WSR 02-11-148

PREPROPOSAL STATEMENT OF INQUIRY

DEPARTMENT OF REVENUE


[ Filed May 22, 2002, 11:24 a.m. ]

Subject of Possible Rule Making: WAC 458-20-135 Extracting natural products.

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: This rule explains the application of the business and occupation (B&O), retail sales, and use taxes to persons extracting natural products. Persons extracting natural products often use the same extracted products in a manufacturing process. The rule provides guidance for determining when an extracting activity ends and the manufacturing activity begins.

The department is considering a revision to this rule to incorporate provisions of chapter 118, Laws of 2001, which in part changed the definition of "extractor" to specifically recognize and exclude "farmers" as defined in RCW 82.04.213. The department is also considering restructuring the information provided in subsection (2)(b)(ii), which provides guidance as to when an extracting activity ends and manufacturing begins for commercial fishing, and adding an example to subsection (3), which explains the tax-reporting responsibilities for income received by extractors.

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, e-mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary discussion draft of a possible new or revised rule(s) is available upon request. Written comments on and/or requests for copies of the draft may be directed to Pat Moses, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6117, e-mail PatM@dor.wa.gov, fax (360) 664-0693.

Date and Location of Public Meeting: Capital Plaza Building, 4th Floor Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on June 5, 2002, at 9:30 a.m.

Assistant 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 22, 2002

Alan R. Lynn, Rules Coordinator

Legislation and Policy Division

Washington State Code Reviser's Office