Date of Adoption: September 18, 1999.

Purpose: Meet criteria supporting Governor Locke's Executive Order 97-02.

Citation of Existing Rules Affected by this Order: Amending WAC 308-78-020 Bond requirements and collection, 308-78-030 Required reports, 308-78-040 Tax exempt transactions and invoice requirements, 308-78-045 Tax exempt use, 308-78-050 Supporting documents for tax exempt transactions, 308-78-060 Tax exempt losses, 308-78-070 Records, 308-78-080 Refunds, and 308-78-090 Mitigation of penalties and/or interest.

Statutory Authority for Adoption: RCW 88.42.040.

Adopted under notice filed as WSR 99-15-096 on July 21, 1999.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 9, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 9, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0. Effective Date of Rule: Thirty-one days after filing.

September 20, 1999

Fred Stephens

Director

OTS-3282.1

AMENDATORY SECTION(Amending Order MV 696, filed 10/6/82)

WAC 308-78-020
((License and)) Bond requirements and collection.

(1) ((Every distributor shall be licensed and bonded as is provided in chapter 82.36 RCW.

(2) Any person, other than a distributor, whose major use of aircraft fuel is for a tax exempt use specified in RCW 82.42.020 or 82.42.030, may be issued an aircraft fuel user license as authority to purchase the fuel without payment of the tax imposed by RCW 82.42.020 at time of purchase.  Verification by the aeronautics division of the Washington department of transportation of the tax exempt usage will be required.)) As an aircraft fuel tax distributor must I be bonded in order to receive a license? Yes, every aircraft fuel tax distributor must be licensed and bonded as is provided in chapter 82.36 RCW.

(2) Can the department collect on bonds for unpaid aircraft fuel taxes? Yes, the department may execute bonds on file under the provisions of chapter 82.36 RCW for unpaid taxes owing under chapter 82.42 RCW.

[Statutory Authority: RCW 82.42.040.  82-20-093 (Order MV 696), § 308-78-020, filed 10/6/82; Order 69-10-2, § 308-78-020, filed 10/29/69; Rule A, filed 9/12/67; Emergency Rule A, filed 7/21/67.]

(1) ((Every licensed distributor and user of aircraft fuel shall submit to the department of licensing, on or before the 25th day of each month, on forms furnished by the department:

(a) A signed statement showing the total number of gallons of aircraft fuel acquired, sold, delivered, and used during the preceding calendar month;

(b) A report of the number of gallons of aircraft fuel resulting in an increase or decrease of stock in bulk and/or mobile storage facilities;

(c) Such other data as necessary to support the various entries on the reports.  The format of the Uniform Motor Fuel Tax Multiple Schedules shall be used for the supporting data unless a different format is specifically required by the department.

(2) A report shall be rendered each month regardless of whether fuel has been received or dispensed during the immediately preceding calendar month.  The department may permit a user whose sole use of aircraft fuel is for tax exempt purposes to submit one annual report in lieu of monthly reports.

(3) Reports required by subsection (1) of this section may be submitted on computer-generated forms in lieu of the forms furnished by the department provided that the format is identical to the report forms preprinted by the department.)) What reports are required by the department for aircraft fuel tax and when are they due? Every licensed distributor of aircraft fuel shall submit signed tax returns and schedules to the department of licensing, on or before the 25th day of each month, or as required by the department. Forms shall be furnished or approved by the department.

(2) Is a report due if I have no activity for the month? Yes, a report shall be filed with the department for each calendar month even when no aircraft fuel was sold or used.

(3) Can tax return information be made available to other government agencies? Yes, the department routinely furnishes copies of schedules to government agencies or foreign jurisdictions.

[Statutory Authority: RCW 82.42.040.  90-13-039 (Order PFT 90-05), § 308-78-030, filed 6/14/90, effective 7/15/90; 82-20-093 (Order MV 696), § 308-78-030, filed 10/6/82; Order 69-10-2, § 308-78-030, filed 10/29/69; Rule B, filed 9/12/67; Emergency Rule B, filed 7/21/67.]

