BILL REQ. #: S-4972.1
| State of Washington | 58th Legislature | 2004 Regular Session |
READ FIRST TIME 02/26/04.
AN ACT Relating to correcting errors, omissions, and inconsistencies within Title 82 RCW from chapter 168, Laws of 2003, which implemented portions of the streamlined sales and use tax agreement; amending RCW 82.08.0283, 82.08.0281, 82.08.945, 82.12.945, 82.08.0293, 82.08.037, 82.08.100, 82.12.037, 82.12.070, 82.32.060, 82.04.4284, 82.16.050, 82.14B.150, 82.58.050, 82.04.040, 82.32.520, 82.32.530, 82.02.230, 82.08.010, 82.04.050, 82.32.525, 82.08.080, and 82.04.530; amending 2003 c 168 s 902 (uncodified); reenacting and amending RCW 82.12.0277; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; creating a new section; providing effective dates; providing a contingent expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 101 RCW 82.08.0283 and 2003 c 168 s 409 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 shall not apply to sales of:
(a) Prosthetic devices prescribed, fitted, or furnished for an
individual by a person licensed under ((chapter 18.22, 18.25, 18.57, or
18.71 RCW)) the laws of this state to prescribe, fit, or furnish
prosthetic devices;
(b) Medicines of mineral, animal, and botanical origin prescribed,
administered, dispensed, or used in the treatment of an individual by
a person licensed under chapter 18.36A RCW; and
(c) Medically prescribed oxygen, including, but not limited to,
oxygen concentrator systems, oxygen enricher systems, liquid oxygen
systems, and gaseous, bottled oxygen systems prescribed for an
individual by a person licensed under chapter 18.57 or 18.71 RCW for
use in the medical treatment of that individual.
(2) In addition, the tax levied by RCW 82.08.020 shall not apply to
charges made for labor and services rendered in respect to the
repairing, cleaning, altering, or improving of any of the items
exempted under subsection (1) of this section.
(((2))) (3) The exemption in subsection (1) of this section shall
not apply to sales of durable medical equipment or mobility enhancing
equipment.
(((3))) (4) The definitions in this subsection apply throughout
this section.
(a) "Prosthetic device" means a replacement, corrective, or
supportive device, including repair and replacement parts for a
prosthetic device, worn on or in the body to:
(i) Artificially replace a missing portion of the body;
(ii) Prevent or correct a physical deformity or malfunction; or
(iii) Support a weak or deformed portion of the body.
(b) "Durable medical equipment" means equipment, including repair
and replacement parts for durable medical equipment((, but does not
include mobility enhancing equipment,)) that:
(i) Can withstand repeated use;
(ii) Is primarily and customarily used to serve a medical purpose;
(iii) Generally is not useful to a person in the absence of illness
or injury; and
(iv) Does not work in or on the body.
(c) "Mobility enhancing equipment" means equipment, including
repair and replacement parts for mobility enhancing equipment((, but
does not include medical equipment,)) that:
(i) Is primarily and customarily used to provide or increase the
ability to move from one place to another and that is appropriate for
use either ((at)) in a home or a motor vehicle;
(ii) Is not generally used by persons with normal mobility; and
(iii) Does not include any motor vehicle or equipment on a motor
vehicle normally provided by a motor vehicle manufacturer.
(d) The terms "durable medical equipment" and "mobility enhancing
equipment" are mutually exclusive.
NEW SECTION. Sec. 102 A new section is added to chapter 82.08
RCW to read as follows:
The tax levied by RCW 82.08.020 shall not apply to sales of insulin
for human use.
NEW SECTION. Sec. 103 A new section is added to chapter 82.12
RCW to read as follows:
The provisions of this chapter shall not apply in respect to the
use of insulin by humans.
NEW SECTION. Sec. 104 A new section is added to chapter 82.08
RCW to read as follows:
The tax levied by RCW 82.08.020 shall not apply to sales of
nebulizers, including repair and replacement parts for nebulizers, for
human use pursuant to a prescription. In addition, the tax levied by
RCW 82.08.020 shall not apply to charges made for labor and services
rendered in respect to the repairing, cleaning, altering, or improving
of nebulizers. "Nebulizer" means a device, not a building fixture,
that converts a liquid medication into a mist so that it can be
inhaled.
NEW SECTION. Sec. 105 A new section is added to chapter 82.12
RCW to read as follows:
The provisions of this chapter shall not apply in respect to the
use of nebulizers, including repair and replacement parts for
nebulizers, for human use pursuant to a prescription. In addition, the
provisions of this chapter shall not apply in respect to labor and
services rendered in respect to the repairing, cleaning, altering, or
improving of nebulizers. "Nebulizer" has the same meaning as in
section 104 of this act.
NEW SECTION. Sec. 106 A new section is added to chapter 82.08
RCW to read as follows:
The tax levied by RCW 82.08.020 shall not apply to sales of ostomic
items used by colostomy, ileostomy, or urostomy patients. "Ostomic
items" means disposable medical supplies used by colostomy, ileostomy,
and urostomy patients, and includes bags, belts to hold up bags, tapes,
tubes, adhesives, deodorants, soaps, jellies, creams, germicides, and
other like supplies. "Ostomic items" does not include undergarments,
pads and shields to protect undergarments, sponges, or rubber sheets.
NEW SECTION. Sec. 107 A new section is added to chapter 82.12
RCW to read as follows:
The provisions of this chapter shall not apply in respect to the
use of ostomic items by colostomy, ileostomy, or urostomy patients.
"Ostomic items" has the same meaning as in section 106 of this act.
Sec. 108 RCW 82.08.0281 and 2003 c 168 s 403 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 shall not apply to sales of
drugs for human use dispensed or to be dispensed to patients, pursuant
to a prescription.
(2) The tax levied by RCW 82.08.020 shall not apply to sales of
drugs or devices used for family planning purposes, including the
prevention of conception, for human use dispensed or to be dispensed to
patients, pursuant to a prescription.
(3) The tax levied by RCW 82.08.020 shall not apply to sales of
drugs and devices used for family planning purposes, including the
prevention of conception, for human use supplied by a family planning
clinic that is under contract with the department of health to provide
family planning services.
(4) The definitions in this subsection apply throughout this
section.
(a) "Prescription" means an order, formula, or recipe issued in any
form of oral, written, electronic, or other means of transmission by a
duly licensed practitioner authorized by the laws of this state to
prescribe.
(b) "Drug" means a compound, substance, or preparation, and any
component of a compound, substance, or preparation, other than food and
food ingredients, dietary supplements, or alcoholic beverages:
(i) Recognized in the official United States pharmacopoeia,
official homeopathic pharmacopoeia of the United States, or official
national formulary, or any supplement to any of them; or
(ii) Intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease; or
(iii) Intended to affect the structure or any function of the body.
