AN
ACT Relating to use taxation; amending RCW 82.04.060, 82.12.010, 82.12.020,
82.12.035, and 82.14.020; reenacting and amending RCW 82.04.190; providing an
effective date; and declaring an emergency.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
82.04.060 and 1998 c 332 s 5 are each amended to read as follows:
"Sale
at wholesale" or "wholesale sale" means: (1) Any sale of
tangible personal property((; (2))), any sale of services defined as
a retail sale in RCW 82.04.050(2)(a), any sale of amusement or recreation
services as defined in RCW 82.04.050(3)(a)((; (3))), any sale of
canned software((;)), or (((4))) any sale of telephone
service as defined in RCW 82.04.065, which is not a sale at retail; and
((means)) (2) any charge made for labor and services rendered for
persons who are not consumers, in respect to real or personal property, if such
charge is expressly defined as a retail sale by RCW 82.04.050 when rendered to
or for consumers: PROVIDED, That the term "real or personal
property" as used in this ((section)) subsection shall not
include any natural products named in RCW 82.04.100.
Sec.
2. RCW
82.04.190 and 1998 c 332 s 6 and 1998 c 308 s 2 are each reenacted and amended
to read as follows:
"Consumer"
means the following:
(1)
Any person who purchases, acquires, owns, holds, or uses any article of
tangible personal property irrespective of the nature of the person's business
and including, among others, without limiting the scope hereof, persons who
install, repair, clean, alter, improve, construct, or decorate real or personal
property of or for consumers other than for the purpose (a) of resale as
tangible personal property in the regular course of business or (b) of
incorporating such property as an ingredient or component of real or personal
property when installing, repairing, cleaning, altering, imprinting, improving,
constructing, or decorating such real or personal property of or for consumers
or (c) of consuming such property in producing for sale a new article of
tangible personal property or a new substance, of which such property becomes
an ingredient or component or as a chemical used in processing, when the
primary purpose of such chemical is to create a chemical reaction directly
through contact with an ingredient of a new article being produced for sale or
(d) purchases for the purpose of consuming the property purchased in producing
ferrosilicon which is subsequently used in producing magnesium for sale, if the
primary purpose of such property is to create a chemical reaction directly
through contact with an ingredient of ferrosilicon;
(2)(a)
Any person engaged in any business activity taxable under RCW 82.04.290; (b)
any person who purchases, acquires, or uses any telephone service as defined in
RCW 82.04.065, other than for resale in the regular course of business; (c) any
person who purchases, acquires, or uses any service defined in RCW
82.04.050(2)(a) or any amusement and recreation service defined in RCW
82.04.050(3)(a), other than for resale in the regular course of business; and
(d) any person who is an end user of software;
(3)
Any person engaged in the business of contracting for the building, repairing
or improving of any street, place, road, highway, easement, right of way, mass
public transportation terminal or parking facility, bridge, tunnel, or trestle
which is owned by a municipal corporation or political subdivision of the state
of Washington or by the United States and which is used or to be used primarily
for foot or vehicular traffic including mass transportation vehicles of any
kind as defined in RCW 82.04.280, in respect to tangible personal property when
such person incorporates such property as an ingredient or component of such
publicly owned street, place, road, highway, easement, right of way, mass
public transportation terminal or parking facility, bridge, tunnel, or trestle
by installing, placing or spreading the property in or upon the right of way of
such street, place, road, highway, easement, bridge, tunnel, or trestle or in
or upon the site of such mass public transportation terminal or parking
facility;
(4)
Any person who is an owner, lessee or has the right of possession to or an
easement in real property which is being constructed, repaired, decorated,
improved, or otherwise altered by a person engaged in business, excluding only
(a) municipal corporations or political subdivisions of the state in respect to
labor and services rendered to their real property which is used or held for
public road purposes, and (b) the United States, instrumentalities thereof, and
county and city housing authorities created pursuant to chapter 35.82 RCW in
respect to labor and services rendered to their real property. Nothing contained
in this or any other subsection of this definition shall be construed to modify
any other definition of "consumer";
(5)
Any person who is an owner, lessee, or has the right of possession to personal
property which is being constructed, repaired, improved, cleaned, imprinted, or
otherwise altered by a person engaged in business;
(6)
Any person engaged in the business of constructing, repairing, decorating, or
improving new or existing buildings or other structures under, upon, or above
real property of or for the United States, any instrumentality thereof, or a
county or city housing authority created pursuant to chapter 35.82 RCW,
including the installing or attaching of any article of tangible personal
property therein or thereto, whether or not such personal property becomes a
part of the realty by virtue of installation; also, any person engaged in the
business of clearing land and moving earth of or for the United States, any
instrumentality thereof, or a county or city housing authority created pursuant
to chapter 35.82 RCW. Any such person shall be a consumer within the meaning
of this subsection in respect to tangible personal property incorporated into,
installed in, or attached to such building or other structure by such person;
(7)
Any person who is a lessor of machinery and equipment, the rental of which is
exempt from the tax imposed by RCW 82.08.020 under RCW 82.08.02565, with
respect to the sale of or charge made for tangible personal property consumed
in respect to repairing the machinery and equipment, if the tangible personal
property has a useful life of less than one year. Nothing contained in this or
any other subsection of this section shall be construed to modify any other
definition of "consumer";
(8)
Any person engaged in the business of cleaning up for the United States, or its
instrumentalities, radioactive waste and other byproducts of weapons production
and nuclear research and development; and
(9)
Until July 1, 2003, any person engaged in the business of conducting
environmental remedial action as defined in RCW 82.04.2635(2).
