit for bad debt losses of special fuel dealers, 308-77-120 Tax reports, 308-77-125 Tax rate change, and 308-77-130 Ten day reports and payments by special fuel dealer.

Amendatory sections include: WAC 308-72-540 Tax exempt transactions, 308-72-542 Tax exempt sales to qualified personnel of foreign governments, 308-72-550 Tax exempt losses, 308-72-560 Records, 308-72-570 Invoices, 308-72-620 Filing of claim, 308-72-630 Invoice requirements, seller responsibility, 308-72-640 Records, 308-72-650 Refunds to dealers delivering fuel exclusively for marine use, 308-72-660 Power take-off use, 308-72-670 Auxiliary engines, 308-77-010 Definitions, 308-77-020 Incidental use/exemptions, 308-77-040 Issuance of license, 308-77-050 Cancellation or revocation of license, 308-77-095 Minimum tax payment, 308-77-110 Allowance of credit or refund of tax paid, 308-77-150 Records, receipts, and invoices, 308-77-160 Sales invoices, 308-77-165 Export sales, 308-77-190 Audit appeal procedure, 308-77-220 Filing of refund claim, 308-77-230 Invoice requirements for refund purposes, 308-77-250 Power take-off use, and 308-77-260 Auxiliary engines.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Members of the impacted industries and Department of Licensing staff reviewed the proposed amendments to chapters 308-72 and 308-77 WAC. No comments regarding the economic impacts of the proposed amendments were received.

RCW 34.05.328 does not apply to this rule adoption. These rules do not apply under RCW 34.05.328(5).

Hearing Location: On October 6, 1998, at 10 a.m. to noon, Department of Licensing, 405 Black Lake Boulevard, Building 2, BPD1, Olympia, WA 98502; and on October 8, 1998, at 10 a.m. to noon, Spokane Library, 906 West Main, Room 1A, Spokane, WA 99201.

Assistance for Persons with Disabilities: Contact Art Farley by October 1, 1998, TDD (360) 664-9492.

Submit Written Comments to: Art Farley, Department of Licensing, P.O. Box 9020, Olympia, WA 98504, fax (360) 664-2365, e-mail afarley@dol.wa.gov, by October 16, 1998.

Date of Intended Adoption: November 4, 1998.

August 31, 1998

Roger Wilson

Acting Administrator

OTS-2443.1

NEW SECTION

WAC 308-72-501  Exports. "Export" means to obtain motor vehicle fuel in this state for sale or distribution outside this state. To be considered an "export" and qualify for exemption from the motor vehicle fuel tax, motor vehicle fuel obtained outside the bulk transfer terminal system must be physically off-loaded in the destination state, province, or foreign country and the exporter must be licensed or registered, if required, in the state, province, or country of destination.

[]

NEW SECTION

WAC 308-72-503  Motor vehicle fuel supplier. "Motor vehicle fuel supplier" means a person who is licensed, and:

(1) Owns and stores motor vehicle fuel within the bulk transfer/terminal system, including motor vehicle fuel in a terminal facility; or

(2) Refines and stores motor vehicle fuel at a refinery.

[]

NEW SECTION

WAC 308-72-505  Electronic fund transfers. If you are paying your motor vehicle fuel tax by electronic funds transfer, and the due date for payment of the motor vehicle fuel tax falls on a Saturday, Sunday, or legal holiday, you must transfer the funds by the last state business day immediately preceding the due date. (For example, if the payment is due on Saturday, April 10, 1999, you must transfer the funds by April 9, 1999.)

[]

AMENDATORY SECTION (Amending Order PFT 90-03, filed 6/14/90, effective 7/15/90)

WAC 308-72-509  Bonding requirements. The bond may be in the form of a corporate surety bond pursuant to RCW 82.36.060, or in the form of lawful money of the United States in the amount so fixed by the department.

The department may also accept certificates of deposit of lawful money of the United States in any of the following forms:

(1) Automatically renewable certificate(s) of deposit, not exceeding the federally insured amount, issued by a bank doing business in the state of Washington and insured by the Federal Deposit Insurance Corporation, made in the name of the licensee or applicant for the license, payable to or assigned to the Washington state treasurer; or

(2) Certificate(s) of deposit or share account, not exceeding the federally insured amount, issued by a savings and loan association doing business in the state of Washington and insured by the Federal Savings and Loan Insurance Corporation. Evidence of the insured account, in the form of either a certificate of deposit or passbook, must be filed with the department along with a properly executed assignment form whereby the fund on deposit is assigned to the Washington state treasurer.

(3) Certificate(s) of deposit or share account, issued by a credit union doing business in the state of Washington and insured by the Washington Credit Union Share Guaranty Association, not exceeding the amount insured by the guaranty association. Evidence of the insured account, in the form of either a certificate of deposit or passbook, must be filed with the department along with a properly executed assignment form whereby the fund on deposit is assigned to the Washington state treasurer.

The certificate and/or the assignment forms shall contain the provision that interest earned shall be payable to the depositor, and that the assignment may only be ((cancelled)) canceled upon written authorization of the director of licensing or the director's designee.

[Statutory Authority: RCW 82.36.435. 90-13-037 (Order PFT 90-03), § 308-72-509, filed 6/14/90, effective 7/15/90.]

AMENDATORY SECTION (Amending Order PFT 88-003, filed 3/22/88)

WAC 308-72-512  Cancellation of ((distributor's)) license. A ((distributor)) license may be ((cancelled)) canceled by the director under the following circumstances.

(1) Upon written request of the ((distributor)) licensee, such cancellation to become effective sixty days from the date of receipt of the written request of such ((distributor)) licensee for cancellation thereof.

(2) Upon investigation and sixty days notice if the director ascertains and finds that the person to whom the license is issued is no longer engaged in the ((business of a distributor,)) sale or distribution of motor vehicle fuel and has not been so engaged for the period of six months prior to such cancellation. A licensee whose sales or distributions of motor vehicle fuel at wholesale constitutes less than a substantial part of ((his/her)) the total volume of sales during a consecutive six month period((, as disclosed by the licensees monthly fuel tax reports,)) is considered no longer engaged in the business of a ((distributor)) licensee, and the ((distributor)) license must be ((cancelled)) canceled as provided in RCW 82.36.190.

(3) Upon failure to file a new bond or to make deposits (cash) in accordance with RCW 82.36.060, when surety requests to be released or discharged.

(4) Upon failure to file new or additional surety bond or to deposit additional securities within thirty days after being requested to do so by the department.

[Statutory Authority: RCW 82.36.435. 88-07-095 (Order PFT 88-003), § 308-72-512, filed 3/22/88.]

AMENDATORY SECTION (Amending Order PFT 90-03, filed 6/14/90, effective 7/15/90)

WAC 308-72-540  Tax exempt transactions. (1) Exports. Exemption from the motor vehicle fuel tax may be claimed when a ((licensed distributor)) licensee delivers motor vehicle fuel:

(a) To a customer at a point outside the state by means of equipment owned and operated or completely controlled by the ((licensed distributor)) licensee.

(b) To a common or contract "carrier" for transportation to a destination outside the state under a bill of lading or a shipping contract that definitely establishes that the ((Washington licensed distributor)) licensee claiming the export actually and, in fact, retains title to and control over said fuel until actual delivery to its destination out of the state of Washington.

(c) To another ((Washington licensed distributor)) licensee at a destination outside the state. The delivering ((distributor)) licensee shall claim exemption by reason of export and shall report such transactions in the same manner as an export to any other customer.

(d) To another ((Washington licensed distributor)) licensee at a destination outside this state following a receipt from another ((licensed distributor)) licensee in this state. The ((licensed distributor)) licensee receiving the fuel in this state shall be deemed the exporter.

(((e) Into the transportation equipment of a buyer or a common or contract carrier employed by the buyer if the buyer transports the fuel to a location in a foreign nation.))

(2) United States armed forces and National Guard. Exemption from the motor vehicle fuel tax may be claimed when a ((licensed distributor)) licensee delivers motor vehicle fuel:

(a) To the United States armed forces or National Guard under a government bill of lading for the express purpose of exportation from the state by the armed forces or National Guard.

(b) Into the fuel tanks of ships operated by the United States armed forces or National Guard and bearing armed forces or National Guard identification names or numbers.

(c) Into the storage facilities of the United States armed forces or National Guard maintained exclusively for the purpose of fueling ships.