(c) "Over-the-counter drug" means a drug that contains a label that
identifies the product as a drug required by 21 C.F.R. Sec. 201.66, as
amended or renumbered on January 1, 2003. The label includes:
(i) A "drug facts" panel; or
(ii) A statement of the "active ingredient(s)" with a list of those
ingredients contained in the compound, substance, or preparation.
Sec. 109 RCW 82.12.0277 and 2003 c 168 s 412 and 2003 c 5 s 8 are
each reenacted and amended to read as follows:
(1) The provisions of this chapter shall not apply in respect to
the use of:
(a) Prosthetic devices prescribed, fitted, or furnished for an
individual by a person licensed under ((chapter 18.22, 18.25, 18.57, or
18.71 RCW)) the laws of this state to prescribe, fit, or furnish
prosthetic devices;
(b) Medicines of mineral, animal, and botanical origin prescribed,
administered, dispensed, or used in the treatment of an individual by
a person licensed under chapter 18.36A RCW; and
(c) Medically prescribed oxygen, including, but not limited to,
oxygen concentrator systems, oxygen enricher systems, liquid oxygen
systems, and gaseous, bottled oxygen systems prescribed for an
individual by a person licensed under chapter 18.57 or 18.71 RCW for
use in the medical treatment of that individual.
(2) In addition, the provisions of this chapter shall not apply in
respect to the use of labor and services rendered in respect to the
repairing, cleaning, altering, or improving of any of the items
exempted under subsection (1) of this section.
(((2))) (3) The exemption provided by subsection (1) of this
section shall not apply to the use of durable medical equipment or
mobility enhancing equipment.
(((3))) (4) "Prosthetic device," "durable medical equipment," and
"mobility enhancing equipment" have the same meanings as in RCW
82.08.0283.
Sec. 110 RCW 82.08.945 and 2003 c 168 s 410 are each amended to
read as follows:
The tax levied by RCW 82.08.020 shall not apply to sales of kidney
dialysis devices, including repair and replacement parts, for human use
pursuant to a prescription. In addition, the tax levied by RCW
82.08.020 shall not apply to charges made for labor and services
rendered in respect to the repairing, cleaning, altering, or improving
of kidney dialysis devices.
Sec. 111 RCW 82.12.945 and 2003 c 168 s 411 are each amended to
read as follows:
The provisions of this chapter shall not apply to the use of kidney
dialysis devices, including repair and replacement parts, for human use
pursuant to a prescription. In addition, the provisions of this
chapter shall not apply in respect to the use of labor and services
rendered in respect to the repairing, cleaning, altering, or improving
of kidney dialysis devices.
Sec. 201 RCW 82.08.0293 and 2003 c 168 s 301 are each amended to
read as follows:
(1) The tax levied by RCW 82.08.020 shall not apply to sales of
food and food ingredients. "Food and food ingredients" means
substances, whether in liquid, concentrated, solid, frozen, dried, or
dehydrated form, that are sold for ingestion or chewing by humans and
are consumed for their taste or nutritional value. "Food and food
ingredients" does not include:
(a) "Alcoholic beverages," which means beverages that are suitable
for human consumption and contain one-half of one percent or more of
alcohol by volume; and
(b) "Tobacco," which means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
(2) The exemption of "food and food ingredients" provided for in
subsection (1) of this section shall not apply to prepared food, soft
drinks, or dietary supplements.
(a) "Prepared food" means:
(i) Food sold in a heated state or heated by the seller;
(ii) ((Two or more food ingredients mixed or combined by the seller
for sale as a single item; or)) Food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins, or
straws. A plate does not include a container or packaging used to
transport the food((
(iii).));
or
"Prepared food" in (a)(ii) of this subsection, does not include
(iii) Two or more food ingredients mixed or combined by the seller
for sale as a single item, except:
(A) Food that is only cut, repackaged, or pasteurized by the seller
((and raw)); or
(B) Raw eggs, fish, meat, poultry, and foods containing these raw
animal foods requiring cooking by the consumer as recommended by the
federal food and drug administration in chapter 3, part 401.11 of The
Food Code, published by the food and drug administration, as amended or
renumbered as of January 1, 2003, so as to prevent foodborne illness((;
or bakery items, including bread, rolls, buns, biscuits, bagels,
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
muffins, bars, cookies, or tortillas)).
(b) "Prepared food" does not include the following food or food
ingredients, if the food or food ingredients are sold without eating
utensils provided by the seller:
(i) Food sold by a seller whose proper primary North American
industry classification system (NAICS) classification is manufacturing
in sector 311, except subsector 3118 (bakeries), as provided in the
"North American industry classification system--United States, 2002";
(ii) Food sold in an unheated state by weight or volume as a single
item; or
(iii) Bakery items. The term "bakery items" includes bread, rolls,
buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes,
tortes, pies, tarts, muffins, bars, cookies, or tortillas.
(c) "Soft drinks" means nonalcoholic beverages that contain natural
or artificial sweeteners. Soft drinks do not include beverages that
contain: Milk or milk products; soy, rice, or similar milk
substitutes; at least twenty percent cranberry juice by volume; or
greater than fifty percent of vegetable or fruit juice by volume. Soft
drinks do not include nectars of at least twenty percent fruit juice by
volume.
(((c))) (d) "Dietary supplement" means any product, other than
tobacco, intended to supplement the diet that:
(i) Contains one or more of the following dietary ingredients:
(A) A vitamin;
(B) A mineral;
(C) An herb or other botanical;
(D) An amino acid;
(E) A dietary substance for use by humans to supplement the diet by
increasing the total dietary intake; or
(F) A concentrate, metabolite, constituent, extract, or combination
of any ingredient described in this subsection; ((and))
(ii) Is intended for ingestion in tablet, capsule, powder, softgel,
gelcap, or liquid form, or if not intended for ingestion in such form,
is not represented as conventional food and is not represented for use
as a sole item of a meal or of the diet; and
(((ii))) (iii) Is required to be labeled as a dietary supplement,
identifiable by the "supplement facts" box found on the label as
required pursuant to 21 C.F.R. Sec. 101.36, as amended or renumbered as
of January 1, 2003.
(3) Notwithstanding anything in this section to the contrary, the
exemption of "food and food ingredients" provided in this section shall
apply to food and food ingredients ((which)) that are furnished,
prepared, or served as meals:
(a) Under a state administered nutrition program for the aged as
provided for in the Older Americans Act (P.L. 95-478 Title III) and RCW
74.38.040(6); or
(b) ((Which)) That are provided to senior citizens, disabled
persons, or low-income persons by a not-for-profit organization
organized under chapter 24.03 or 24.12 RCW.
