Title of Rule and Other Identifying Information: WAC 458-20-127 Magazines and periodicals, explains the B&O, retail
sales, and use tax reporting responsibilities of persons that
purchase and resell magazines and periodicals.
THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THIS USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Richard Cason, Department of Revenue, P.O. Box 47453, Olympia, WA 98504-7453, e-mail RichardC@dor.wa.gov , AND RECEIVED BY October 4, 2010.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is proposing to amend WAC 458-20-127 to reflect the following recent legislation:
• ESHB 2075 (chapter 535, Laws of 2009) - explains the application of retail sales tax and use tax for magazines and periodicals that are transferred to the buyer electronically; and
• SB 6173 (chapter 563, Laws of 2009) - replaces resale certificates with reseller permits as the means to substantiate wholesale purchases.
The department also proposes to recognize RCW 82.08.02535, which provides a retail sales tax exemption for magazine or periodical sales for certain fundraising purposes. Editing changes are also proposed for readability purposes.
Copies of draft rules are available for viewing and printing on our web site at http://dor.wa.gov/content/FindALawOrRule/RuleMaking/agenda.aspx.
Reasons Supporting Proposal: To recognize an exemption and recent legislative changes that are not currently addressed in this rule.
Statutory Authority for Adoption: RCW 82.32.300 and 82.01.060(2).
Statute Being Implemented: RCW 82.04.050 as it applies to magazines sales of magazines and periodicals.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of revenue, governmental.
Name of Agency Personnel Responsible for Drafting: Richard Cason, 1025 Union Avenue S.E., Suite #544, Olympia, WA, (360) 664-0331; Implementation: Alan R. Lynn, 1025 Union Avenue S.E., Suite #544, Olympia, WA, (360) 570-6125; and Enforcement: Gilbert Brewer, 1025 Union Avenue S.E., Suite #544, Olympia, WA, (360) 570-6147.
August 4, 2010
Alan R. Lynn
AMENDATORY SECTION(Amending WSR 89-21-001, filed 10/5/89, effective 11/5/89)
WAC 458-20-127 Sales of newspapers, magazines and periodicals. (1) ((
Retail sales tax.)) Introduction. This
section explains the application of the business and
occupation (B&O) tax, retail sales tax, and use tax to sales
and/or use of newspapers, magazines, and periodicals. The tax
reporting information in the section is limited to persons
that purchase and resell these publications. The department
of revenue (department) has adopted other sections providing
tax reporting information to persons printing and/or
publishing these publications and other printed materials.
• Persons printing and/or publishing newspapers, magazines, and periodicals should also refer to WAC 458-20-143.
• For information regarding the printing industry in general, see WAC 458-20-144.
• Persons duplicating printed materials for others should also refer to WAC 458-20-141.
• For information regarding potential litter tax liability, see WAC 458-20-243.
(2) General tax application. This subsection explains the B&O tax and retail sales tax responsibilities of persons selling newspapers, magazines, and periodicals to consumers, when the seller is not also the printer or publisher of the publication. Refer to subsection (4) of this section for information about tax reporting responsibilities of persons selling through organizers, captains, or others selling from house to house.
Where subscriptions or renewals of subscriptions are mailed directly by purchasers to publishers outside the state, the guidelines contained in WAC 458-20-193 and 458-20-221 apply to the obligation of sellers to collect retail sales or use tax.
(a) Sales of printed magazines and periodicals. Sales of
magazines and periodicals to ((
the reading public)) consumers
by persons operating (( news stands)) newsstands, book stores,
(( cigar)) department stores, drug stores and the like are
sales at retail and are subject to the retailing B&O tax and
retail sales tax. (( Sales to newsstands or stores which are
sales for resale are not subject to the retail sales tax.))
Refer to WAC 458-20-143 for the definition of "periodical or
(b) Magazines and periodicals sold as digital products. Sales of magazines and periodicals that are transferred electronically to the end user are subject to the retailing B&O tax and retail sales tax regardless of how they are accessed. For more information on the application of tax on digital products, refer to RCW 82.04.050, 82.04.192, and 82.04.257.
(c) Sales of newspapers. Sales of printed newspapers to consumers by persons operating newsstands, book stores, department stores, drug stores and the like are sales at retail and are subject to the retailing B&O tax. Sales of newspapers are specifically exempt from the retail sales tax per RCW 82.08.0253. Refer to WAC 458-20-143 for the definition of "newspaper."
(3) Retail sales tax exemptions. The retail sales tax does not apply to the following:
(a) Newspapers (refer to WAC 458-20-143 for a definition of "newspaper"); and
(b) Subscription sales of magazines and periodicals, including those transferred electronically to the buyer, if these sales are for the purpose of fund-raising by:
• Educational institutions as defined in RCW 82.04.170; or
• Nonprofit organizations engaged in activities primarily for the benefit of boys and girls nineteen years of age and younger. (RCW 82.08.02535.)
(4) Sales by distributors. When magazines or periodicals
are distributed to the final purchaser by a news company or
distributor who effects such distribution through organizers,
captains, or others selling from house to house or upon the
streets, the news company or distributor is ((
responsible for the collection and payment of the retail sales
(a) Such news companies or distributors ((
collect from those selling the magazines or periodicals the
retail sales tax upon the gross retail selling price of all
magazines and periodicals taken by such persons.
Registration certificates)) (b) Tax registration
endorsements are not required for organizers, captains, or
other persons selling magazines or other periodicals (( under
such circumstances)) if they meet the conditions of WAC 458-20-101 (2)(a). (( Branch certificates)) Separate
registration and license documents will be issued to the news
company or magazine distributor for each of the local stations
operated by such company. Such registration and license
documents will reflect the same tax reporting account number
as the news company or magazine distributor. For more
information, refer to WAC 458-20-101(10).
(2) Where subscriptions or renewals of subscriptions
are mailed directly by purchasers to publishers outside the
state, the guidelines contained in WAC 458-20-193B and
458-20-221 apply to the obligation of publishers to collect
sales or use tax.
This rule does not apply to the sale of newspapers. The law expressly exempts the sale of newspapers from the retail sales tax. (RCW 82.08.0253.) See WAC 458-20-143 for the definition of "newspaper."
(3) Use tax.)) (5) Buyer's responsibility to remit
deferred sales or use tax. Where no retail sales tax is paid
upon the purchase of, or subscription to, a magazine or
periodical, the ((
use tax is subsequently payable upon the use
of the magazine or periodical in this state by the purchaser))
buyer or subscriber must remit the retail sales tax (commonly
referred to as "deferred sales tax") or use tax directly to
the department unless specifically exempt by law.
Deferred sales or use tax should be reported on the use tax line of the buyer's excise tax return. For detailed information about use tax, refer to WAC 458-20-178 (Use tax).
[Statutory Authority: RCW 82.32.300. 89-21-001, § 458-20-127, filed 10/5/89, effective 11/5/89; 83-07-034 (Order ET 83-17), § 458-20-127, filed 3/15/83; Order ET 70-3, § 458-20-127 (Rule 127), filed 5/29/70, effective 7/1/70.]