(((See WAC 308-78-080--Refunds) A distributor may sell aircraft fuel without collecting aircraft fuel tax when delivery is made by the distributor:

(1) To a buyer at a point outside the state; or

(2) To a common or contract carrier under a bill of lading naming the distributor as consignor to the buyer outside the state; or

(3) To United States or foreign government agencies; or

(4) To aircraft fuel users licensed by the department; or

(5) Directly into the aircraft fuel tanks of equipment operated by air carriers, supplemental air carriers, and foreign flag carriers operating under part 121 of the Federal Aviation Regulations, and local service commuters; or

(6) To another licensed distributor; or

(7) To a person who purchases and exports the fuel under the provisions of RCW 82.42.030.  The fuel is considered sold for export under the provisions of RCW 82.42.030 if the fuel is delivered in the state 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 distributor must issue to the purchaser an invoice which shall contain at least the following details:

(a) Name and address of seller;

(b) Name and address of 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, in words, if different from shipping point;

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

(g) State or foreign jurisdiction of destination;

(h) Name of product sold;

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

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

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

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 82.42.040 and WAC 307-78-070.

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.)) (1) When may a licensed distributor sell aircraft fuel without collecting the aircraft fuel tax? A licensed distributor may sell aircraft fuel without collecting the aircraft fuel tax, when delivery is made by the distributor to one of the following:

(a) A destination outside the state;

(b) United States or foreign government agencies;

(c) Directly into the aircraft fuel tanks of equipment operated by air carriers, supplemental air carriers, and foreign flag carriers operating under part 121 of the Federal Aviation Regulations, and local service commuters;

(d) Another licensed distributor; or

(e) To a purchaser who delivers the fuel for export purposes (fuel must be unloaded at a location outside the state) under RCW 82.42.030 in the state into:

(i) Purchaser's transportation equipment; and/or

(ii) A common/contract carrier employed by the purchaser at a location outside the state.

(2) What invoices are required and how are they distributed? An original invoice must be furnished to the purchaser; the selling distributor as required by RCW 82.42.040 and WAC 308-78-070 must keep a copy of the invoice.

(3) What information must an invoice include? The selling distributor must issue to the purchaser an invoice, which shall contain at least the following:

(a) Name and address of seller;

(b) Name and address of 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, in words, if different from shipping point;

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

(g) State or foreign jurisdiction of destination;

(h) Name of product sold;

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

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

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

[Statutory Authority: RCW 82.42.040.  90-13-039 (Order PFT 90-05), § 308-78-040, filed 6/14/90, effective 7/15/90; 85-04-027 (Order PFT 85-001), § 308-78-040, filed 1/31/85; 82-20-093 (Order MV 696), § 308-78-040, filed 10/6/82; Order 69-10-2, § 308-78-040, filed 10/29/69; Rule C, filed 9/12/67; Emergency Rule C, filed 7/21/67.]

What are the conditions under which I can claim an exemption of aircraft fuel tax? Exemption from the aircraft fuel tax may be claimed for the uses specified in RCW 82.42.020 and 82.42.030 subject to the following conditions:

(1) Operation of aircraft by air carriers, supplemental air carriers, and foreign flag carriers, operating under part 121 of the Federal Aviation Regulations, and local service commuters.

(2) ((Exemption from the aircraft fuel tax)) For testing and experimental purposes ((shall be granted only to persons primarily engaged)) in the manufacture or remanufacture of aircraft and ((only)) for flight operations of ((an)) experimental ((aircraft or an aircraft being tested)) testing following manufacture ((or)), repair prior to delivery to a customer((.  Fuel used in the operation of an aircraft which is necessary to the conduct of a test)) or experimental ((flight)) testing of another aircraft ((is also tax exempt)).

(3) ((Aircraft fuel used in connection with)) For aircraft crew training ((shall be exempt from the aircraft fuel tax when: (a) The personnel receiving training are the crews of a)) in Washington state for certified air carriers((; (b) the aircraft used for training purposes may appropriately be used to train crews to operate the type of aircraft purchased by the air carrier; (c) the crew training occurs in Washington state; and (d) the primary purpose of the flight is for crew training and not for an otherwise taxable purpose)).

