INTERPRETIVE STATEMENT
The Department of Revenue cancelled the following Excise Tax Advisories effective September 14, 2001.
ETA 020.08.103 Catalogues purchased within the state for
distribution without
This document explains that retail sales tax is due on the purchase of catalogues and price lists if delivery is taken in Washington, even if the catalogues and price lists are subsequently distributed outside the state. This document is no longer needed. WAC 458-20-193(6) (Inbound and outbound interstate sales of tangible personal property) currently explains that sales tax applies when goods are delivered instate, even if the purchaser may use the goods elsewhere.
ETA 088.04.111 Deduction of advances and reimbursements
This document explains that amounts received by a person primarily responsible and liable for paying the salaries of ticket sellers, service employees, and maintenance employees at an event are subject to tax. These amounts do not qualify as an "advance" or "reimbursement" even if no profit is realized.
While this document provides accurate information, it is no longer needed. WAC 458-20-111 Advances and reimbursements, currently explains that the terms "advance" and "reimbursement" apply only when a taxpayer has no personal liability, either primarily or secondarily, other than as [an] agent for a customer or client for the payment of fees or costs. In addition, Det. 89-275, 11 WTD 013, addresses a situation where a nonprofit organization arranges luncheons, seminars, and meetings, and explains that amounts received by the organization from its members or other persons are not true reimbursements when the organization is liable for payment of the services.
ETA 162.04.193 Cartage, storage and handling of goods moving in
interstate commerce
ETA 175.04.193 Local services connected with interstate transactions
ETA 162 explains that cartage, storage, and handling (of liquor in the present situation) are purely local activities even if the goods are moving in interstate commerce at the time the services are performed. ETA 175 explains that arranging for the shipping, receiving, and handling of goods are local activities regardless that the activities may be closely connected with interstate commerce. Income derived from these local activities is subject to the B&O tax. These documents are no longer needed. WAC 458-20-193D Transportation, communication, public utility activities, or other services in interstate and foreign commerce, sufficiently addresses the taxability of these activities.
ETA 179.08.103 Credit bureau business, charges for credit
information, and the retail sales tax
This document explains that the term "credit bureau business" encompasses all persons receiving income from furnishing credit information. The manner in which the information is secured is deemed immaterial. While this information is correct, Det. 89-89R, 13 WTD 9 (1993), provides a much more comprehensive explanation of what is encompassed by "credit bureau business."
ETA 283.08.211 Sales tax liability on lease-purchase agreements
This document explains that when a lessee receives title to leased property under a lease-purchase plan, sales tax applies only on the additional consideration paid over and above the amount of the rental payments. It also explains that sales tax applies to gross income, which includes amounts for interest or carrying charges and property taxes that are paid by the lessee. ETA 283 is no longer needed. WAC 458-20-211 Leases or rentals of tangible personal property, bailments, was revised in 1996 in part to address these issues.
ETA 360.08.237 Retail sales tax: Constitutional issues
This document explains that there are no constitutional issues with respect to RCW 82.08.050's requirement that businesses account for and pay over sales taxes due from their customers. This document is no longer needed.
ETA 397.04.140 Photofinishing for out-of-state customers
This document explains that photofinishing is a manufacturing activity subject to the manufacturing or processing for hire B&O tax. WAC 458-20-140 Photofinishers and photographers, currently provides this information. The ETA is also not entirely accurate as it excludes information on how manufacturers report multiple activities and claim a multiple activities tax credit (MATC).
ETA 506.04.193B Nexus presumption
ETA 508.04.193B Nexus: Employees of seller's agent
ETA 509.04.193B Business and occupation tax on local services of nonselling resident managers
These documents identify specific situations/activities in which an out-of-state seller establishes nexus within this state and is subject to the B&O tax.
| • | ETA 506 explains that nexus for one sale is nexus for subsequent sales to the same customer unless the seller can prove disassociation. It also explains that the burden of proving disassociation rests solely with the taxpayer. |
| • | ETA 508 explains that sufficient nexus exists when the order for goods is solicited in this state by an agent or other representative of the seller. In the present situation, a parent company establishes nexus when an employee salesperson of a wholly-owned subsidiary solicits sales for the parent. |
| • | ETA 509 explains that the B&O tax applies where an out-of-state seller, either directly or by an agent or other representative, performs significant services in relation to establishing and maintaining sales into the state, even though the seller may not have formal sales offices in Washington or the agent or representative may not be formally characterized as a "salesman." In the present situation, public relations and marketing services performed for franchisees by instate nonselling resident managers establish nexus. |
ETA 520.04.211 Water conditioning services
This document explains that income from an agreement in which the seller agrees to rent property and perform some service in connection with that property (in the present situation the rental of a water softener with periodical servicing) is a retail sale. This document is no longer needed. WAC 458-20-211 Leases or rentals of tangible personal property, bailments, adequately addresses the taxability of these types of agreements.
ETA 537.04.19301 Effective date for claiming MATC credits
This document notes that WAC 458-20-19301 Multiple activities tax credits, explains that the MATC for products manufactured in Washington and sold and delivered outside the state is June 1, 1987, and the date for all other credits is August 12, 1987. ETA 537 explains that all credits may be taken for periods on and after June 1, 1987. This document is no longer needed. The 1987 dates are outside the statutory claim period provided by RCW 82.32.050.
ETA 560.04.193 Delivery - Goods originate outside Washington
This document provides tax-reporting information for certain interstate sales and deliveries completed prior to January 1, 1992. Readers are referred to WAC 458-20-193 Inbound and outbound interstate sales of tangible personal property, for determining taxability on and after this date. This information is no longer needed because it addresses transactions outside the statutory claim period provided by RCW 82.32.050.
Questions regarding the cancellation of these advisories may be directed to Alan R. Lynn, Legislation and Policy, P.O. Box, 47467, Olympia, WA 98504-7467, phone (360) 570-6125, fax (360) 664-0693, Internet alanl@dor.wa.gov.
Claire Hesselholt
Policy Counsel