(4)(a) Subsection (1) of this section notwithstanding, the retail
sale of food and food ingredients is subject to sales tax under RCW
82.08.020 if the food and food ingredients are sold through a vending
machine, and in this case the selling price for purposes of RCW
82.08.020 is fifty-seven percent of the gross receipts.
(b) This subsection (4) does not apply to hot prepared food and
food ingredients, other than food and food ingredients which are heated
after they have been dispensed from the vending machine.
(c) For tax collected under this subsection (4), the requirements
that the tax be collected from the buyer and that the amount of tax be
stated as a separate item are waived.
NEW SECTION. Sec. 301 For the purposes of sections 302 through
305 of this act, the legislature does not intend by any provision of
this act relating to bad debts, and did not intend by any provision of
chapter 168, Laws of 2003 relating to bad debts, to affect the holding
of the supreme court of the state of Washington in Puget Sound National
Bank v. the Department of Revenue, 123 Wn. 2nd 284 (1994).
Sec. 302 RCW 82.08.037 and 2003 c 168 s 212 are each amended to
read as follows:
(1) A seller is entitled to a credit or refund for sales taxes
previously paid on ((debts which are)) bad debts ((under)), as that
term is used in 26 U.S.C. Sec. 166, as amended or renumbered as of
January 1, 2003((, except for:)).
(2) For purposes of this section, "bad debts" does not include:
(a) Amounts due on property that remains in the possession of the
seller until the full purchase price is paid;
(b) Expenses incurred in attempting to collect debt; and
(c) Repossessed property.
(((2))) (3) If a credit or refund of sales tax is taken for a bad
debt and the debt is subsequently collected in whole or in part, the
tax on the amount collected must be paid and reported on the return
filed for the period in which the collection is made.
(((3))) (4) Payments on a previously claimed bad debt are applied
first proportionally to the taxable price of the property or service
and the sales or use tax thereon, and secondly to interest, service
charges, and any other charges.
(((4))) (5) If the seller uses a certified service provider as
defined in RCW 82.58.010 to administer its sales tax responsibilities,
the certified service provider may claim, on behalf of the seller, the
credit or refund allowed by this section. The certified service
provider must credit or refund the full amount received to the seller.
(6) The department shall allow an allocation of bad debts among
member states to the streamlined sales tax agreement, as defined in RCW
82.58.010(1), if the books and records of the person claiming bad debts
support the allocation.
Sec. 303 RCW 82.08.100 and 1982 1st ex.s. c 35 s 37 are each
amended to read as follows:
The department of revenue, by general regulation, shall provide
that a taxpayer whose regular books of account are kept on a cash
receipts basis may file returns based upon his cash receipts for each
reporting period and pay the tax herein provided upon such basis in
lieu of reporting and paying the tax on all sales made during such
period. A taxpayer filing returns on a cash receipts basis is not
required to pay such tax on ((debts which are deductible as worthless
for federal income tax purposes)) debt subject to credit or refund
under RCW 82.08.037.
Sec. 304 RCW 82.12.037 and 1982 1st ex.s. c 35 s 36 are each
amended to read as follows:
(1) A seller is entitled to a credit or refund for use taxes
previously paid on ((debts which are deductible as worthless for
federal income tax purposes)) bad debts, as that term is used in 26
U.S.C. Sec. 166, as amended or renumbered as of January 1, 2003.
(2) For purposes of this section, "bad debts" does not include:
(a) Amounts due on property that remains in the possession of the
seller until the full purchase price is paid;
(b) Expenses incurred in attempting to collect debt; and
(c) Repossessed property.
(3) If a credit or refund of use tax is taken for a bad debt and
the debt is subsequently collected in whole or in part, the tax on the
amount collected must be paid and reported on the return filed for the
period in which the collection is made.
(4) Payments on a previously claimed bad debt are applied first
proportionally to the taxable price of the property or service and the
sales or use tax thereon, and secondly to interest, service charges,
and any other charges.
(5) If the seller uses a certified service provider as defined in
RCW 82.58.010 to administer its use tax responsibilities, the certified
service provider may claim, on behalf of the seller, the credit or
refund allowed by this section. The certified service provider must
credit or refund the full amount received to the seller.
(6) The department shall allow an allocation of bad debts among
member states to the streamlined sales and use tax agreement, as
defined in RCW 82.58.010(1), if the books and records of the person
claiming bad debts support the allocation.
Sec. 305 RCW 82.12.070 and 1982 1st ex.s. c 35 s 38 are each
amended to read as follows:
The department of revenue, by general regulation, shall provide
that a taxpayer whose regular books of account are kept on a cash
receipts basis may file returns based upon his cash receipts for each
reporting period and pay the tax herein provided upon such basis in
lieu of reporting and paying the tax on all sales made during such
period. A taxpayer filing returns on a cash receipts basis is not
required to pay such tax on ((debts which are deductible as worthless
for federal income tax purposes)) debt subject to credit or refund
under RCW 82.12.037.
Sec. 306 RCW 82.32.060 and 2003 c 73 s 2 are each amended to read
as follows:
(1) If, upon receipt of an application by a taxpayer for a refund
or for an audit of the taxpayer's records, or upon an examination of
the returns or records of any taxpayer, it is determined by the
department that within the statutory period for assessment of taxes,
penalties, or interest prescribed by RCW 82.32.050 any amount of tax,
penalty, or interest has been paid in excess of that properly due, the
excess amount paid within, or attributable to, such period shall be
credited to the taxpayer's account or shall be refunded to the
taxpayer, at the taxpayer's option. Except as provided in subsection
(2) of this section, no refund or credit shall be made for taxes,
penalties, or interest paid more than four years prior to the beginning
of the calendar year in which the refund application is made or
examination of records is completed.
(2)(a) The execution of a written waiver under RCW 82.32.050 or
82.32.100 shall extend the time for making a refund or credit of any
taxes paid during, or attributable to, the years covered by the waiver
if, prior to the expiration of the waiver period, an application for
refund of such taxes is made by the taxpayer or the department
discovers a refund or credit is due.
(b) A refund or credit shall be allowed for an excess payment
resulting from the failure to claim a bad debt deduction, credit, or
refund under RCW 82.04.4284, 82.08.037, 82.12.037, 82.14B.150, or
82.16.050(5) for debts that became bad debts under 26 U.S.C. Sec. 166,
as amended or renumbered as of January 1, 2003, less than four years
prior to the beginning of the calendar year in which the refund
application is made or examination of records is completed.
(3) Any such refunds shall be made by means of vouchers approved by
the department and by the issuance of state warrants drawn upon and
payable from such funds as the legislature may provide. However,
taxpayers who are required to pay taxes by electronic funds transfer
under RCW 82.32.080 shall have any refunds paid by electronic funds
transfer.