Sec.
3. RCW
82.12.010 and 2001 c 188 s 3 are each amended to read as follows:
For
the purposes of this chapter:
(1)(a)
"Value of the article used" shall mean the consideration, whether
money, credit, rights, or other property except trade-in property of like kind,
expressed in terms of money, paid or given or contracted to be paid or given by
the purchaser to the seller for the article of tangible personal property, the
use of which is taxable under this chapter. The term includes the amount of
any freight, delivery, or other like transportation charge paid or given by the
purchaser to the seller with respect to the purchase of such article. The term
also includes, in addition to the consideration paid or given or contracted
to be paid or given, the amount of any tariff or duty paid with respect to the
importation of the article used. In case the article used is acquired by lease
or by gift or is extracted, produced, or manufactured by the person using the
same or is sold under conditions wherein the purchase price does not represent
the true value thereof, the value of the article used shall be determined as
nearly as possible according to the retail selling price at place of use of
similar products of like quality and character under such rules as the
department of revenue may prescribe.
(b)
In case the articles used are acquired by bailment, the value of the use of the
articles so used shall be in an amount representing a reasonable rental for the
use of the articles so bailed, determined as nearly as possible according to
the value of such use at the places of use of similar products of like quality
and character under such rules as the department of revenue may prescribe. In
case any such articles of tangible personal property are used in respect to the
construction, repairing, decorating, or improving of, and which become or are
to become an ingredient or component of, new or existing buildings or other
structures under, upon, or above real property of or for the United States, any
instrumentality thereof, or a county or city housing authority created pursuant
to chapter 35.82 RCW, including the installing or attaching of any such
articles therein or thereto, whether or not such personal property becomes a
part of the realty by virtue of installation, then the value of the use of such
articles so used shall be determined according to the retail selling price of such
articles, or in the absence of such a selling price, as nearly as possible
according to the retail selling price at place of use of similar products of
like quality and character or, in the absence of either of these selling price
measures, such value may be determined upon a cost basis, in any event under
such rules as the department of revenue may prescribe.
(c)
In the case of articles owned by a user engaged in business outside the state
which are brought into the state for no more than one hundred eighty days in
any period of three hundred sixty-five consecutive days and which are
temporarily used for business purposes by the person in this state, the value
of the article used shall be an amount representing a reasonable rental for the
use of the articles, unless the person has paid tax under this chapter or
chapter 82.08 RCW upon the full value of the article used, as defined in (a) of
this subsection.
(d)
In the case of articles manufactured or produced by the user and used in the
manufacture or production of products sold or to be sold to the department of
defense of the United States, the value of the articles used shall be
determined according to the value of the ingredients of such articles.
(e)
In the case of an article manufactured or produced for purposes of serving as a
prototype for the development of a new or improved product, the value of the
article used shall be determined by: (i) The retail selling price of such new
or improved product when first offered for sale; or (ii) the value of materials
incorporated into the prototype in cases in which the new or improved product
is not offered for sale.
(f)
In the case of an article purchased with a direct pay permit under RCW
82.32.087, the value of the article used shall be determined by the retail
selling price, as defined in RCW 82.08.010, of such article if but for the use
of the direct pay permit the transaction would have been subject to sales tax;
(2)
"Value of the service used" means the consideration, whether
money, credit, rights, or other property, expressed in terms of money, paid or
given or contracted to be paid or given by the purchaser to the seller for the
service, the use of which is taxable under this chapter. If the service is
received by gift or under conditions wherein the purchase price does not
represent the true value thereof, the value of the service used shall be
determined as nearly as possible according to the retail selling price at place
of use of similar services of like quality and character under rules the department
of revenue may prescribe;
(3)
"Use," "used," "using," or "put to use"
shall have their ordinary meaning, and shall mean:
(a)
With respect to tangible personal property, the first act within this state
by which the taxpayer takes or assumes dominion or control over the article of
tangible personal property (as a consumer), and include installation, storage,
withdrawal from storage, distribution, or any other act preparatory to
subsequent actual use or consumption within this state; and
(((3)))
(b) With respect to a service defined in RCW 82.04.050(2)(a), the first act
within this state by which the taxpayer takes or assumes dominion or control
over the article of tangible personal property upon which the service was
performed (as a consumer), and include installation, storage, withdrawal from
storage, distribution, or any other act preparatory to subsequent actual use or
consumption of the article within this state;
(4)
"Taxpayer" and "purchaser" include all persons included
within the meaning of the word "buyer" and the word
"consumer" as defined in chapters 82.04 and 82.08 RCW;
(((4)))
(5) "Retailer" means every seller as defined in RCW 82.08.010
and every person engaged in the business of selling tangible personal property
at retail and every person required to collect from purchasers the tax imposed
under this chapter;
(((5)))
(6) The meaning ascribed to words and phrases in chapters 82.04 and
82.08 RCW, insofar as applicable, shall have full force and effect with respect
to taxes imposed under the provisions of this chapter. "Consumer,"
in addition to the meaning ascribed to it in chapters 82.04 and 82.08 RCW
insofar as applicable, shall also mean any person who distributes or displays,
or causes to be distributed or displayed, any article of tangible personal
property, except newspapers, the primary purpose of which is to promote the
sale of products or services. With respect to property distributed to
persons within this state by a consumer as defined in this subsection (6), the
use of the property shall be deemed to be by such consumer.