(4) ((Exemption from the aircraft fuel tax for application of)) When applying pesticides, herbicides or other agricultural chemicals ((will be allowed only for fuel consumed while the chemicals are being applied and for flight operations attendant thereto)) and for flight operations as defined in RCW 82.42.020.

[Statutory Authority: RCW 82.42.040.  85-04-027 (Order PFT 85-001), § 308-78-045, filed 1/31/85; 82-20-093 (Order MV 696), § 308-78-045, filed 10/6/82.]

What types of supporting documents must be retained for tax exempt transactions? The distributor shall retain sales invoices, contracts, purchase orders, bills of lading and other documents in support of the tax exemption claimed.  ((Records must be kept in original form for three years.))

[Statutory Authority: RCW 82.42.040.  85-04-027 (Order PFT 85-001), § 308-78-050, filed 1/31/85; 82-20-093 (Order MV 696), § 308-78-050, filed 10/6/82; Order 69-10-2, § 308-78-050, filed 10/29/69; Rule D, filed 9/12/67; Emergency Rule D, filed 7/21/67.]

((Exemption from the aircraft fuel tax shall be allowed a licensed distributor or user for fuel lost or destroyed through fire, lightning, flood, wind storm, explosion, accident, or other casualty, or verified leakage of five hundred gallons or more.  Proof of loss must be submitted consisting of documentation substantiating the circumstances surrounding the loss, ownership of the fuel, the exact quantity of the loss, and other documents required by the department to establish the validity of the claim.  Exemption from the tax will not be allowed on losses claimed from evaporation, shrinkage, or unknown causes.)) (1) If aircraft fuel is destroyed can I still claim an exemption? You may claim an exemption if fuel is destroyed through fire, lightning, flood, wind storm, explosion, accident, or other casualty.

(2) May I claim an exemption for losses due to leakage? Yes, if verified leakage is five hundred gallons or more.

(3) What supporting documents are needed for this aircraft fuel tax exempt loss? Losses of aircraft fuel must be substantiated by submitting documentation identifying the circumstances surrounding the loss, ownership of the fuel, the exact quantity of the loss, and other documents required by the department to establish the validity of the claim.

(4) May I claim an exemption for losses of aircraft fuel due to evaporation, shrinkage or unknown causes? No, aircraft fuel losses due to evaporation, shrinkage or unknown causes will not be permitted.

[Statutory Authority: RCW 82.42.040.  82-20-093 (Order MV 696), § 308-78-060, filed 10/6/82; Order 69-10-2, § 308-78-060, filed 10/29/69; Rule E, filed 9/12/67; Emergency Rule E, filed 7/21/67.]

(1) ((Stock records.  Every distributor and user shall maintain a complete stock summary of the gallons of aircraft fuel handled each month which reflects inventories, receipts, sales, use, transfers, loss or gain, and other distribution.  The stock summary shall be supported by:

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

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

(c) A record of fuel disbursements supported by sales invoices and other documents relative to the disbursements of fuel.

(2) Invoices.  An original invoice shall be issued at the time of each sale, or delivery, and shall show:

(a) The name of the distributor;

(b) The date of delivery;

(c) The name and address of the purchaser (address not required on credit card deliveries);

(d) The location of the storage facility from which the fuel was withdrawn;

(e) The type or grade of fuel;

(f) The number of gallons sold or delivered;

(g) The price per gallon and the total amount charged;

(h) The statement: "Ex Washington Aircraft Fuel Tax" for tax exempt sales.  The distributor or user license number must be shown for all deliveries other than those made directly into the aircraft fuel tanks of unlicensed exempt carriers.

(3) Own use.  Every distributor and user shall maintain a withdrawal record covering their own total usage during the month.  The withdrawal record shall contain the date of withdrawal, the location of the storage facility from which the fuel was withdrawn, the type or grade of fuel, and the number of gallons withdrawn.

(4) Each person claiming an exemption from the aircraft fuel tax shall keep records in a form convenient to the operator, of each flight or series of flights for which tax exempt use is claimed.  Such records shall include:

(a) Flight or block time of each flight or series of flights;

(b) Type of aircraft;

(c) Purpose of each flight or series of flights;

(d) Dates;

(e) Gallons consumed for each flight or series of flights.