(d) Within the state in accordance with a credit or courtesy card issued to the United States armed forces or National Guard by a ((licensed distributor)) licensee provided that a delivery is made into the fuel tanks of ships operated by the United States armed forces or National Guard.

(((e) No exemptions shall be granted for motor vehicle fuel sold to contractors acting as agents of the United States armed forces or National Guard for use in the performance of contracts with the United States armed forces or National Guard.

(3) Sales or distributions to other licensed distributors. Exemption from the motor vehicle fuel tax may be claimed when a licensed distributor delivers motor vehicle fuel to another Washington licensed distributor in this state except no sale or distribution of motor vehicle fuel from one licensed distributor to another licensed distributor may be made free of motor vehicle fuel tax where the sale or distribution is a withdrawal of motor vehicle fuel for delivery to a retail service station or to unlicensed bulk storage. No exemption from motor vehicle fuel tax may be claimed where a sale or distribution is a withdrawal of motor vehicle fuel for delivery to a retail service station or to unlicensed bulk storage.

(4) Sales for immediate export out of the state by purchaser.

(a) Exemption from the motor vehicle fuel tax may be claimed when a licensed distributor sells motor vehicle fuel in this state to a purchaser other than another licensed distributor, and the fuel is delivered into the transportation equipment of the purchaser or a common or contract carrier employed by the purchaser, and the purchaser transports the fuel and unloads it at a location outside the state.

(b) The selling distributor must issue to the purchaser an invoice which shall contain at least the following details:

(i) Name and address of seller;

(ii) Name and address of purchaser;

(iii) The date of delivery (month, day, and year);

(iv) The location of the point of shipment, in words;

(v) The place of delivery, in words, if different from shipping point;

(vi) Purchaser's method of transporting fuel (either customer equipment, common carrier, or pipeline, if by common carrier, common carrier's name);

(vii) State or foreign jurisdiction of destination;

(viii) Name of product sold;

(ix) The quantity, in gallons, of product sold;

(x) The price per gallon and total amount charged; and

(xi) The statement: "Ex Washington State Fuel Tax."

(c) The original copy of the invoice must be furnished the purchaser; a copy of the invoice must be kept by the selling distributor as required by RCW 82.36.160 and WAC 307-72-560.

(d))) For a licensee who is required to report, these sales shall be supported by Schedule 10, Uniform Motor Vehicle Fuel Tax Multiple Schedule of Disbursements (Form FT 441-841), a separate schedule for each state of destination. The department shall furnish the government agency of the state or foreign jurisdiction of destination a copy of this Schedule 10 to give information on the movement of untaxed fuel across state lines. In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the schedule must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place.

[Statutory Authority: RCW 82.36.435. 90-13-037 (Order PFT 90-03), § 308-72-540, filed 6/14/90, effective 7/15/90; 88-07-095 (Order PFT 88-003), § 308-72-540, filed 3/22/88; Order 107MV, § 308-72-540, filed 9/10/71.]

AMENDATORY SECTION (Amending Order PFT 90-03, filed 6/14/90, effective 7/15/90)

WAC 308-72-542  Tax exempt sales to qualified personnel of foreign governments. (1) Tax exempt sales of motor vehicle fuel may be made by a ((licensed motor vehicle fuel distributor)) licensee, other than an exporter, to qualified foreign diplomatic and consular missions and their qualified personnel ((by means of)) if the diplomatic, consular missions, and qualified personnel maintain tax exempt credit card accounts. The Office of Foreign Missions, United States Department of State, will determine who are qualified under existing federal treaties or agreements with foreign governments.

(2) Motor vehicle fuel purchased by cash is not tax exempt.

(3) The tax exempt credit card accounts may be obtained by foreign government personnel from oil companies through the Office of Foreign Missions of the United States Department of State, 3005 Massachusetts Avenue N.W., Washington, D.C. 20008, Attention: Gasoline Tax Exemption Program.

(4) ((Distributors)) Licensees issuing credit cards for the purchase of motor vehicle fuel, shall not accept credit card applications for diplomatic motor vehicle fuel tax exemption, unless the application is accompanied by Form DSP-99A, issued by the Office of Foreign Missions, United States Department of State, and approved by that office.

(5) Such sales shall be reported on the licensee's monthly tax return under "Sales to Qualified Foreign Government Personnel" and supported by an accompanying schedule showing the month of sale, the name of the foreign government personnel, and the quantity in gallons of motor vehicle fuel sold. Licensees, who are not required to submit monthly tax returns, may apply for a refund of the motor vehicle fuel tax previously paid on motor vehicle fuel sold tax exempt under this section.

[Statutory Authority: RCW 82.36.435. 90-13-037 (Order PFT 90-03), § 308-72-542, filed 6/14/90, effective 7/15/90.]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-550  Tax exempt losses. (1) Motor vehicle fuel lost or destroyed in this state while being transported in the equipment of a ((licensed distributor)) licensee or in the equipment of a common or contract carrier for a ((Washington licensed distributor)) licensee shall be ((reported)) considered as a taxable distribution. Credit for ((the tax)) or a refund of the motor vehicle fuel tax paid may be taken when the ((licensed distributor)) licensee or the common or contract carrier furnishes acceptable proof of the exact quantity of fuel lost provided the documents in support of the loss are submitted to the director for approval. Acceptable proof of loss shall ordinarily be understood to consist of:

(a) An affidavit by a person having actual knowledge of the loss, setting forth the origin and destination of the shipment, the circumstances surrounding the loss, the exact quantity of fuel lost, the exact quantity of fuel salvaged, the disposition of the salvaged fuel, and the procedure used in the determination of the quantity of fuel lost;

(b) A signed statement by a state patrol officer or official witness to the loss;

(c) A bill of lading or other shipping document;

(d) A statement by the ((licensed distributor)) licensee establishing his ownership of the fuel at time of loss;

(2) Loss of ((ex-tax)) motor vehicle fuel which has been proven lost or destroyed prior to distribution from a ((licensed distributor's)) licensee's bulk storage plant is allowable. Affidavits or other documentary evidence substantiating losses shall be retained by the ((license distributor)) licensee. ((Unproven)) Unproved losses shall be considered as distribution subject to tax.

(3) ((Exemption from the tax shall not be allowed on losses of tax-paid fuel, losses from unlicensed bulk storage plants, or losses from storage tanks which are connected to retail outlets. A refund of the tax may be allowed for tax-paid fuel lost or destroyed as provided in RCW 82.36.370.

(4))) Charges for losses made to employees or agents of the ((licensed distributor)) licensee or to other persons who fail to satisfactorily account for fuel shall be invoiced inclusive of tax.

(((5))) (4) Other losses shall be accounted for and supported by proof which clearly established their validity.

[Order 107MV, § 308-72-550, filed 9/10/71.]

NEW SECTION

WAC 308-72-555  Delinquent account notification process. In this section, "distributor" means motor vehicle fuel distributor; and "supplier" means motor vehicle fuel supplier.

(1) When a distributor does not pay a supplier the motor vehicle fuel taxes which are due, the supplier must notify the department. The supplier must notify the department of the fuel tax delinquency no later than twenty calendar days from the date the fuel tax was due to the supplier. If that twentieth day falls on a Saturday, Sunday, or holiday, the supplier must notify the department on the next business day. The supplier must completely fill out the form that has been developed by the department for this purpose.

(2) The department's receipt of the completed notification form constitutes satisfactory evidence that the distributor has failed to pay the motor vehicle fuel taxes owed.

(3) When the distributor's license has been suspended for nonpayment of the motor vehicle fuel taxes due a supplier, the department will notify all suppliers of the suspension in one or more of the following ways:

(a) Posting notification of the suspension on the department's web site;

(b) Transmission of the notification via electronic mail or facsimile;

(c) Mailing of the notification via U.S. mail.

[]

NEW SECTION

WAC 308-72-557  Refund for bad debt loss (other than a motor fuel supplier). (1) You may request a refund for tax paid on a worthless accounts receivable if you:

(a) Are a motor vehicle fuel importer, motor vehicle fuel blender, or motor vehicle fuel distributor; and

(b) Paid tax on an account found to be a worthless accounts receivable; and

(c) Charged off the amount for federal income tax purposes.

(2) The right to the tax refund arises during the month the account is reported as a bad debt on your federal income tax return. You may request the tax refund during any month within three years of the month in which you reported the bad debt. (For example, if you reported the bad debt in June 1999, you can request the tax refund in any month up to June 2002.)