(4) Any judgment for which a recovery is granted by any court of
competent jurisdiction, not appealed from, for tax, penalties, and
interest which were paid by the taxpayer, and costs, in a suit by any
taxpayer shall be paid in the same manner, as provided in subsection
(3) of this section, upon the filing with the department of a certified
copy of the order or judgment of the court.
(a) Interest at the rate of three percent per annum shall be
allowed by the department and by any court on the amount of any refund,
credit, or other recovery allowed to a taxpayer for taxes, penalties,
or interest paid by the taxpayer before January 1, 1992. This rate of
interest shall apply for all interest allowed through December 31,
1998. Interest allowed after December 31, 1998, shall be computed at
the rate as computed under RCW 82.32.050(2). The rate so computed
shall be adjusted on the first day of January of each year for use in
computing interest for that calendar year.
(b) For refunds or credits of amounts paid or other recovery
allowed to a taxpayer after December 31, 1991, the rate of interest
shall be the rate as computed for assessments under RCW 82.32.050(2)
less one percent. This rate of interest shall apply for all interest
allowed through December 31, 1998. Interest allowed after December 31,
1998, shall be computed at the rate as computed under RCW 82.32.050(2).
The rate so computed shall be adjusted on the first day of January of
each year for use in computing interest for that calendar year.
(5) Interest allowed on a credit notice or refund issued after
December 31, 2003, shall be computed as follows:
(a) If all overpayments for each calendar year and all reporting
periods ending with the final month included in a notice or refund were
made on or before the due date of the final return for each calendar
year or the final reporting period included in the notice or refund:
(i) Interest shall be computed from January 31st following each
calendar year included in a notice or refund; or
(ii) Interest shall be computed from the last day of the month
following the final month included in a notice or refund.
(b) If the taxpayer has not made all overpayments for each calendar
year and all reporting periods ending with the final month included in
a notice or refund on or before the dates specified by RCW 82.32.045
for the final return for each calendar year or the final month included
in the notice or refund, interest shall be computed from the last day
of the month following the date on which payment in full of the
liabilities was made for each calendar year included in a notice or
refund, and the last day of the month following the date on which
payment in full of the liabilities was made if the final month included
in a notice or refund is not the end of a calendar year.
(c) Interest included in a credit notice shall accrue up to the
date the taxpayer could reasonably be expected to use the credit
notice, as defined by the department's rules. If a credit notice is
converted to a refund, interest shall be recomputed to the date the
refund is issued, but not to exceed the amount of interest that would
have been allowed with the credit notice.
Sec. 307 RCW 82.04.4284 and 1980 c 37 s 5 are each amended to
read as follows:
(1) In computing tax there may be deducted from the measure of tax
((the amount of credit losses actually sustained by taxpayers whose
regular books of account are kept upon an accrual basis)) bad debts, as
that term is used in 26 U.S.C. Sec. 166, as amended or renumbered as of
January 1, 2003, on which tax was previously paid.
(2) For purposes of this section, "bad debts" do not include:
(a) Amounts due on property that remains in the possession of the
seller until the full purchase price is paid;
(b) Expenses incurred in attempting to collect debt;
(c) Sales or use taxes payable to a seller; and
(d) Repossessed property.
(3) If a deduction is taken for a bad debt and the debt is
subsequently collected in whole or in part, the tax on the amount
collected must be paid and reported on the return filed for the period
in which the collection is made.
(4) Payments on a previously claimed bad debt must be applied under
RCW 82.08.037(4) and 82.12.037, according to such rules as the
department may prescribe.
Sec. 308 RCW 82.16.050 and 2000 c 245 s 1 are each amended to
read as follows:
In computing tax there may be deducted from the gross income the
following items:
(1) Amounts derived by municipally owned or operated public service
businesses, directly from taxes levied for the support or maintenance
thereof: PROVIDED, That this section shall not be construed to exempt
service charges which are spread on the property tax rolls and
collected as taxes;
(2) Amounts derived from the sale of commodities to persons in the
same public service business as the seller, for resale as such within
this state. This deduction is allowed only with respect to water
distribution, gas distribution or other public service businesses which
furnish water, gas or any other commodity in the performance of public
service businesses;
(3) Amounts actually paid by a taxpayer to another person taxable
under this chapter as the latter's portion of the consideration due for
services furnished jointly by both, if the total amount has been
credited to and appears in the gross income reported for tax by the
former;
(4) The amount of cash discount actually taken by the purchaser or
customer;
(5) The amount of ((credit losses actually sustained by taxpayers
whose regular books of accounts are kept upon an accrual basis)) bad
debts, as that term is used in 26 U.S.C. Sec. 166, as amended or
renumbered as of January 1, 2003, on which tax was previously paid
under this chapter;
(6) Amounts derived from business which the state is prohibited
from taxing under the Constitution of this state or the Constitution or
laws of the United States;
(7) Amounts derived from the distribution of water through an
irrigation system, for irrigation purposes;
(8) Amounts derived from the transportation of commodities from
points of origin in this state to final destination outside this state,
or from points of origin outside this state to final destination in
this state, with respect to which the carrier grants to the shipper the
privilege of stopping the shipment in transit at some point in this
state for the purpose of storing, manufacturing, milling, or other
processing, and thereafter forwards the same commodity, or its
equivalent, in the same or converted form, under a through freight rate
from point of origin to final destination; and amounts derived from the
transportation of commodities from points of origin in the state to an
export elevator, wharf, dock or ship side on tidewater or navigable
tributaries thereto from which such commodities are forwarded, without
intervening transportation, by vessel, in their original form, to
interstate or foreign destinations: PROVIDED, That no deduction will
be allowed when the point of origin and the point of delivery to such
an export elevator, wharf, dock, or ship side are located within the
corporate limits of the same city or town;
(9) Amounts derived from the production, sale, or transfer of
electrical energy for resale within or outside the state or for
consumption outside the state;
(10) Amounts derived from the distribution of water by a nonprofit
water association and used for capital improvements by that nonprofit
water association;
(11) Amounts paid by a sewerage collection business taxable under
RCW 82.16.020(1)(a) to a person taxable under chapter 82.04 RCW for the
treatment or disposal of sewage.
Sec. 309 RCW 82.14B.150 and 1998 c 304 s 7 are each amended to
read as follows:
(1) A local exchange company or radio communications service
company shall file tax returns on a cash receipts or accrual basis
according to which method of accounting is regularly employed in
keeping the books of the company. A local exchange company or radio
communications service company filing returns on a cash receipts basis
is not required to pay tax on ((debts that are deductible as worthless
for federal income tax purposes)) debt subject to credit or refund
under subsection (2) of this section.