(5) Maintenance and audit of records.  Every distributor and user shall maintain and keep for a period of not less than three years in their original form such records as the department may require.  The department may make such examinations of the records, stocks, facilities, equipment, and aircraft of distributors and users as necessary in carrying out the provisions of chapter 10, Laws of 1967 ex. sess., as amended.  If such examination or investigations disclose that any reports filed with the department have shown incorrectly the gallonage of aircraft fuel or the tax accruing thereon, the department may make such changes in subsequent reports and payments as necessary to correct the errors disclosed.)) What records must a distributor, certified user, or consumer of aircraft fuel maintain? The following records must be maintained:

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

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

(c) A record of fuel disbursements supported by sales invoices and other documents relative to the disbursements of fuel;

(d) An original invoice shall be issued at the time of each sale, or delivery, and shall show:

(i) The name of the distributor;

(ii) The date of delivery;

(iii) The name and address of the purchaser (address not required on credit card deliveries);

(iv) The location of the storage facility from which the fuel was withdrawn;

(v) The type or grade of fuel;

(vi) The number of gallons sold or delivered;

(vii) The price per gallon and the total amount charged;

(viii) The statement: "Ex Washington Aircraft Fuel Tax" for tax exempt sales. The distributor or user license number must be shown for all deliveries other than those made directly into the aircraft fuel tanks of unlicensed exempt carriers;

(e) A withdrawal record covering their own total usage during the month. The withdrawal record shall contain the date of withdrawal, the location of the storage facility from which the fuel was withdrawn, the type or grade of fuel, and the number of gallons withdrawn;

(f) Each person claiming an exemption from the aircraft fuel tax shall keep records of each flight or series of flights for which tax exempt use is claimed. Such records shall include:

(i) Flight or block time of each flight or series of flights;

(ii) Type of aircraft;

(iii) Purpose of each flight or series of flights;

(iv) Dates;

(v) Gallons consumed for each flight or series of flights.

(2) How long must I retain my records? Records shall be maintained and kept for a period of not less than five years in their original form. The department may make such examinations of the records, facilities, equipment, and aircraft of distributors, certified users and consumers of aircraft fuel as necessary in carrying out the provisions of this chapter.

[Statutory Authority: RCW 82.42.040.  90-13-039 (Order PFT 90-05), § 308-78-070, filed 6/14/90, effective 7/15/90; 85-04-027 (Order PFT 85-001), § 308-78-070, filed 1/31/85; 82-20-093 (Order MV 696), § 308-78-070, filed 10/6/82; Order 69-10-2, § 308-78-070, filed 10/29/69; Rule F, filed 9/12/67; Emergency Rule F, filed 7/21/67.]

(1) ((Any person claiming a refund for aircraft fuel tax shall file a claim upon forms provided by the department in the same manner and under the same conditions as provided for refund of motor vehicle fuel in RCW 82.36.310.

(2) A refund of aircraft fuel tax, which has been collected, may be claimed on aircraft fuel which has been:

(a) Used for purposes exempted under RCW 82.42.020 or 82.42.030;

(b) Exported from this state for use outside this state under the same conditions as provided for refund of motor vehicle fuel in RCW 82.36.300.  Any aircraft fuel carried from this state in the fuel tank of an aircraft shall not be considered as exported from this state;

(c) Used in equipment, other than aircraft, not licensed to be operated over and along any public highway as provided for refund of motor vehicle fuel in RCW 82.36.280;

(d) Lost or destroyed under the same conditions as provided for tax exempt losses in WAC 308-78-060;

(e) Sold by a dealer who has paid the aircraft fuel tax, to the United States or foreign government agencies.  The dealer shall file an exemption certificate, which shall contain an assignment to the dealer of the purchaser's right to a refund, and each invoice covering such sale shall have the statement: "Ex Washington Aircraft Fuel Tax" clearly marked thereon.

(3) Claims for refund may be filed at any time but not later than thirteen months from the date of purchase of such aircraft fuel under the same conditions as provided for motor vehicle fuel in RCW 82.36.330.