(3) You must supply the department with a copy of the federal income tax return and a supporting schedule listing the bad debt as charged off. This is sufficient proof for the department to establish the validity of the tax refund.

(4) You cannot claim a tax refund for any portion of a debt which has been recovered, but is retained by or paid to a person as compensation in collecting the account. (For example, a collection agency.)

(5) If the purchaser of the motor vehicle fuel is indebted to you for other items, payments made by the purchaser must first be credited to the amount owed for the motor vehicle fuel and motor vehicle fuel tax, unless instructed otherwise by the purchaser. You must apply the amount collected ratably to the charges for the fuel and the tax.

(6) If you are a motor vehicle fuel importer or motor vehicle fuel blender, and you collect any motor vehicle fuel tax previously taken as a tax refund on a worthless accounts receivable, you must include that motor vehicle fuel tax in the tax return for the reporting period that motor vehicle fuel tax was collected in.

(7) If you are a motor vehicle fuel distributor, you must remit the motor vehicle fuel tax collected to the department no later than the last state business day of the month immediately following the month of collection. (For example, if you collected the tax in June 1999, you must remit the amount collected to the department by July 30, 1999.)

[]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-560  Records((--Distributors--Dealers--Brokers)). (1) Every ((licensed distributor)) licensee and every dealer ((and every broker)) shall maintain a complete stock summary of the gallons of motor vehicle fuel handled each month which reflects inventories, receipts, sales, use, other distribution, and loss or gain. The stock summary shall be supported by:

(a) Physical inventories of bulk storage plants taken at the close of each calendar month;

(b) Meter readings for pumps through which fuel is dispensed taken at the close of each calendar month;

(c) A record of fuel receipts together with invoices, bills of lading, transfer documents, yield reports, and other documents relative to the acquisition of fuel;

(d) A record of fuel disbursements together with invoices, bills of lading and other documents relative to the disbursements of fuel.

(2) All receipts into storage and withdrawals from storage shall be recorded at the storage facility at which made.

[Order 107MV, § 308-72-560, filed 9/10/71.]

AMENDATORY SECTION (Amending Order PFT 90-03, filed 6/14/90, effective 7/15/90)

WAC 308-72-570  Invoices. (1) Every ((licensed distributor and every broker)) licensee shall issue an invoice at the time of each sale, distribution or use. An invoice is defined as: Any document, paper or electronic, evidencing the transfer of title to motor vehicle fuel ((and which)). If an electronic invoice is issued, a paper copy of the invoice must be produced if required by the department or if submitted in support of a refund claim. Each invoice must include the following information:

(a) The name and motor vehicle fuel tax license number of the ((distributor or broker)) licensee;

(b) The name ((and)), address, and motor vehicle fuel tax number, if applicable, of the purchaser;

(c) The date of delivery; (month, day and year)

(d) The location of the point of shipment, in words;

(e) The place of delivery, including the name of the state or Canadian Province, in words, if different from shipping point;

(f) Customers truck or common carrier when delivered thereto;

(g) Name of product sold;

(h) The quantity, in gallons, of product sold;

(i) The price per gallon and total amount charged;

(j) The statement "Ex Washington motor vehicle fuel tax" if exemption is claimed; ((and))

(k) In the case of border or interstate sales where place of delivery may be different than purchaser's address, indicate, "state" where delivered, i.e., Washington delivery, Idaho delivery, Oregon delivery; and

(l) In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the invoice must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place.

(2) Returns. When motor vehicle fuel is physically returned for credit or refund from a customer other than a dealer (service station) the ((licensed distributor)) licensee may claim credit or request a refund for the tax previously paid if the original invoice is obtained from the customer and retained by the ((licensed distributor)) licensee. When the number of gallons returned is less than the quantity sold and when the customer desires to file claim for refund of tax on the unreturned portion, the ((licensed distributor)) licensee shall obtain the refund copy of the delivery invoice and retain it in the tax files. In such cases, a new invoice may be issued for the unreturned portion, making reference to the original date of delivery and invoice number. If the ((licensed distributor)) licensee is unable to obtain the customer's ((original)) invoice when motor vehicle fuel is physically returned, the ((licensed distributor)) licensee receiving the fuel may obtain permission from the director to claim credit or refund for the tax without obtaining the ((original)) invoice after furnishing the name and address of the customer, name or location of the ((licensed distributor's)) licensee's station making the sale, date and number of the delivery invoice, gallons delivered and gallons returned.

An invoice used to record a returned sale or billing adjustment resulting in a credit, must be clearly identified as a credit invoice by means other than circling of figures.

When circumstances require an invoice prepared at the time of delivery to be replaced by another, the new document must include all of the pertinent information shown on the first document including the date of transaction and any unique transaction codes or numbers identifying the first document.

(3) Own use, taxable. Fuel used in motor vehicles or for other taxable purposes by a ((licensed distributor)) licensee or ((his)) an agent of the licensee shall be supported by an invoice or usage report covering the total fuel used at a particular plant during the month. If motor vehicle fuel is acquired from another ((licensed distributor)) licensee or a dealer, the invoice shall be retained in the ((licensed distributor's)) licensee's files and the purchase noted on the usage report.

(4) Own use, tax refundable. If motor vehicle fuel is used for a purpose subject to tax refund, the ((licensed distributor)) licensee may claim credit or request a refund for such use ((on the statement)). In such case, the supporting invoices or ((usage report)) tax return shall clearly indicate the use as well as the equipment in which used.

[Statutory Authority: RCW 82.36.435. 90-13-037 (Order PFT 90-03), § 308-72-570, filed 6/14/90, effective 7/15/90; Order 107MV, § 308-72-570, filed 9/10/71.]

AMENDATORY SECTION (Amending Order 470-DOL, filed 12/30/77)

WAC 308-72-610  Refund ((permit)) claim number. Any person desiring to claim a refund of the motor vehicle fuel tax shall make application for a refund ((permit)) claim number. The refund ((permit may)) claim number must be obtained before ((or at the time of)) filing a claim for refund and will be used for identifying subsequent refund claims.

[Order 470-DOL, § 308-72-610, filed 12/30/77; Order MV 175, § 308-72-610, filed 10/24/73; Order 107MV, § 308-72-610, filed 9/10/71.]

NEW SECTION

WAC 308-72-615  Interest assessment on refund claims. Within thirty business days after receipt of a motor vehicle fuel tax refund claim, the department must issue a refund. If the department does not issue the refund within thirty business days, interest is due. The first day of the thirty-day period begins on the date the properly filed and completed refund claim is received by the department. The postmark date on the envelope is not considered the received date for this purpose.

[]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-620  Filing of claim. (1) A refund claim may be filed monthly, quarterly, annually or for whatever period of time the applicant desires except that such claim must be filed not later than the close of the last business day of a period thirteen months from the date of purchase of the motor vehicle fuel. The postmark date will be recognized as the date claim was filed for purposes of establishing the last business day of the period.

(2) ((In all cases a claim shall be accompanied by the original (top copy) invoice or invoices issued to the claimant by the seller of the fuel. (For exception see subsection (5) of WAC 308-72-630.) All invoices of fuel purchased during the claim period including fuel purchased for licensed motor vehicles must be submitted with each claim)) If your motor vehicle fuel tax refund claim is one hundred dollars or less, you do not have to send your purchase invoices with your refund claim. The department may require you to submit copies of your purchase invoices to establish the validity of your refund claim.

(3) If electronic invoices were issued to the claimant, paper copies of the invoices must be submitted with the refund claim.

(4) Individuals must sign their own claims. A partnership claim may be signed by any one of the partners. Claims of business firms or corporations must be signed by an authorized agent. Accountants and other persons assisting in preparation of claims must also sign in the space provided. Claims should be made out in the same name as that shown on the invoices. If it is desired to have a claim paid in a name differing from that shown on the purchase invoice, attach a letter of authorization signed by the person to whom the invoice was issued.

[Order 107MV, § 308-72-620, filed 9/10/71.]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-630  Invoice requirements, seller responsibility. (1) The seller of motor vehicle fuel is required to issue to each purchaser who claims to be entitled to a refund separate invoices for each purchase of fuel ((on invoice forms approved by the director)). Each invoice must be ((the original)) issued at the time of purchase. ((An original invoice for the purpose of supporting a claim for refund of the motor vehicle fuel tax is the top copy of a set of invoices prepared simultaneously by hand or machine.))  Each invoice in support of a claim for refund must show:

(a) Name and address of the seller;

(b) ((Purchaser's name and address (invoices showing cash, boat number, equipment name or number, etc. will not qualify). Address not necessary on credit card invoices;

(c))) Kind or type of fuel and number of gallons delivered;

(((d))) (c) Complete date of sale (month, day and year).