(2) A local exchange company or radio communications service
company is entitled to a credit or refund for state enhanced 911 excise
taxes previously paid on bad debts ((that are deductible as worthless
for federal income tax purposes)), as that term is used in 26 U.S.C.
Sec. 166, as amended or renumbered as of January 1, 2003.
Sec. 401 RCW 82.58.050 and 2002 c 267 s 7 are each amended to
read as follows:
The department shall not enter into the streamlined sales and use
tax agreement unless the agreement requires each state to abide by the
requirements in this section.
(1) The agreement must set restrictions to limit over time the
number of state rates.
(2) The agreement must establish uniform standards for:
(a) The sourcing of transactions to taxing jurisdictions;
(b) The administration of exempt sales; and
(c) Sales and use tax returns and remittances.
(3) The agreement must provide a central, electronic registration
system that allows a seller to register to collect and remit sales and
use taxes for all signatory states.
(4) The agreement must provide that registration with the central
registration system and the collection of sales and use taxes in the
signatory states will not be used as a factor in determining whether
the seller has nexus with a state for any tax.
(5) The agreement must provide for reduction of the burdens of
complying with local sales and use taxes by:
(a) Restricting variances between the state and local tax bases;
(b) Requiring states to administer any sales and use taxes levied
by local jurisdictions within the state so that sellers collecting and
remitting these taxes will not have to register or file returns with,
remit funds to, or be subject to independent audits from local taxing
jurisdictions;
(c) Restricting the frequency of changes in the local sales and use
tax rates and setting effective dates for the application of local
jurisdictional boundary changes to local sales and use taxes; and
(d) Providing notice of changes in local sales and use tax rates
and of changes in the boundaries of local taxing jurisdictions.
(6) The agreement must outline any monetary allowances that are to
be provided by the states to sellers or certified service providers.
The agreement must allow for a joint public and private sector study of
the compliance cost on sellers and certified service providers to
collect sales and use taxes for state and local governments under
various levels of complexity ((to be completed by July 1, 2002)).
(7) The agreement must require each state to certify compliance
with the terms of the agreement before joining and to maintain
compliance, under the laws of the member state, with all provisions of
the agreement while a member.
(8) The agreement must require each state to adopt a uniform policy
for certified service providers that protects the privacy of consumers
and maintains the confidentiality of tax information.
(9) The agreement must provide for the appointment of an advisory
council of private sector representatives and an advisory council of
nonmember state representatives to consult with in the administration
of the agreement.
Sec. 402 RCW 82.04.040 and 2003 c 168 s 103 are each amended to
read as follows:
(1) "Sale" means any transfer of the ownership of, title to, or
possession of property for a valuable consideration and includes any
activity classified as a "sale at retail" or "retail sale" under RCW
82.04.050. It includes lease or rental, conditional sale contracts,
and any contract under which possession of the property is given to the
purchaser but title is retained by the vendor as security for the
payment of the purchase price. It also includes the furnishing of
food, drink, or meals for compensation whether consumed upon the
premises or not.
(2) "Casual or isolated sale" means a sale made by a person who is
not engaged in the business of selling the type of property involved.
(3)(a) "Lease or rental" means any transfer of possession or
control of tangible personal property for a fixed or indeterminate term
for consideration. A lease or rental may include future options to
purchase or extend. "Lease or rental" includes ((transactions under))
agreements covering motor vehicles and trailers where the amount of
consideration may be increased or decreased by reference to the amount
realized upon sale or disposition of the property as defined in 26
U.S.C. Sec. 7701(h)(1), as amended or renumbered as of January 1, 2003.
The definition in this subsection (3) shall be used for sales and use
tax purposes regardless if a transaction is characterized as a lease or
rental under generally accepted accounting principles, the United
States internal revenue code, Washington state's commercial code, or
other provisions of federal, state, or local law.
(b) "Lease or rental" does not include:
(i) A transfer of possession or control of property under a
security agreement or deferred payment plan that requires the transfer
of title upon completion of the required payments;
(ii) A transfer of possession or control of ((party)) property
under an agreement that requires the transfer of title upon completion
of required payments, and payment of an option price does not exceed
the greater of one hundred dollars or one percent of the total required
payments; or
(iii) Providing tangible personal property along with an operator
for a fixed or indeterminate period of time. A condition of this
exclusion is that the operator is necessary for the ((equipment))
tangible personal property to perform as designed. For the purpose of
this subsection (3)(b)(iii), an operator must do more than maintain,
inspect, or set up the tangible personal property.
Sec. 403 RCW 82.32.520 and 2003 c 168 s 501 are each amended to
read as follows:
(1) Except for the defined telecommunications services listed in
this section, the sale of telephone service as defined in RCW 82.04.065
sold on a call-by-call basis shall be sourced to (a) each level of
taxing jurisdiction where the call originates and terminates in that
jurisdiction or (b) each level of taxing jurisdiction where the call
either originates or terminates and in which the service address is
also located.
(2) Except for the defined telecommunications services listed in
this section, a sale of telephone service as defined in RCW 82.04.065
sold on a basis other than a call-by-call basis, is sourced to the
customer's place of primary use.
(3) The sales of telephone service as defined in RCW 82.04.065 that
are listed in this section shall be sourced to each level of taxing
jurisdiction as follows:
(a) A sale of mobile telecommunications services, other than air-ground radiotelephone service and prepaid calling service, is sourced
to the customer's place of primary use as required by RCW 82.08.066.
(b) A sale of postpaid calling service is sourced to the
origination point of the telecommunications signal as first identified
by either (i) the seller's telecommunications system, or (ii)
information received by the seller from its ((home)) service provider,
where the system used to transport such signals is not that of the
seller.
(c) A sale of prepaid calling service is sourced as follows:
(i) When a prepaid calling service is received by the purchaser at
a business location of the seller, the sale is sourced to that business
location;
(ii) When a prepaid calling service is not received by the
purchaser at a business location of the seller, the sale is sourced to
the location where receipt by the purchaser or the purchaser's donee,
designated as such by the purchaser, occurs, including the location
indicated by instructions for delivery to the purchaser or donee, known
to the seller;
(iii) When (c)(i) and (ii) of this subsection do not apply, the
sale is sourced to the location indicated by an address for the
purchaser that is available from the business records of the seller
that are maintained in the ordinary course of the seller's business
when use of this address does not constitute bad faith;
(iv) When (c)(i), (ii), and (iii) of this subsection do not apply,
the sale is sourced to the location indicated by an address for the
purchaser obtained during the consummation of the sale, including the
address of a purchaser's payment instrument, if no other address is
available, when use of this address does not constitute bad faith;
(v) When (c)(i), (ii), (iii), and (iv) of this subsection do not
apply, including the circumstance where the seller is without
sufficient information to apply those provisions, then the location
shall be determined by the address from which tangible personal
property was shipped, from which the digital good or the computer
software delivered electronically was first available for transmission
by the seller, or from which the service defined as a retail sale under
RCW 82.04.050 was provided, disregarding for these purposes any
location that merely provided the digital transfer of the product sold;
(vi) In the case of a sale of mobile telecommunications service
that is a prepaid telecommunications service, (c)(((iv))) (v) of this
subsection shall include as an option the location associated with the
mobile telephone number.
