SENATE BILL 5475
State of Washington 57th Legislature 2001 Regular Session
By Senators B. Sheldon, West, Sheahan and McCaslin
Read first time 01/24/2001. Referred to Committee on Ways & Means.
AN ACT Relating to the business and occupation taxation of sales of new and used motor vehicles; adding new sections to chapter 82.04 RCW; adding a new section to chapter 82.08 RCW; creating a new section; prescribing penalties; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The legislature recognizes that dealers located outside Washington sell motor vehicles to Washington customers and use in-state dealers to facilitate the sales by preparing the vehicles for delivery and delivering them to the buyers in this state. The legislature further recognizes that when a selling dealer has a physical presence or "nexus" in this state it requires payment of the tax imposed by chapter 82.04 RCW. Selling dealers have nexus in Washington when the vehicles are located in this state at the time of the sale and are received by the customer or the customer's agent in this state. The legislature further finds that businesses with nexus are entitled to an easy, simple, and efficient method to account for and pay the tax imposed by chapter 82.04 RCW on these sales.
NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to read as follows:
The definitions in this section apply to sections 3 and 4 of this act.
(1) "Used vehicle" or "used motor vehicles" has the meaning ascribed in RCW 46.04.660.
(2) "New vehicle" or "new motor vehicle" has the meaning ascribed in RCW 46.70.011(19).
(3) "Courtesy dealer" means any licensed motor vehicle dealer authorized to prepare or deliver a new motor vehicle to a customer in this state.
(4) "Department" means the department of revenue.
NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:
(1) This chapter does not apply to amounts derived from wholesale sales of used motor vehicles.
(2) This chapter does not apply to the amount derived from a retail sale of a used vehicle that is purchased by the lessee of the vehicle at the conclusion of the lease agreement under an option to purchase provision in that agreement.
(3) This chapter does not apply to amounts derived by a new car dealer from wholesale sales of new motor vehicles of the same make to other new car dealers where the sales enable the dealers to adjust their inventory levels as long as the amount paid by the purchasing dealer does not exceed the amount paid by the selling dealer in the acquisition of the vehicle, however, the selling dealer may add reasonable expenses for the preparation of the vehicle for sale or transfer.
NEW SECTION. Sec. 4. A new section is added to chapter 82.04 RCW to read as follows:
(1) In the payment of the tax imposed by this chapter on new motor vehicles sold to Washington customers that are delivered to the customer through courtesy dealers located in this state, the selling dealer may designate the courtesy dealer as the agent for the selling dealer in reporting and paying the tax imposed by this chapter. Upon this designation, it is the duty of each courtesy dealer to pay the tax imposed by this chapter to the department when the courtesy dealer files its tax return, except where the selling dealer advises the courtesy dealer in writing that it will pay the tax directly to the department. Each courtesy dealer who acts as the agent for the selling dealer in reporting, paying, and remitting the tax imposed by this chapter must at the time of paying and remitting its own taxes imposed by this chapter pay the tax due on the transaction under this section. The courtesy dealer is authorized to withhold payment to the selling dealer out of the proceeds of the sale an amount equal to the tax imposed by this chapter. Amounts withheld by the courtesy dealer are deemed to be held in trust by the courtesy dealer until paid to the department, and any courtesy dealer who appropriates or converts the amount withheld to the courtesy dealer's own use or to any use other than the payment of the tax to the extent that the money withheld is not available for payment on the due date is guilty of a gross misdemeanor. Any selling dealer who fails to designate a courtesy dealer as its agent for payment of the tax imposed by this chapter must register with the department and report and pay tax in the same manner as other registered businesses. Selling dealers who designate courtesy dealers as their agents for payment of the tax imposed by this chapter and whose only taxable activity in Washington is selling through designated courtesy dealers are relieved of the duty to register with the department.
(2) This section is construed as cumulative of other methods prescribed in chapter 82.04 through 82.32 RCW, inclusive, for the collection of the tax imposed by this chapter. The department has power to adopt rules necessary to administer this section.
NEW SECTION. Sec. 5. A new section is added to chapter 82.08 RCW to read as follows:
Every courtesy dealer, as defined in section 2 of this act, under section 4 of this act is deemed the seller within the meaning of this chapter and subject to all its provisions with respect to those sales made by selling dealers for which the courtesy dealer reports and pays the tax imposed by chapter 82.04 RCW. Every courtesy dealer must collect and remit the amount of tax due under this chapter with respect to those sales made by selling dealers for which the courtesy dealer reports and pays the tax imposed by chapter 82.04 RCW.
NEW SECTION. Sec. 6. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2001.
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