Sec.
4. RCW
82.12.020 and 1999 c 358 s 9 are each amended to read as follows:
(1)
There is hereby levied and there shall be collected from every person in this
state a tax or excise for the privilege of using within this state as a
consumer: (a) Any article of tangible personal property purchased at retail,
or acquired by lease, gift, repossession, or bailment, or extracted or produced
or manufactured by the person so using the same, or otherwise furnished to a
person engaged in any business taxable under RCW 82.04.280 (2) or (7); or (b)
any canned software, regardless of the method of delivery, but excluding canned
software that is either provided free of charge or is provided for temporary
use in viewing information, or both.
(2)
This tax shall apply to the use of every service defined as a retail sale in
RCW 82.04.050 (2)(a) or (3)(a) and the use of every article of tangible
personal property, including property acquired at a casual or isolated sale,
and including byproducts used by the manufacturer thereof, except as
hereinafter provided, irrespective of whether the article or similar articles
are manufactured or are available for purchase within this state.
(3)
Except as provided in RCW 82.12.0252, payment by one purchaser or user of
tangible personal property or service of the tax imposed by chapter 82.08 or
82.12 RCW shall not have the effect of exempting any other purchaser or user of
the same property or service from the taxes imposed by such chapters.
(4)
The tax shall be levied and collected in an amount equal to the value of the
article used or value of the service used by the taxpayer multiplied by
the rate in effect for the retail sales tax under RCW 82.08.020.
Sec.
5. RCW
82.12.035 and 1996 c 148 s 6 are each amended to read as follows:
A
credit shall be allowed against the taxes imposed by this chapter upon the use
of tangible personal property, or services taxable under RCW 82.04.050 (2)(a)
or (3)(a), in the state of Washington in the amount that the present user
thereof or his or her bailor or donor has paid a retail sales or use tax with
respect to such property to any other state of the United States, any political
subdivision thereof, the District of Columbia, and any foreign country or
political subdivision thereof, prior to the use of such property in Washington.
Sec.
6. RCW
82.14.020 and 2001 c 186 s 3 are each amended to read as follows:
For
purposes of this chapter:
(1)
A retail sale consisting solely of the sale of tangible personal property shall
be deemed to have occurred at the retail outlet at or from which delivery is
made to the consumer;
(2)
A retail sale consisting essentially of the performance of personal,
business, or professional services shall be deemed to have occurred at
the place at which such services were primarily performed, except that for the
performance of a tow truck service, as defined in RCW 46.55.010, the retail
sale shall be deemed to have occurred at the place of business of the operator
of the tow truck service;
(3)
A retail sale consisting of the rental of tangible personal property shall be
deemed to have occurred (a) in the case of a rental involving periodic rental
payments, at the primary place of use by the lessee during the period covered
by each payment, or (b) in all other cases, at the place of first use by the
lessee;
(4)
A retail sale within the scope of RCW 82.04.050(2), and a retail sale of
taxable personal property to be installed by the seller shall be deemed to have
occurred at the place where the labor and services involved were primarily
performed;
(5)
A retail sale consisting of the providing to a consumer of telephone service,
as defined in RCW 82.04.065, other than a sale of tangible personal property
under subsection (1) of this section or a rental of tangible personal property
under subsection (3) of this section, shall be deemed to have occurred at the
situs of the telephone or other instrument through which the telephone service
is rendered;
(6)
A retail sale of linen and uniform supply services is deemed to occur as
provided in RCW 82.08.0202;
(7)
"City" means a city or town;
(8)
The meaning ascribed to words and phrases in chapters 82.04, 82.08 and 82.12
RCW, as now or hereafter amended, insofar as applicable, shall have full force
and effect with respect to taxes imposed under authority of this chapter;
(9)
"Taxable event" shall mean any retail sale, or any use ((of an
article of tangible personal property)), upon which a state tax is imposed
pursuant to chapter 82.08 or 82.12 RCW, as they now exist or may hereafter be
amended: PROVIDED, HOWEVER, That the term shall not include a retail sale
taxable pursuant to RCW 82.08.150, as now or hereafter amended;
(10)
"Treasurer or other legal depository" shall mean the treasurer or
legal depository of a county or city.
NEW
SECTION. Sec. 7. If
any provision of this act or its application to any person or circumstance is
held invalid, the remainder of the act or the application of the provision to
other persons or circumstances is not affected.
NEW
SECTION. Sec. 8. 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 June 1, 2002.