(2) A single invoice covering multiple deliveries made during a period of time not to exceed one calendar month may constitute a separate invoice as required by subsection (1): Provided, each delivery is individually listed on the invoice or on an accompanying statement in accordance with the requirements of said subsection (1) for single deliveries. If the multiple delivery invoice includes deliveries on which refund of the tax is not claimed and deliveries on which refund is claimed, the invoice shall contain or be accompanied by a statement showing separately the deliveries and gallons on which tax is claimed as refundable and the nonrefundable deliveries and gallons.

(3) Invoices which indicate alterations, corrections or erasures shall be void and will not be accepted. Any person who alters any part of an invoice that will tend to give the claimant an illegal gain may have the entire claim invalidated and the director may suspend any further claims for refund for a period of one year.

(4) A "corrected invoice" used to support a claim must be accompanied by the original invoice. If an electronic invoice was issued, then a paper copy of the electronic invoice must be submitted.

(5) ((Credit card invoice forms shall be issued only when a purchaser holds a valid credit card. Such forms shall not be used to invoice cash sales. The original (top copy) credit card invoice is the only one acceptable for refund except as provided in subsection (6).

(6) In extenuating circumstances, copy invoices will be accepted. Each copy must bear a statement signed by the dealer that it is a certified or true copy of the original. In all cases the reason for use of copy invoices must be given. Payment of refund based upon such duplicate or copy invoices will not be made until after expiration of the thirteen month period specified in RCW 82.36.330.

(7))) If an ((original)) invoice is lost or destroyed, the ((dealer or distributor)) seller may issue a duplicate copy entering thereon the invoice number, date of sale, gallonage, price and amount, and any information that appeared on the ((original)) first invoice. The copies shall be certified by the seller as being true and correct according to his records and shall be plainly marked "copy" or "duplicate." The claimant may then submit the certified copy for validation. The validated copy will be returned to the claimant who, when the thirteen month time limit has elapsed for the copy, may submit it with a separate claim for refund showing the refundable and nonrefundable usage of the fuel.

(((8))) (6) Sellers of fuel shall not issue two ((original)) invoices, one each on a different form for the same delivery of fuel. Only one ((original)) invoice shall be issued for any one delivery.

[Order 107MV, § 308-72-630, filed 9/10/71.]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-640  Records. Each claimant shall maintain records which are sufficient to substantiate the accuracy of the claim. Such records shall reflect all motor vehicle fuel receipts, the gallons of fuel used in each type of equipment (both refundable and nonrefundable), other uses, loss and gain, and inventory on hand. The records must indicate the date of receipt or disbursements and identify the equipment into which the fuel is delivered or the purpose for which the fuel is used. Failure of the claimant to maintain the required records or to accede to a demand for examination of them constitutes a waiver of all rights to the refund. If the claimant maintains electronic invoices, paper copies of these invoices must be produced, upon demand of the department.

The following rules shall govern records maintained to support claims for refund:

(1) Use of fuel from common storage. Fuel purchased and delivered into bulk storage for use in vehicles required to be registered and licensed to operate on the public roads and for nonhighway use, must be fully accounted for by detail withdrawal records to accurately show the manner in which used. This record must be available for inspection upon request. Any fuel on hand (by actual measurement) should be indicated on the claim as closing storage inventory and should be reported as an opening storage inventory on the next claim. Credit for the inventory will be allowed on the next claim if it is filed within thirteen months from the filing date of the claim which established the inventory. All invoices for the total fuel purchased must be submitted with each claim unless the amount of the claim is one hundred dollars or less. (For exception see subsection (5) of this section.) ((a bulk storage receipt and disbursement record)) A bulk storage receipt and disbursement record form designated for recording purchases and withdrawals of fuel from bulk storage will be furnished free upon request.

(2) Use of fuel from separate storage. Where separate bulk storage tanks are maintained for nonhighway use and for public road use, seller should mark the invoices at the time of delivery identifying the storage into which the fuel was delivered. No further detailed record will be required. Inventories must be reported and all invoices must be submitted. ((fuel may not be used)) Fuel may not be used from the nonhighway tank in motor vehicles required to be registered and licensed. To do so will invalidate this method of determining refundable gallonage.

(3) Use of fuel from restricted use storage. Special storage facilities in the woods or farm fields or for other uses for certain periods should be identified and explained. If such storage is used entirely for nonhighway purposes and not used in motor vehicles required to be registered and licensed, no other record will be required. Purchase invoices showing delivery into such storage must be submitted and inventory at end of claim period should be reported.

(4) Fuel purchased for other than bulk storage. Fuel purchased in small containers for nonhighway use (boats, tractors, power saws, etc.) should be identified on the purchase invoice and no further record will be required.

(5) Proof of public road use. When no ((nonrefundable)) nonrefundable use deduction is made from invoices attached to the claim, claimant shall retain taxable invoices in ((his)) files and be prepared to substantiate fuel used in motor vehicles required to be registered and licensed upon request.

(6) Where a claim covering the operation of an unregistered or unlicensed motor vehicle is entirely over private roads or property subject to refund, no record will be required other than that necessary to show the source and number of gallons of fuel used.

[Order 107MV, § 308-72-640, filed 9/10/71.]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-650  Refunds to dealer delivering fuel exclusively for marine use. (1) Marine dealers may file claim for refund when motor vehicle fuel is delivered directly into the fuel tanks connected to the engine of any marine vessel owned or operated by the purchaser of the fuel, but only if the person to whom the fuel is sold is a holder of a valid motor vehicle fuel tax refund ((permit)) claim number at the time of sale. The dealer should request purchaser to exhibit ((his)) the refund ((permit)) claim number at the time of delivery. A claim for refund shall be supported by:

(a) ((Original (top copy))) Invoices covering fuel deliveries into the dealer's storage facilities. ((Licensed distributors who are also marine dealers will not be required to submit purchase invoices.))

(b) ((Original (top copy))) Invoices covering tax exempt sales of motor vehicle fuel. These invoices shall, in addition to the applicable invoice requirements of WAC 308-72-630, contain:

(i) The vessel or boat name;

(ii) The Coast Guard or official number;

(iii) The applicable sales tax;

(iv) Purchaser's motor vehicle fuel tax refund permit number;

(v) The statement "Ex Washington motor vehicle fuel tax."

(2) The dealer shall also file an exemption certificate containing a certificate signed by the purchaser that the fuel will be used solely for marine use. In lieu of a separate certificate, the dealer may imprint an exemption certification on his original sales invoices provided such form has been approved by the director.

(((3) Chapter 183, Laws of 1971 ex. sess., provides that one cent per gallon shall be deducted from each marine use refund claim to be deposited in the coastal protection fund.))

[Order 107MV, § 308-72-650, filed 9/10/71.]

AMENDATORY SECTION (Amending WSR 94-11-055, filed 5/10/94, effective 6/10/94)

WAC 308-72-660  Power take-off use. (1) Tax refund may be claimed for fuel used in a motor vehicle which is equipped with a power take-off unit to operate auxiliary equipment provided that the fuel used for power take-off operation is supplied from a tank which is not connected with a tank supplying fuel to propel the vehicle on the highway or if the fuel used to operate the auxiliary equipment by the power take-off is accurately measured by a metering device that has been specifically approved by the director, and, in certain motor vehicles, when established by the following formula:

(a) For gasoline used in pumping fuel oil or heating oil by means of a power take-off unit on a delivery truck at the rate of three-fourths of one gallon for each one thousand gallons of fuel or heating oil delivered. ((Pumping of gasoline or other refined petroleum products does not apply and claimant shall make a deduction for those products, other than fuel oil, pumped through the meter, pumping out of tanks, testing of meters or other uses. fuel oil deliver truck operators )) Fuel oil delivery truck operators must maintain records which show the total gallons of fuel oil or heating oil pumped by each vehicle for which refund is claimed together with supporting meter readings.