(d) A sale of a private communication service is sourced as
follows:
(i) Service for a separate charge related to a customer channel
termination point is sourced to each level of jurisdiction in which
such customer channel termination point is located.
(ii) Service where all customer termination points are located
entirely within one jurisdiction or levels of jurisdiction is sourced
in such jurisdiction in which the customer channel termination points
are located.
(iii) Service for segments of a channel between two customer
channel termination points located in different jurisdictions and which
segment of channel are separately charged is sourced fifty percent in
each level of jurisdiction in which the customer channel termination
points are located.
(iv) Service for segments of a channel located in more than one
jurisdiction or levels of jurisdiction and which segments are not
separately billed is sourced in each jurisdiction based on the
percentage determined by dividing the number of customer channel
termination points in the jurisdiction by the total number of customer
channel termination points.
(4) The definitions in this subsection apply throughout this
chapter.
(a) "Air-ground radiotelephone service" means air-ground radio
service, as defined in 47 C.F.R. Sec. 22.99, as amended or renumbered
as of January 1, 2003, in which common carriers are authorized to offer
and provide radio telecommunications service for hire to subscribers in
aircraft.
(b) "Call-by-call basis" means any method of charging for
telecommunications services where the price is measured by individual
calls.
(c) "Communications channel" means a physical or virtual path of
communications over which signals are transmitted between or among
customer channel termination points.
(d) "Customer" means the person or entity that contracts with the
seller of telecommunications services. If the end user of
telecommunications services is not the contracting party, the end user
of the telecommunications service is the customer of the
telecommunications service. "Customer" does not include a reseller of
telecommunications service or for mobile telecommunications service of
a serving carrier under an agreement to serve the customer outside the
home service provider's licensed service area.
(e) "Customer channel termination point" means the location where
the customer either inputs or receives the communications.
(f) "End user" means the person who uses the telecommunications
service. In the case of an entity, the term end user means the
individual who uses the service on behalf of the entity.
(g) "Home service provider" means the same as that term is defined
in RCW 82.04.065.
(h) "Mobile telecommunications service" means the same as that term
is defined in RCW 82.04.065.
(i) "Place of primary use" means the street address representative
of where the customer's use of the telecommunications service primarily
occurs, which must be the residential street address or the primary
business street address of the customer. In the case of mobile
telecommunications services, "place of primary use" must be within the
licensed service area of the home service provider.
(j) "Postpaid calling service" means the telecommunications service
obtained by making a payment on a call-by-call basis either through the
use of a credit card or payment mechanism such as a bank card, travel
card, credit card, or debit card, or by charge made to which a
telephone number that is not associated with the origination or
termination of the telecommunications service. A postpaid calling
service includes a telecommunications service that would be a prepaid
calling service except it is not exclusively a telecommunications
service.
(k) "Prepaid calling service" means the right to access exclusively
telecommunications services, which must be paid for in advance and
which enables the origination of calls using ((and [an])) an access
number and/or authorization code, whether manually or electronically
dialed, and that is sold in predetermined units or dollars of which the
number declines with use in a known amount.
(l) "Private communication service" means a telecommunications
service that entitles the customer to exclusive or priority use of a
communications channel or group of channels between or among
termination points, regardless of the manner in which such channel or
channels are connected, and includes switching capacity, extension
lines, stations, and any other associated services that are provided in
connection with the use of such channel or channels.
(m) "Service address" means:
(i) The location of the telecommunications equipment to which a
customer's call is charged and from which the call originates or
terminates, regardless of where the call is billed or paid;
(ii) If the location in (m)(i) of this subsection is not known, the
origination point of the signal of the telecommunications services
first identified by either the seller's telecommunications system or in
information received by the seller from its ((home)) service provider,
where the system used to transport such signals is not that of the
seller;
(iii) If the ((location[s])) locations in (m)(i) and (ii) of this
subsection are not known, the location of the customer's place of
primary use.
Sec. 404 RCW 82.32.530 and 2003 c 168 s 213 are each amended to
read as follows:
The department may not ((attribute nexus with Washington to any
seller solely by virtue of the seller registering under the streamlined
sales and use tax agreement)) use registration under the streamlined
sales and use tax agreement and collection of sales and use taxes in
member states as a factor in determining whether the seller has nexus
with Washington for any tax at any time.
Sec. 405 RCW 82.02.230 and 2003 c 168 s 801 are each amended to
read as follows:
(1) There shall be one statewide rate for sales and use taxes
imposed at the state level. This subsection does not apply to the
taxes imposed by RCW 82.08.150, 82.12.022, or 82.18.020, or to taxes
imposed on the sale, rental, lease, or use of motor vehicles, aircraft,
watercraft, modular homes, manufactured homes, or mobile homes.
(2) There shall be one jurisdiction-wide rate for local sales and
use taxes imposed at levels below the state level. This subsection
does not apply to the taxes imposed by chapter 67.28 RCW, RCW
35.21.280, 36.38.010, 36.38.040, 67.40.090, or 82.14.360, or to taxes
imposed on the sale, rental, lease, or use of motor vehicles, aircraft,
watercraft, modular homes, manufactured homes, or mobile homes.
Sec. 406 RCW 82.08.010 and 2003 c 168 s 101 are each amended to
read as follows:
For the purposes of this chapter:
(1) "Selling price" includes "sales price." "Sales price" means
the total amount of consideration, except separately stated trade-in
property of like kind, including cash, credit, property, and services,
for which tangible personal property or services defined as a "retail
sale" under RCW 82.04.050 are sold, leased, or rented, valued in money,
whether received in money or otherwise. No deduction from the total
amount of consideration is allowed for the following: (a) The seller's
cost of the property sold; (b) the cost of materials used, labor or
service cost, interest, losses, all costs of transportation to the
seller, all taxes imposed on the seller, and any other expense of the
seller; (c) charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges; (d)
delivery charges; (e) installation charges; and (f) the value of exempt
tangible personal property given to the purchaser where taxable and
exempt tangible personal property have been bundled together and sold
by the seller as a single product or piece of merchandise.
When tangible personal property is rented or leased under
circumstances that the consideration paid does not represent a
reasonable rental for the use of the articles so rented or leased, the
"selling price" shall be 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 may prescribe.
