WSR 02-11-123

PREPROPOSAL STATEMENT OF INQUIRY

DEPARTMENT OF REVENUE


[ Filed May 21, 2002, 11:16 a.m. ]

Subject of Possible Rule Making: Amending WAC 458-20-209 Farming for hire and horticultural services ((performed for)) provided to farmers and 458-20-210 Sales of tangible personal property for farming -- Sales of agricultural products by farmers; and repealing WAC 458-20-122 Sales of feed, seed, fertilizer, spray materials, and other tangible personal property for farm use.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: WAC 458-20-122 (Rule 122) explains the application of business and occupation (B&O) tax, retail sales, and use taxes to the sale and/or use of feed, seed, fertilizer, spray materials, and other tangible personal property for farm use. WAC 458-20-209 (Rule 209) explains the application of B&O, retail sales, and use taxes to persons engaging in the business of farming for hire and persons who provide horticultural services to farmers. WAC 458-20-210 (Rule 210) explains the B&O and retail sales tax applications to sales of agricultural products by farmers.

The information now provided in these rules will be revised to incorporate a number of recent legislative changes affecting farmers and persons making sales to farmers. These changes include those provided in chapter 118, Laws of 2001, regarding changes to the definitions of "farmer" and "agricultural product," and chapter 17, Laws of 2001 2nd sp.s., which provides retail sales and use tax exemptions for certain animal pharmaceuticals. The department plans to consolidate the information now provided in Rules 122 and 210 into a single rule (Rule 210) and, as a result, Rule 122 will be repealed. Consolidating these rules will provide the information to the public in a more efficient and user-friendly manner. The department also anticipates incorporating information currently contained in several Excise Tax Advisories into a revised Rule 210. As a result, those advisories will be cancelled.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

Process for Developing New Rule: Modified negotiated rule making.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary draft of the proposed changes is available upon request. Written comments on and/or requests for copies of the rule may be directed to Mark Mullin, Tax Policy Specialist, Legislation and Policy Division, State of Washington Department of Revenue, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6112, fax (360) 664-0693, e-mail MarkM@dor.wa.gov.

Location and Date of Public Meeting: Capital Plaza Building, 4th Floor Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on Tuesday, June 25, 2002, at 9:30.

Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985, or (360) 570-6175.

May 20, 2002

Alan R. Lynn, Rules Coordinator

Legislation and Policy Division

Washington State Code Reviser's Office