(b) For gasoline used in operating a power take-off unit on a cement mixer truck or for gasoline used in operating a power take-off unit which operates a load compactor on a garbage truck at the rate of twenty-five percent of the total gallons of gasoline used in each truck. Garbage trucks with power take-off units which operate only a dump box, hoist or other type of lift shall not apply. ((cement mixer truck and garbage truck operators)) Cement mixer truck and garbage truck operators must maintain records which show the total gallons of fuel used and the total miles operated for each vehicle.

(c) For gasoline used in operating a power take-off unit on any of the vehicles listed herein when direct measurement is not feasible, at the rate specified as a percentage of the total taxable fuel used by the vehicles:

If a claimant can provide satisfactory documentation and records to show that the fuel consumed by the power take-off is greater than the percentages indicated, the department may grant the higher percentage on a case by case basis.

(2) All claims must be accompanied by valid purchase invoices to cover the total gallons of gasoline purchased, except that invoices for gasoline used in fuel oil delivery trucks or when measured by a metering device need only be equal to or greater than the gallons claimed as refundable.

(3) If fuel is used from bulk storage, claimant shall maintain a detailed record of all receipts, withdrawals, and beginning and ending inventories to substantiate fuel used in motor vehicles.

(4) A schedule of vehicle operations shall support each claim for refund.

[Statutory Authority: RCW 82.36.435. 94-11-055, § 308-72-660, filed 5/10/94, effective 6/10/94; Order 107MV, § 308-72-660, filed 9/10/71.]

AMENDATORY SECTION (Amending Order 107MV, filed 9/10/71)

WAC 308-72-670  Auxiliary engines. Tax refund may be claimed for fuel used in auxiliary engines mounted on a licensed motor vehicle (ready mix concrete, refrigeration or air conditioning units, etc.) if the fuel for the auxiliary engine is supplied from a fuel tank other than the fuel tank which supplies the engine propelling the vehicle, or is accurately measured by a metering device that has been specifically approved by the director. Estimates for refundable use will not qualify for refund. When separate tanks are used, claimant shall maintain a detailed record of the gallons of fuel used and purchase invoices covering the total gallons of fuel used in both tanks must accompany the claim if the claim amount is greater than one hundred dollars. The department may require you to submit copies of your invoices to establish the validity of your refund claim.

[Order 107MV, § 308-72-670, filed 9/10/71.]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 308-72-502 Sale or distribution at wholesale.

WAC 308-72-504 Bona fide wholesale merchant.

WAC 308-72-508 Requirements to qualify for a motor vehicle fuel distributor license.

WAC 308-72-520 Reports.

WAC 308-72-530 Import deliveries.

WAC 308-72-600 Tax refund.

OTS-2444.2

AMENDATORY SECTION (Amending WSR 94-11-029, filed 5/9/94, effective 6/9/94)

WAC 308-77-010  Definitions. (1) "Highway" includes a way or place of whatever nature within the exterior boundaries of the state including a way or place within a federal area publicly maintained and open to the use of the public for purposes of vehicular travel notwithstanding private participation in the maintenance of the way or place. It shall be presumed that the way or place is dedicated and accepted as a highway when it is recognized as a part of its maintained highway system by a proper public authority.

A way or place within a national or state forest which is entirely privately constructed or maintained will not be considered a highway, notwithstanding the fact that it may be declared by the public authority to be a part of its road system.

A way or place is not a highway during such times as it is closed by the governmental authority to the use of the public regardless of the purpose for which it is closed. A highway is open to the use of the public if vehicular travel is permitted although subject to traffic controls.

Roads maintained exclusively by the United States within a national park are subject to the control of the Secretary of the Interior. When, in the exercise of that control, a permit and payment of a fee are required for the use of such roads, they are not highways open to the use of the public.

(2) "Special fuel" means that definition given in RCW 82.38.020(23) and includes diesel fuel, propane, natural gas and any other combustible liquid or gas by whatever name the liquid or gas may be known or sold for the generation of power to propel a motor vehicle on the highways except fuel that is subject to the tax imposed by the motor vehicle fuel tax law, chapter 82.36 RCW. Four and one-quarter pounds of propane or one hundred cubic feet of natural gas shall be deemed the equivalent of one liquid gallon.

(3) "Publicly owned fire fighting equipment" means fire fighting equipment owned by any agency of the state of Washington, or by any city, town, county, or fire protection district of Washington state, and shall include fire engines, aid cars, ambulances, and vehicles used to transport fire fighting personnel to the fire scenes.

(4) "Farmer" means any person, firm, partnership or corporation engaged in the cultivation and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities (except forestry or forestry operations), the raising of livestock, bees, fur-bearing animals, or poultry, and any practices performed on a farm as an incident to or in conjunction with such farming operations.

(5) "Logging company" means any person, firm, partnership or corporation engaged in the business of cutting and taking of timber.

(6) "Construction company" means any person, firm, partnership or corporation who or which is engaged in the business of a contractor.

(7) "Contractor" is any person, firm or corporation who or which, in the pursuit of an independent business undertakes to, or offers to undertake, or submits a bid to, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish, for another, any building, highway, road, railroad, excavation or other structure, project, development, or improvement attached to real estate or to do any part thereof including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works in connection therewith or who installs or repairs roofing or siding.

(8) "Export" means to obtain special fuel in this state for sale or distribution outside this state. To be considered an "export" and qualify for exemption from the special fuel tax, special fuel obtained outside the bulk transfer terminal system must be physically off-loaded in the destination state, province, or foreign country and the exporter must be licensed or registered, if required, in the state, province, or country of destination.

(9) "Special fuel supplier" means a person who is licensed and:

(a) Owns and stores special fuel within the bulk transfer/terminal system, including special fuel in a terminal facility; or

(b) Refines and stores special fuel at a refinery.

[Statutory Authority: RCW 82.37.170. 94-11-029, § 308-77-010, filed 5/9/94, effective 6/9/94. Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-010, filed 8/1/79; Order 475-DOL, § 308-77-010, filed 12/30/77; Order MV-191, § 308-77-010, filed 3/27/74; Order MV-137, § 308-77-010, filed 6/1/72; Order 114 MV, § 308-77-010, filed 11/26/71.]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-020  Incidental use/exemptions. An operation is not considered to be on a highway when a vehicle is operated thereon only for the purpose of moving between two pieces of private property when the vehicle is not operated for a distance exceeding fifteen miles on the highway and the moving is incidental to the primary use of the motor vehicle.

If fuel is used in the operation of a motor vehicle in a continuous trip which is partly on and partly off the highway, the tax applies to all the fuel used including the fuel used in the operation off the highway when the total distance traveled off the highway does not exceed one mile.

A continuous trip means a vehicular movement involving the use of a highway for the transportation of persons or property from one place to another or, in the instance of a round trip, from the point of origin of the movement to the point of destination and return to the point of origin.

The user shall maintain adequate accurate records of the operation off the highway including the miles traveled and fuel used to establish to the satisfaction of the department that the user is entitled to exemption for off-highway use of fuel. Claims based on estimates or percentages of miles traveled, hours of operation, fuel used, etc. will not be accepted to support claims for off highway use.

To qualify for a tax exemption for special mobile equipment as defined in RCW 46.04.552:

(1) Miles driven must be within the confines of a contract while actually engaged in work on the project; and

(2) You must provide positive means of measuring or determining the exact mileage between jobs or home base and off-highway and incidental mileage.

You cannot claim a tax exemption for mileage covered when units are moved from one project to another or returned to the base of operations. For these instances, you must be covered by a special fuel tax trip permit.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-020, filed 8/1/79; Order 114 MV, § 308-77-020, filed 11/26/71.]

AMENDATORY SECTION (Amending WSR 92-01-014, filed 12/6/91, effective 1/6/92)

WAC 308-77-040  Issuance of license. ((A special fuel supplier or dealer who wishes to conduct separate businesses at different locations will be issued a license for each business upon request and filing an application for a license and a bond (if required) for each. The license shall be displayed or kept available for inspection at the place of each business where fuel is sold and delivered to users.

A special fuel supplier or dealer having more than one place of business holding a single license shall reproduce the license and keep a photocopy on display at each additional place of business, each place of storage from which special fuel is sold or delivered, and in each motor vehicle used to transport special fuel owned by him for sale, delivery or use, and in addition, must identify by location and capacity all bulk storage plants of #1 and #2 distillates capable of being used as vehicle fuel as required by the department.