(4) The department may examine the books and records of the claimant in order to establish the validity of any claim for refund under the same conditions as provided for motor vehicle fuel in RCW 82.36.340.)) What do I have to do to claim a refund for aircraft fuel? In order to claim a refund for aircraft fuel tax, you shall file a claim upon forms provided by the department in the same manner and under the same conditions as provided for refund of motor vehicle fuel in RCW 82.36.310.

(2) What is considered a tax exempt refund? A refund of aircraft fuel tax, which has been collected, may be claimed on aircraft fuel that has been:

(a) Used for purposes exempted under RCW 82.42.020, or 82.42.030 and WAC 308-78-040, 308-78-045 and 308-78-060;

(b) Exported from this state for use outside this state under the same conditions as provided for refund of motor vehicle fuel in RCW 82.36.300. Any aircraft fuel carried from this state in the fuel tank of an aircraft shall not be considered as exported from this state;

(c) Used in nonhighway equipment, other than aircraft, as provided for refund of motor vehicle fuel in RCW 82.36.280;

(d) Sold to United States or foreign government agencies by a dealer who has paid the aircraft fuel tax. The dealer shall file an exemption certificate provided by the department. This certificate shall contain an assignment to the dealer of the purchaser's right to a refund. Each invoice covering such sale shall clearly state the fuel has been sold without the aircraft fuel tax.

(3) Is there a time limit to claim an aircraft fuel tax refund? Yes, claims for refund may not be filed later than thirteen months from the date of purchase of such aircraft fuel under the same conditions as provided for motor vehicle fuel in RCW 82.36.330.

(4) Can the department verify the validity of refund claims? Yes, the department may examine the books and records of the claimant in order to establish the validity of any claim for refund under the same conditions as provided for motor vehicle fuel in RCW 82.36.340.

[Statutory Authority: RCW 82.42.040.  85-04-027 (Order PFT 85-001), § 308-78-080, filed 1/31/85; 82-20-093 (Order MV 696), § 308-78-080, filed 10/6/82; Order 69-10-2, § 308-78-080, filed 10/29/69; Rule G, filed 9/12/67; Emergency Rule G, filed 7/21/67.]

((The department, in its discretion, may mitigate, extinguish or adjust penalties and interest arising from late or missing fuel tax returns, unpaid or underpaid taxes, lack of complete records to support reported fuel usage, or license revocation penalties, when reasonable cause is shown by the taxpayer or as indicated from the records on file with the department that failure to comply with the requirements of this chapter was not intentional or unreasonable.

The department, after review of records furnished and/or tax returns available, may take into consideration a taxpayer's history of underpayments and overpayments, late payment(s), late filing of tax returns, or incomplete records in arriving at its decision to mitigate.

Taxpayers who fail to pay assessed taxes on a timely basis may have late payment penalties and interest mitigated if the individual, partnership or corporation is able to establish that failure to take such payment action within a 30 day period after service of an assessment was based upon an internal business or employee oversight, or other unavoidable reasonable circumstance.)) (1) Under what circumstances may a penalty and/or interest be waived? The department, in its discretion, may mitigate, extinguish or adjust penalties and/or interest arising from late or missing fuel tax returns, unpaid or underpaid taxes, lack of complete records to support reported fuel usage, or license revocation penalties, when reasonable cause is shown by the taxpayer or as indicated from the records on file with the department that failure to comply with the requirements of this chapter was not intentional or unreasonable.

(2) How will the department determine whether penalties and/or interest will be mitigated? The department, in its discretion, and after review of records furnished and/or tax returns available, may take into consideration a taxpayer's history of underpayments and overpayments, late payment(s), late filing of tax returns, or incomplete records in arriving at its decision to mitigate.

(3) What happens if I do not pay my tax assessment on time? You will be assessed additional penalties and/or interest.

(4) Under what circumstances may assessed late payment penalties and/or interest be mitigated? The department, in its discretion, may mitigate late payment penalties and/or interest if the taxpayer provides reasonable cause for failure to make payment within a thirty-day period after service of an assessment.

[Statutory Authority: RCW 82.42.040 and 82.42.100.  92-01-015, § 308-78-090, filed 12/6/91, effective 1/6/92.]

© Washington State Code Reviser's Office