Subject of Possible Rule Making: WAC 458-20-18801 Prescription drugs, prosthetic and orthotic devices, ostomic items, and medically prescribed oxygen Drugs prescribed for human use, medically prescribed oxygen, prosthetic devices, and durable medical equipment.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300, and 82.01.060(2).

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: WAC 458-20-18801 (Rule 18801) provides guidelines for determining if the sale or use of a medical substance or item (drugs prescribed for human use, medically prescribed oxygen, prosthetics devices, and durable medical equipment) is subject to retail sales or use tax. In 2003, the legislature adopted the medical definitions set forth in the national streamlined sales and use tax agreement. These changes become effective July 1, 2004. The department anticipate revising Rule 18801 to provide guidance regarding the new definitions and the tax implications of the legislation.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

     Process for Developing New Rule: Modified negotiated rule making.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, e-mail, fax, or at the public meeting. Oral comments will be accepted at the public meeting. The department anticipates that a preliminary discussion draft of a possible new or revised rule(s) will be available on September 12, 2003. Written comments on and/or requests for copies of the draft may be directed to Cindy Evans, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 570-6134, e-mail CindyEV@dor.wa.gov, fax (360) 664-0693.

     Date and Location of Public Meeting: Capital Plaza Building, 4th Floor Large Conference Room, 1025 Union Avenue S.E., Olympia, WA, on October 8, 2003, at 1:30 p.m.

     Assistance for Persons with Disabilities: Contact Sandy Davis no later than ten days before the hearing date, TTY 1-800-451-7985 or (360) 725-7499.

September 3, 2003

Alan R. Lynn

Rules Coordinator

Legislation and Policy Division

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