A)) An International Fuel Tax Agreement license or dyed special fuel user who wishes to conduct separate businesses at different locations or to operate two or more separate fleets of motor vehicles will be issued a license for each separate business or fleet upon request and filing an application for a license and a bond (if required) for each location or fleet. The license shall be displayed or be kept available for inspection at the owner's principal place of business and a reproduced copy thereof shall be carried in each motor vehicle entering this state from another state or province. A special fuel tax trip permit may be purchased by a special fuel user entering this state in lieu of ((a special fuel)) an International Fuel Tax Agreement license. The user must be the registered owner and/or lessee of the vehicle, or a dealer of motor vehicles. Operators of vehicles having two axles and a gross vehicle weight or registered gross vehicle weight exceeding twenty-six thousand pounds, or having three or more axles regardless of weight, or a combination of vehicles, when the combination exceeds twenty-six thousand pounds gross vehicle weight, will require ((a special fuel)) an International Fuel Tax Agreement license or a special fuel tax trip permit to enter this state.

[Statutory Authority: RCW 82.38.260. 92-01-014, § 308-77-040, filed 12/6/91, effective 1/6/92; 90-13-038 (Order PFT 90-04), § 308-77-040, filed 6/14/90, effective 7/15/90. Statutory Authority: RCW 82.38.020 (7), (8) and (9), 82.38.030, 82.38.040, 82.38.050, 82.38.080, 82.38.090, 82.38.120 and 82.38.260. 89-03-005 (Order PFT 89-02), § 308-77-040, filed 1/6/89. Statutory Authority: RCW 82.38.260. 86-02-058 (Order TL-RG-24), § 308-77-040, filed 12/31/85; 79-08-140 (Order 548 DOL), § 308-77-040, filed 8/1/79; Order 475-DOL, § 308-77-040, filed 12/30/77; Order MV-191, § 308-77-040, filed 3/27/74; Order MV-175, § 308-77-040, filed 10/24/73; Order 114 MV, § 308-77-040, filed 11/26/71.]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-050  Cancellation or revocation of license. When a special fuel ((supplier, dealer or user)) licensee ceases operation in Washington, ((he)) the licensee shall request cancellation of ((his)) the license. The original license issued to ((him)) the licensee and a final tax ((report)) return, if the licensee was required to file tax returns, shall be forwarded to the department with a remittance of any tax, penalty and interest which may have accrued up to and including the date of cancellation. All copies of the license, special authorizations, and identification cards issued by the department shall be destroyed. ((All special fuel authorizations and identification cards issued to the special fuel user shall be returned to the department.))

When the license of a ((special fuel supplier, dealer or user)) licensee is revoked by the department, the holder shall surrender the original license ((and all)) and any special authorizations and identification cards to the department. All copies of the license, special fuel authorizations, and identification cards issued ((to him. All copies of the license)) by the department shall be destroyed.

Any attempt to use a license that has been canceled or revoked will be considered a violation of the Special Fuel Tax Act and the ((supplier, dealer, or user)) person using the canceled or revoked license shall be subject to the penalty provisions thereof.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-050, filed 8/1/79; Order 114 MV, § 308-77-050, filed 11/26/71.]

NEW SECTION

WAC 308-77-091  Electronic fund transfers. If you are paying your special fuel tax by electronic funds transfer, and the due date for payment of the special fuel tax falls on a Saturday, Sunday, or legal holiday, you must transfer the funds by the last state business day immediately preceding the due date. (For example, if the payment is due on Saturday, April 10, 1999, you must transfer the funds by April 9, 1999.)

[]

AMENDATORY SECTION (Amending WSR 94-11-029, filed 5/9/94, effective 6/9/94)

WAC 308-77-095  Minimum tax payment. Each tax return that declares a tax liability of five dollars or less need not make remittance; conversely, each tax return that claims a refund or credit of ((five)) ten dollars or less will not be allowed.

A computation error on the tax return which results in additional tax liability in the amount of five dollars or less will be accepted without further collection action. Similarly, a computation error on the tax return which results in a credit of ((five)) ten dollars or less will not be refunded nor credited to the licensee.

[Statutory Authority: RCW 82.37.170. 94-11-029, § 308-77-095, filed 5/9/94, effective 6/9/94. Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-095, filed 8/1/79.]

NEW SECTION

WAC 308-77-105  Refund for bad debt loss (other than a special fuel supplier). (1) You may request a refund for tax paid on a worthless accounts receivable if you:

(a) Are a special fuel importer, special fuel blender, or special fuel distributor; and

(b) Paid tax on an account found to be a worthless accounts receivable; and

(c) Charged off the amount for federal income tax purposes.

(2) The right to the tax refund arises during the month the account is reported as a bad debt on your federal income tax return. You may request the tax refund during any month within three years of the month in which you reported the bad debt. (For example, if you reported the bad debt in June 1999, you can request the tax refund in any month up to June 2002.)

(3) You must supply the department with a copy of the federal income tax return and a supporting schedule listing the bad debt as charged off. This is sufficient proof for the department to establish the validity of the tax refund.

(4) You cannot claim a tax refund for any portion of a debt which has been recovered, but is retained by or paid to a person as compensation in collecting the account. (For example, a collection agency.)

(5) If the purchaser of the special fuel is indebted to you for other items, payments made by the purchaser must first be credited to the amount owed for the special fuel and special fuel tax, unless instructed otherwise by the purchaser. You must apportion the amount collected between the charges for the fuel and the tax.

(6) If you are a special fuel importer or special fuel blender, and you collect any special fuel tax previously taken as a tax refund on a worthless accounts receivable, you must include the special fuel tax in the tax return for the reporting period the special fuel tax was collected in.

(7) If you are a special fuel distributor, you must remit the special fuel tax collected to the department no later than the last state business day of the month immediately following the month of collection. (For example, if you collected the tax in June 1999, you must remit the amount collected to the department by July 30, 1999.)

[]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-110  Allowance of credit or refund of tax paid. The tax paid either directly to the department or to a special fuel ((dealer)) licensee in this state may be applied by the ((user)) special fuel licensee as a credit or refund against the tax due ((from him)) on all fuel used in this state in the month or reporting period in which the fuel, with respect to which the tax was paid, was used.

The amount of credit or refund allowable is the amount of tax shown on the invoices issued by special fuel ((dealers to the user)) licensees to the receiving special fuel licensee. To be entitled to the credit or refund, the ((user)) special fuel licensee shall retain in ((his)) records for inspection by the department all invoices given by special fuel ((dealers)) licensees showing the amount of tax paid and evidence of payment. Should the ((user)) special fuel licensee accumulate surplus credits or refundable amounts which have not been applied to payment of ((his)) the tax liability or if ((he)) the special fuel licensee ceases to be a ((user)) licensee in this state, ((he may file)) a claim for refund as provided in RCW 82.38.180 and 82.38.190 may be filed. All claims for refund of overpayments shall be accompanied by the invoices obtained by the ((user)) purchasing special fuel licensee from the selling special fuel ((dealer)) licensee.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-110, filed 8/1/79; Order 114 MV, § 308-77-110, filed 11/26/71.]

NEW SECTION

WAC 308-77-115  Delinquent account notification process. (1) When a distributor does not pay a supplier the special fuel taxes which are due, the supplier must notify the department. The supplier must notify the department of the fuel tax delinquency no later than twenty calendar days from the date the fuel tax was due to the supplier. If that twentieth day falls on a Saturday, Sunday, or holiday, the supplier must notify the department on the next state business day. The supplier must completely fill out the form that has been developed by the department for this purpose.

(2) The department's receipt of the completed notification form constitutes satisfactory evidence that the distributor has failed to pay the special fuel taxes owed.

(3) When the distributor's license has been suspended for nonpayment of the special fuel taxes due a supplier, the department will notify all suppliers of the suspension in one or more of the following ways:

(a) Posting notification of the suspension on the department's web site;

(b) Transmission of the notification via electronic mail or facsimile;

(c) Mailing of the notification via U.S. mail.