"Selling price" or "sales price" does not include: Discounts,
including cash, term, or coupons that are not reimbursed by a third
party that are allowed by a seller and taken by a purchaser on a sale;
interest, financing, and carrying charges from credit extended on the
sale of tangible personal property or services, if the amount is
separately stated on the invoice, bill of sale, or similar document
given to the purchaser; and any taxes legally imposed directly on the
consumer that are separately stated on the invoice, bill of sale, or
similar document given to the purchaser;
(2) "Seller" means every person, including the state and its
departments and institutions, making sales at retail or retail sales to
a buyer, purchaser, or consumer, whether as agent, broker, or
principal, except "seller" does not mean the state and its departments
and institutions when making sales to the state and its departments and
institutions;
(3) "Buyer," "purchaser," and "consumer" include, without limiting
the scope hereof, every individual, receiver, assignee, trustee in
bankruptcy, trust, estate, firm, copartnership, joint venture, club,
company, joint stock company, business trust, corporation, association,
society, or any group of individuals acting as a unit, whether mutual,
cooperative, fraternal, nonprofit, or otherwise, municipal corporation,
quasi municipal corporation, and also the state, its departments and
institutions and all political subdivisions thereof, irrespective of
the nature of the activities engaged in or functions performed, and
also the United States or any instrumentality thereof;
(4) "Delivery charges" means charges by the seller of personal
property or services for preparation and delivery to a location
designated by the purchaser of personal property or services including,
but not limited to, transportation, shipping, postage, handling,
crating, and packing;
(5) The meaning attributed in chapter 82.04 RCW to the terms "tax
year," "taxable year," "person," "company," "sale," "sale at retail,"
"retail sale," "sale at wholesale," "wholesale," "business," "engaging
in business," "cash discount," "successor," "consumer," "in this state"
and "within this state" shall apply equally to the provisions of this
chapter;
(6) For the purposes of the taxes imposed under this chapter and
under chapter 82.12 RCW, "tangible personal property" means personal
property that can be seen, weighed, measured, felt, or touched, or that
is in any other manner perceptible to the senses. Tangible personal
property includes electricity, water, gas, steam, and prewritten
computer software.
Sec. 407 RCW 82.04.050 and 2003 c 168 s 104 are each amended to
read as follows:
(1) "Sale at retail" or "retail sale" means every sale of tangible
personal property (including articles produced, fabricated, or
imprinted) to all persons irrespective of the nature of their 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 a sale to a person
who presents a resale certificate under RCW 82.04.470 and who:
(a) Purchases for the purpose of resale as tangible personal
property in the regular course of business without intervening use by
such person, but a purchase for the purpose of resale by a regional
transit authority under RCW 81.112.300 is not a sale for resale; or
(b) Installs, repairs, cleans, alters, imprints, improves,
constructs, or decorates real or personal property of or for consumers,
if such tangible personal property becomes an ingredient or component
of such real or personal property without intervening use by such
person; or
(c) Purchases for the purpose of consuming the property purchased
in producing for sale a new article of tangible personal property or
substance, of which such property becomes an ingredient or component or
is 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; or
(e) Purchases for the purpose of providing the property to
consumers as part of competitive telephone service, as defined in RCW
82.04.065. The term shall include every sale of tangible personal
property which is used or consumed or to be used or consumed in the
performance of any activity classified as a "sale at retail" or "retail
sale" even though such property is resold or utilized as provided in
(a), (b), (c), (d), or (e) of this subsection following such use. The
term also means every sale of tangible personal property to persons
engaged in any business which is taxable under RCW 82.04.280 (2) and
(7) and 82.04.290.
(2) The term "sale at retail" or "retail sale" shall include the
sale of or charge made for tangible personal property consumed and/or
for labor and services rendered in respect to the following:
(a) The installing, repairing, cleaning, altering, imprinting, or
improving of tangible personal property of or for consumers, including
charges made for the mere use of facilities in respect thereto, but
excluding charges made for the use of coin-operated laundry facilities
when such facilities are situated in an apartment house, rooming house,
or mobile home park for the exclusive use of the tenants thereof, and
also excluding sales of laundry service to nonprofit health care
facilities, and excluding services rendered in respect to live animals,
birds and insects;
(b) The constructing, repairing, decorating, or improving of new or
existing buildings or other structures under, upon, or above real
property of or for consumers, 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, and shall also include the sale of services or charges
made for the clearing of land and the moving of earth excepting the
mere leveling of land used in commercial farming or agriculture;
(c) The charge for labor and services rendered in respect to
constructing, repairing, or improving any structure upon, above, or
under any real property owned by an owner who conveys the property by
title, possession, or any other means to the person performing such
construction, repair, or improvement for the purpose of performing such
construction, repair, or improvement and the property is then
reconveyed by title, possession, or any other means to the original
owner;
(d) The sale of or charge made for labor and services rendered in
respect to the cleaning, fumigating, razing or moving of existing
buildings or structures, but shall not include the charge made for
janitorial services; and for purposes of this section the term
"janitorial services" shall mean those cleaning and caretaking services
ordinarily performed by commercial janitor service businesses
including, but not limited to, wall and window washing, floor cleaning
and waxing, and the cleaning in place of rugs, drapes and upholstery.
The term "janitorial services" does not include painting, papering,
repairing, furnace or septic tank cleaning, snow removal or
sandblasting;
(e) The sale of or charge made for labor and services rendered in
respect to automobile towing and similar automotive transportation
services, but not in respect to those required to report and pay taxes
under chapter 82.16 RCW;
(f) The sale of and charge made for the furnishing of lodging and
all other services by a hotel, rooming house, tourist court, motel,
trailer camp, and the granting of any similar license to use real
property, as distinguished from the renting or leasing of real
property, and it shall be presumed that the occupancy of real property
for a continuous period of one month or more constitutes a rental or
lease of real property and not a mere license to use or enjoy the same.
For the purposes of this subsection, it shall be presumed that the sale
of and charge made for the furnishing of lodging for a continuous
period of one month or more to a person is a rental or lease of real
property and not a mere license to enjoy the same;
(g) The sale of or charge made for tangible personal property,
labor and services to persons taxable under (a), (b), (c), (d), (e),
and (f) of this subsection when such sales or charges are for property,
labor and services which are used or consumed in whole or in part by
such persons in the performance of any activity defined as a "sale at
retail" or "retail sale" even though such property, labor and services
may be resold after such use or consumption. Nothing contained in this
subsection shall be construed to modify subsection (1) of this section
and nothing contained in subsection (1) of this section shall be
construed to modify this subsection.