[]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-150  Records, receipts and invoices. Every ((special fuel supplier, dealer and user)) licensee and every person importing, manufacturing, refining, dealing in, transporting or storing special fuel shall maintain a complete record of all sales or other dispositions including special fuel used by them, inventories, purchases, receipts, tank gaugings or meter readings of special fuels the use of which is subject to the special fuel tax. Each special fuel user shall obtain from ((the)) a special fuel ((dealer)) licensee an invoice for each delivery of special fuel into the fuel supply tank or tanks of each vehicle operated ((by him)) and for each delivery into ((his)) bulk storage tank or tanks. The invoices shall include the information specified for sales invoices and shall be filed and identified in a systematic manner so that they may be readily traced into ((his)) purchase or expense records and into ((his)) reports to the department. Such records, receipts and invoices shall be made available for inspection by the department or its authorized representatives and shall be maintained for a period of not less than ((three)) five years. If electronic invoices are maintained, then a paper copy of the invoice must be produced upon demand of the department. A lessor of a vehicle who is a special fuel user shall also maintain records of each trip and the mileages ((his)) the lessor's vehicle is operated by the lessee within and without the state of Washington. A lessor who is a special fuel user must obtain from the lessee, and retain in ((his)) the lessor files, the original copy of all invoices substantiating claims by the lessor for purchases of fuel upon which the special fuel tax was paid.

The recordkeeping requirements of this section also apply to dyed special fuel which is:

(1) Purchased and used by licensed dyed special fuel users; and

(2) Authorized for use on the highway.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-150, filed 8/1/79; Order 114 MV, § 308-77-150, filed 11/26/71.]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-160  Sales invoices. Special fuel ((suppliers and dealers)) licensees shall prepare a serially numbered invoice for each sale of fuel whether the fuel is sold for use in motor vehicles or for other uses. A single invoice covering multiple deliveries of fuel made during a period of time not to exceed a calendar month may constitute an invoice of sale. ((When repeated sales are made of small quantities of special fuel exempt from the tax under RCW 82.38.080, such as heating oil in hand carried containers, and the customer does not want an invoice, a ledger may be kept with a separate line entry for each sale indicating date, number of gallons, amount of sale, and purpose for which the special fuel is to be used.)) If the multiple delivery invoice includes tax exempt deliveries ((either)) into a bulk storage facility ((or into fuel supply tanks of motor vehicles with respect to which the special fuel dealer is excused from collecting the tax as provided in rule WAC 308-77-060,)) of an authorized International Fuel Tax Agreement licensee and deliveries into the fuel supply tanks of motor vehicles upon which the tax is required to be collected, the invoice shall contain or be accompanied by a statement showing separately the deliveries and gallonage upon which the tax is collected and the tax ((exempt)) deferred deliveries and gallonage. ((The)) An original or electronic invoice shall be delivered to the purchaser and a copy thereof shall be retained by the special fuel ((supplier or dealer)) licensee. If an electronic invoice is issued, then a paper copy of the invoice must be produced upon demand of the department.

A sales invoice shall contain the following information:

(1) The name and ((address of the special fuel supplier or special fuel dealer.)) special fuel tax license number of the licensee;

(2) The name, address, and special fuel tax license number, if applicable, of the purchaser ((with respect to:

(a) A charge or credit sale.

(b) A cash sale when the purchaser desires to claim a refund of the special fuel tax.

(c) A cash sale when the quantity of fuel delivered into the fuel supply tank of a motor vehicle is 25 gallons or more.

(3) The special fuel license number of the purchaser, or other authority, as defined within WAC 308-77-060, if the special fuel tax is not collected on the sale.));

(((4))) (3) The date of ((sale)) delivery (month, day and year)((.));

(((5) The number of gallons of fuel sold, the price per gallon and the total amount of the sale.

(6))) (4) The location of the point of shipment, in words;

(5) The place of delivery, including state or foreign jurisdiction, in words, if different from shipping point. In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the invoice must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place;

(6) Purchaser's method of transporting fuel; either customer equipment, common carrier, (if by common carrier, common carrier name), barge, railcar, or pipeline;

(7) Name of product sold;

(8) The quantity of product sold, in gallons;

(9) The price per gallon and total amount charged;

(10) The amount of the special fuel tax collected;

(11) The statement "Ex Washington special fuel tax" if exemption is claimed.

The amount of the tax need not be separately stated if the invoice bears the notation that the price includes the special fuel tax. Billing systems for any type of dispenser of special fuel that uses a magnetic or other form of card identification must be approved by the department to assure that prospective refund claimants are provided with sufficient information to support their claims.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-160, filed 8/1/79; Order 114 MV, § 308-77-160, filed 11/26/71.]

AMENDATORY SECTION (Amending Order PFT 90-04, filed 6/14/90, effective 7/15/90)

WAC 308-77-165  ((Invoices for)) Export sales. ((A sale is considered for export under RCW 82.38.030(2) when a licensed special fuel dealer sells special fuel in this state to a purchaser who is not a licensed special fuel user or special fuel dealer, and the fuel is delivered into the transportation equipment of the purchaser or a common or contract carrier employed by the purchaser, and the purchaser transports the fuel and unloads it at a location outside the state.

The selling special fuel dealer must issue to the purchaser an invoice which shall contain at least the following details:

(1) Name and address of seller;

(2) Name and address of purchaser;

(3) The date of delivery (month, day, and year);

(4) The location of the point of shipment, in words;

(5) The place of delivery, in words, if different from shipping point;

(6) Purchaser's method of transporting fuel (either customer equipment, common carrier, or pipeline, if by common carrier, common carrier's name);

(7) State or foreign jurisdiction of destination;

(8) Name of product sold;

(9) The quantity, in gallons, of product sold;

(10) The price per gallon and total amount charged; and

(11) The statement: "Ex Washington State Fuel Tax."

The original copy of the invoice must be furnished the purchaser and a copy of the invoice must be kept by the selling special fuel dealer.

These)) (1) Export sales shall be reported as "export sales, exported by purchaser" and supported by Schedule 10, Uniform Motor Vehicle Fuel Tax Multiple Schedule of Disbursements (Form FT 441-841), a separate schedule for each state or foreign jurisdiction of destination. This Schedule 10 should be submitted with the tax report. The department shall furnish the government agency of the state or foreign jurisdiction of destination a copy of this Schedule 10 to give information on the movement of untaxed fuel across state lines.

(2) In the case of a delivery onto a federally recognized Indian reservation or onto Indian country, the invoice must identify the state within the contiguous United States, Hawaii, Alaska, District of Columbia, U.S. possession, or Canadian Province in which the delivery took place.

[Statutory Authority: RCW 82.38.260. 90-13-038 (Order PFT 90-04), § 308-77-165, filed 6/14/90, effective 7/15/90.]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-190  Audit appeal procedure. Any person having been issued a notice of assessment of additional taxes, delinquent taxes, penalties, or interest and desiring to contest such notice may petition the department of licensing for a reassessment by formal hearing or may petition for a reassessment conference in lieu of proceeding directly to a formal hearing. All petitions for reassessment must be in writing and must be received by the department of licensing within thirty days after the receipt of the original notice of assessment. All petitions filed shall set forth the specific reasons why reassessment is sought and the amount of tax, interest, and penalties which the petitioner believes to be due.

Upon receipt of a petition for a reassessment conference, the department will establish the time and place for the conference and notify the petitioner by mail at least ten days prior to the scheduled date. If the petitioner, for good and compelling reasons, is unable to attend the conference on the date or time scheduled, he may request the department in writing to reschedule the conference. At the conference the department of licensing will be represented by the administrator of ((the)) prorate and fuel tax ((division)) services, the ((assistant administrator)) licensing services manager for fuel tax, the field audit supervisor, the field auditor who performed the audit if appropriate, an attorney from the office of the attorney general, or either of them. The petitioner may appear in person or may be represented by an attorney, accountant, or any other person competent to present his case.

Following the conference, the administrator will make such determination as may appear to him just and lawful and in accordance with the Revised Code of Washington and rules, principles, and precedents established by the department of licensing, and shall notify the petitioner in writing of his decision. The determination of the administrator shall be deemed to represent the official position of the prorate and fuel tax division of the department of licensing and shall be binding upon the petitioner unless further appealed.

If the petitioner believes that an error has been made in the determination by the administrator, ((he)) the petitioner may, within ten days after the date of receipt of the determination, appeal in writing and request a formal hearing by a hearing officer. The appeal shall indicate the portions of the determination which the petitioner feels are in error and set forth ((his)) the reasons for believing that the decision should be amended. The department will establish a time and place for a formal hearing and give the petitioner at least ten days notice of the time and place thereof.

The decision of the department upon a petition for reassessment shall become final, due and payable thirty days after service upon the petitioner of notice thereof.

All petitions and correspondence relating to appeal conferences and hearings will be addressed to Department of Licensing, Administrator, Prorate and Fuel Tax ((Division, Highways-License Building)) Services, P.O. Box 9036, Olympia, Washington 98504.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-190, filed 8/1/79.]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-220  Filing of refund claim. A claim may be filed monthly, quarterly, annually or for any period of time within thirteen months from the date of purchase or from the last day of the month following the close of the monthly period for which the refundable amount is due. For purposes of this section, the postmark date shall be accepted as the date the claim was filed.

Claims shall be accompanied by invoices issued to the claimant by the seller of the fuel. If your refund claim is one hundred dollars or less, you do not have to send your purchase invoices with your refund claim. The department may require you to submit copies of your purchase invoices to establish the validity of your refund claim. Claims of individuals or proprietors shall be signed by the claimant. A partnership claim must be signed by any one of the partners. Claims of business firms or corporations shall be signed by an authorized agent. Accountants and other persons assisting in preparation of claims must also sign in the space provided on the form. A claim should be filed in the same name as that shown on invoices. If it is desired to have a claim paid in a name differing from that shown on the purchase invoice, a letter of authorization shall be attached signed by the person to whom the invoice was issued.

The use tax imposed by chapter 82.12 RCW is to be deducted from the amount of refund claimed. The claimant may calculate the tax ((himself)) or it will be computed by the department.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-220, filed 8/1/79; Order 114 MV, § 308-77-220, filed 11/26/71.]

NEW SECTION

WAC 308-77-225  Interest assessment on refund claims. Within thirty business days after receipt of a special fuel tax refund claim, the department must issue the refund. If the department does not issue the refund within thirty business days, interest is due. The first day of the thirty-day period begins on the date the properly filed and completed refund claim is received by the department. The postmark date on the envelope is not considered the received date for this purpose.

[]

AMENDATORY SECTION (Amending Order 548 DOL, filed 8/1/79)

WAC 308-77-230  Invoice requirements for refund purposes. (1) The seller of special fuel is required to issue to each purchaser who claims to be entitled to a refund a separate original or electronic invoice for each purchase of fuel. A single ((original)) invoice covering multiple deliveries made during a period of time not to exceed one calendar month may constitute a separate invoice as provided in WAC 308-77-160. Each delivery is to be individually listed on the ((original)) invoice or on an accompanying statement in accordance with the requirements of the rule for single deliveries. If the multiple delivery invoice includes deliveries on which refund of the tax is not claimed and deliveries on which refund is claimed, the ((original)) invoice shall contain or be accompanied by a statement showing separately the deliveries and gallons on which a refund of the tax is claimed and is not claimed. You may submit copies in lieu of the original invoice in support of a claim for refund. If an electronic invoice is issued, then a paper copy of the invoice must be produced if required by the department.

(2) Each ((original)) invoice in support of a claim for refund must show:

(a) Name and address of the seller,

(b) Purchaser's name (invoices showing "cash," "equipment name or number," "boat number," etc. will not qualify),

(c) Complete date of sale (month, day and year),

(d) Kind of fuel delivered,

(e) Number of gallons delivered,

(f) Price per gallon,

(g) Total amount of sale,

(h) Amount of special fuel tax paid. The amount of the tax paid need not be separately stated if the invoice bears the notation that the price includes the tax.

(3) Invoices with alterations, corrections or erasures affecting gallonage, place, date or separately stated tax shall be void and will not be accepted. A claimant who submits an invoice that has been altered that may give the claimant an illegal gain may have the entire claim invalidated and the department may suspend any further claims for refund for a period of one year.

(4) A "corrected invoice" used to support a claim must be accompanied by the ((original)) invoice received at time of purchase.

(5) If an ((original)) invoice is lost or destroyed, the ((dealer)) seller may issue a copy or duplicate ((copy)) entering thereon the invoice number, date of sale, gallons, price and amount and any other essential information that appeared on the initial invoice. The copy or duplicate shall be certified by the seller as being true and correct according to ((his)) the seller's records and shall be plainly marked "copy" or "duplicate." The claimant may then submit the certified copy to the department for validation.

(6) Only one invoice shall be issued for any one delivery.

[Statutory Authority: RCW 82.38.260. 79-08-140 (Order 548 DOL), § 308-77-230, filed 8/1/79; Order 114 MV, § 308-77-230, filed 11/26/71.]

AMENDATORY SECTION (Amending WSR 94-11-029, filed 5/9/94, effective 6/9/94)

WAC 308-77-250  Power take-off use. (1) Tax refund may be claimed for special fuel purchased inclusive of tax which is used in a motor vehicle equipped with a power take-off unit to operate auxiliary equipment provided the fuel used for the power take-off operation is supplied from a tank which is not connected with a tank supplying fuel to propel the vehicle on the highway, or the fuel used to operate auxiliary equipment by the power take-off is accurately measured by metering device that has been specifically approved by the department, and in certain motor vehicles, when established by the following formula:

(a) For special fuel used in pumping propane, fuel or heating oils, or milk picked up from a farm or dairy storage tank by a power take-off unit on a delivery truck, at the rate of three-fourths of one gallon for each one thousand gallons of fuel delivered or milk picked up. ((Pumping of gasoline, or other refined petroleum products or any other product, is a taxable use and does not qualify for a refund.)) Propane and fuel oil delivery truck operators must maintain records which show the total gallons of propane, or fuel or heating oils pumped by each vehicle for which refund or credit is claimed together with supporting meter readings.

(b) For special fuel used in operating a power take-off unit on a cement mixer truck or a load compactor on a garbage truck at the rate of twenty-five percent of the total gallons of fuel used in each truck. Garbage trucks with power take-off units which operate a dump box, hoist or other type of lift do not qualify for a refund. Cement mixer truck and garbage truck operators must maintain records which show the total gallons of fuel used and the total miles traveled for each vehicle.

(c) For special fuel used in operating a power take-off unit when direct measurement is not feasible on the following vehicles at the rates specified as a percentage of the total taxable fuel used by the vehicles:

If any special fuel user can provide satisfactory documentation and records to show that the fuel consumed by the power take-off is greater than the percentages indicated, the department may grant the higher percentage on a case-by-case basis.

(2) Deduction may be claimed on the user's tax report for the gallons of special fuel exempt from tax as provided in subsections (1)(a), (b) and (c) of this section.

(3) All claims in excess of one hundred dollars must be accompanied by purchase invoices to cover the total gallons of special fuel purchased, except that invoices for special fuel used in propane or fuel oil delivery trucks or when measured by a metering device need only be equal to or greater than the gallons claimed as refundable. The department may require you to submit copies of your purchase invoices to establish the validity of your refund claim.

(4) A schedule of vehicle operations shall support each claim for refund.

[Statutory Authority: RCW 82.37.170. 94-11-029, § 308-77-250, filed 5/9/94, effective 6/9/94. Statutory Authority: RCW 82.38.260. 91-03-017, § 308-77-250, filed 1/7/91, effective 2/7/91; 79-08-140 (Order 548 DOL), § 308-77-250, filed 8/1/79; Order MV 137, § 308-77-250, filed 6/1/72; Order 114 MV, § 308-77-250, filed 11/26/71.]

AMENDATORY SECTION (Amending Order 114 MV, filed 11/26/71)

WAC 308-77-260  Auxiliary engines. Tax refund may be claimed for special fuel purchased inclusive of tax which is used in auxiliary engines mounted on a licensed motor vehicle (ready-mix concrete, refrigeration or air conditioning units, etc.) if the fuel for the auxiliary engine is supplied from a fuel tank other than a fuel tank which supplies the engine propelling the vehicle or is accurately measured by a metering device that has been specifically approved by the department. Estimates for refundable use will not qualify for refund when separate tanks are used. Claimant shall maintain a detailed record of the gallons of fuel used. Invoices covering the total gallons of fuel used in both taxable and nontaxable tanks must accompany the claim if the claim amount is greater than one hundred dollars. The department may require you to submit copies of your invoices to establish the validity of your refund claim.

[Order 114 MV, § 308-77-260, filed 11/26/71.]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 308-77-032 Special fuel dealer's license.

WAC 308-77-034 Special fuel user's license.

WAC 308-77-042 Special fuel user bond.

WAC 308-77-044 Bonding requirements.

WAC 308-77-060 Special fuel dealers' liability for the tax.

WAC 308-77-070 Exemptions.

WAC 308-77-100 Credit for bad debt losses of special fuel dealers.

WAC 308-77-120 Tax reports.

WAC 308-77-125 Tax rate change.

WAC 308-77-130 Ten day reports and payments by special fuel dealer.