(3) The term "sale at retail" or "retail sale" shall include the
sale of or charge made for personal, business, or professional services
including amounts designated as interest, rents, fees, admission, and
other service emoluments however designated, received by persons
engaging in the following business activities:
(a) Amusement and recreation services including but not limited to
golf, pool, billiards, skating, bowling, ski lifts and tows, day trips
for sightseeing purposes, and others, when provided to consumers;
(b) Abstract, title insurance, and escrow services;
(c) Credit bureau services;
(d) Automobile parking and storage garage services;
(e) Landscape maintenance and horticultural services but excluding
(i) horticultural services provided to farmers and (ii) pruning,
trimming, repairing, removing, and clearing of trees and brush near
electric transmission or distribution lines or equipment, if performed
by or at the direction of an electric utility;
(f) Service charges associated with tickets to professional
sporting events; and
(g) The following personal services: Physical fitness services,
tanning salon services, tattoo parlor services, steam bath services,
turkish bath services, escort services, and dating services.
(4)(a) The term shall also include:
(i) The renting or leasing of tangible personal property to
consumers; and
(ii) Providing tangible personal property along with an operator
for a fixed or indeterminate period of time. A consideration of this
is that the operator is necessary for the ((equipment)) tangible
personal property to perform as designed. For the purpose of this
subsection (4)(a)(ii), an operator must do more than maintain, inspect,
or set up the tangible personal property.
(b) The term shall not include the renting or leasing of tangible
personal property where the lease or rental is for the purpose of
sublease or subrent.
(5) The term shall also include the providing of telephone service,
as defined in RCW 82.04.065, to consumers.
(6) The term shall also include the sale of prewritten computer
software other than a sale to a person who presents a resale
certificate under RCW 82.04.470, regardless of the method of delivery
to the end user, but shall not include custom software or the
customization of prewritten computer software.
(7) The term shall not include the sale of or charge made for labor
and services rendered in respect to 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 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.
(8) The term shall also not include sales of chemical sprays or
washes to persons for the purpose of postharvest treatment of fruit for
the prevention of scald, fungus, mold, or decay, nor shall it include
sales of feed, seed, seedlings, fertilizer, agents for enhanced
pollination including insects such as bees, and spray materials to:
(a) Persons who participate in the federal conservation reserve
program, the environmental quality incentives program, the wetlands
reserve program, and the wildlife habitat incentives program, or their
successors administered by the United States department of agriculture;
(b) farmers for the purpose of producing for sale any agricultural
product; and (c) farmers acting under cooperative habitat development
or access contracts with an organization exempt from federal income tax
under 26 U.S.C. Sec. 501(c)(3) or the Washington state department of
fish and wildlife to produce or improve wildlife habitat on land that
the farmer owns or leases.
(9) The term shall not include the sale of or charge made for labor
and services rendered in respect to the constructing, repairing,
decorating, or improving 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 article of tangible personal property
therein or thereto, whether or not such personal property becomes a
part of the realty by virtue of installation. Nor shall the term
include the sale of services or charges made for the clearing of land
and the moving of earth of or for the United States, any
instrumentality thereof, or a county or city housing authority. Nor
shall the term include the sale of services or charges made for
cleaning up for the United States, or its instrumentalities,
radioactive waste and other byproducts of weapons production and
nuclear research and development.
(10) Until July 1, 2003, the term shall not include the sale of or
charge made for labor and services rendered for environmental remedial
action as defined in RCW 82.04.2635(2).
Sec. 408 RCW 82.32.525 and 2003 c 168 s 211 are each amended to
read as follows:
(1) A purchaser's cause of action against the seller for over-collected sales or use tax does not accrue until the purchaser has
provided written notice to the seller and the seller has sixty days to
respond. The notice to the seller must contain the information
necessary to determine the validity of the request.
(2) In connection with a purchaser's request from a seller for
over-collected sales or use taxes, a seller shall be presumed to have
a reasonable business practice, if in the collection of such sales or
use taxes, the seller:
(a) Uses either a provider or a system, including a proprietary
system, that is certified by the state; and
(b) Has remitted to the state all taxes collected less any
deductions, credits, or collection allowances.
Sec. 409 RCW 82.08.080 and 1986 c 36 s 2 are each amended to read
as follows:
(1) The department of revenue may authorize a seller to pay the tax
levied under this chapter upon sales made under conditions of business
such as to render impracticable the collection of the tax as a separate
item and waive collection of the tax from the customer. Where sales
are made by ((receipt of a coin or coins dropped into a receptacle)) a
vending machine that results in delivery of the merchandise in single
purchases of smaller value than the minimum sale upon which a one cent
tax may be collected from the purchaser, according to the schedule
provided by the department under authority of RCW 82.08.060, and where
the design of the sales device is such that multiple sales of items are
not possible or cannot be detected so as practically to assess a tax,
in such a case the selling price for the purposes of the tax imposed
under RCW 82.08.020 shall be sixty percent of the gross receipts of the
vending machine through which such sales are made.
(2) No such authority shall be granted except upon application to
the department and unless the department, after hearing, finds that the
conditions of the applicant's business are such as to render
impracticable the collection of the tax in the manner otherwise
provided. The department, by ((regulation)) rule, may provide that the
applicant, under this section, furnish a proper bond sufficient to
secure the payment of the tax.
(3) "Vending machine" means a machine or other mechanical device
that accepts payment and:
(a) Dispenses tangible personal property;
(b) Provides facilities for installing, repairing, cleaning,
altering, imprinting, or improving tangible personal property; or
(c) Provides a service to the buyer.
Sec. 410 RCW 82.04.530 and 2002 c 67 s 3 are each amended to read
as follows:
For purposes of this chapter, a telephone business other than a
mobile telecommunications service provider must calculate gross
proceeds of retail sales ((by including all charges for network
telephone services originating from or received on telecommunications
equipment or apparatus in this state if the charge for the service is
billed to a person in this state)) in a manner consistent with the
sourcing rules provided in RCW 82.32.520. The department may adopt
rules to implement this section, including rules that provide a
formulary method of determining gross proceeds that reasonably
approximates the taxable activity of a telephone business.
NEW SECTION. Sec. 501 (1) Section 201 of 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 retroactively takes effect January 1, 2004.
(2) This act takes effect July 1, 2004, except section 201 of this
act.
Sec. 502 2003 c 168 s 902 (uncodified) is amended to read as
follows:
(1) If a court of competent jurisdiction enters a final judgment on
the merits that is based on federal or state law, is no longer subject
to appeal, and substantially limits or impairs the essential elements
of P.L. 106-252, 4 U.S.C. Secs. 116 through 126, or chapter 67, Laws of
2002, then chapter 67, Laws of 2002 is null and void in its entirety.
(2) If the contingency in subsection (1) of this section occurs,
section 502, chapter 168, Laws of 2003 is null and void.
(3) If the contingency in subsection (1) of this section occurs,
section 410, chapter . . ., Laws of 2004 (section 410 of this act) is
null and void.