WAC 102

Taxability of Credit Bureau Services. No longer needed, Cancelled effective 06/30/05. See ETA 2026

"Sale at retail," " retail sale."

"Sale at wholesale," " wholesale sale."

Resale Certificate--Burden of proof--Tax liability--Rules--Resale certificate defined.

Buyer to pay, seller to collect tax--Statement of tax--Exception--Penalties.

Administration.

Resale Certificate - Unlawful use-Penalty-Rules

Resale certificates. Amended, effective 9/9/04.

Resellers Permits WAC 458-20-102A Resale Certificates WAC 458-20-102 (Rule 102) currently explains the resale certificate and conditions under which a buyer may furnish a resale certificate to a seller. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale sales. Chapter 563, Laws of 2009. The Department of Revenue (Department) is amending Rule 102 to explain the reseller permit and conditions under which a buyer may furnish a reseller permit to a seller.

INTERVENING USE OF ARTICLES HELD FOR RESALE Revised 2/2/09 See ETA 3005.2009

Deferred Sales Tax Revised 2/2/09 See ETA 3097.2009

PURCHASE OF PERSONALTY FOR RESALE AS REALTY Revised 2/2/09 See ETA 3066.2009

Intervening Use

Intervening use. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

Purchase of personalty for resale as realty

Purchase of Personalty for Resale as Realty ETA 3066 and 3069 recite language from RCW 82.12.020. The Department has updated this language to reflect the changes to this statute by Section 206 of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143).

Retail Sales Tax-Charges for Towing Damaged or Inoperable Vehicles for Repair. ETA 3084.2011 Retail Sales Tax – Charges for Towing Damaged or Inoperable Vehicles for Repair. This Excise Tax Advisory (ETA) explains the limited circumstances under which the Department allowed towing companies to accept resale certificates or reseller permits from service stations or repair shops. A header was added to this ETA to explain that it applies to periods prior to July 1, 2010.

Deferred sales tax

Deferred sales tax. Effective January 1, 2010, reseller permits will replace resale certificates as the means to substantiate wholesale purchases. Chapter 563, Laws of 2009.

USE TAX IMPOSED WHERE PROPERTY NOT EXCLUSIVELY HELD FOR RESALE Revised 2/2/09 See ETA 3005.2009

SEEDLINGS USED IN REFORESTATION PROGRAMS - Cancelled by ETA 2003-3s 07/16/2001

Fireworks Sales, Distributors and Retail Sales by Nonprofit Organizations Tax Registration and Reporting Requirements Information Notice

Fireworks Sales: Distributors and Retail Sales by Nonprofit Organizations Tax Registration and Reporting Requirements Information Notice

Reseller Permits to Replace Resale Certificates

Tax Changes Relating to Vehicle Dealers

"New Buyers" Retail Sales Tax Exemption Certificate

RETAIL SALES TAX -- RESALE CERTIFICATE -- INTERVENING BAILMENT AND USE -- BUYER'S USE OF THE PROPERTY BOUGHT AS A BAILOR -- SELLER/BAILEE'S USE OF THE PROPERTY SOLD. The buyer of property, retained and used by the seller as a bailee, is ineligible to give a bona fide resale certificate. Sales tax applies to the sale even though the buyer intends to resell the property after the intervening use/bailment. Accord: ETB 114.

RETAIL SALES TAX -- PURCHASE FOR RESALE -- RENTAL EQUIPMENT -- OIL AND GREASE. Purchases of grease and oil used to lubricate machinery held exclusively for resale as either inventory or rentals are purchases for resale in the ordinary course of business. Therefore, they are not subject to retail sales tax.

SALES -- BLOOD-TISSUE --HOSPITALS -- RESALE -- PRESCRIPTION ITEMS. Sales of blood to hospital for resale to patients are sales of tangible personal property. As such, they are taxable under the wholesaling classification of the B&O tax, and not subject to retail sales tax. When the blood is sold directly to a patient pursuant to a prescription, it is a retail sale, but subject to the prescription drug exemption of RCW 82.08.0281.

PURCHASE FOR RESALE -- INVESTMENT -- INTERVENING USE. Cars and boats purchased for investment purposes were not acquired for resale. There was also evidence of significant intervening use.

SALES TAX -- USE TAX -- EXEMPTION -- RESALE -- INTERVENING USE. The purchase of tangible personal property for resale in the ordinary course of business, without intervening use, is not a retail sale. Intervening use by the purchaser, however, triggers deferred sales/use tax. Accord: Det. No. 87-298, 4 WTD 87, (1987); Det. No. 89-337, 8 WTD 59 (1989); Det No. 89-461, 11 WTD 21 (1989).

PURCHASE FOR RESALE -- INTERVENING USE. Use tax is owed on the purchase of two new cars ostensibly held for resale, where no sales tax was paid at the time of purchase, and where the purchaser made substantial intervening use of the cars by driving the cars.

RETAIL SALES TAX -- RESALE CERTIFICATE -- FARMER -- FEEDLOT. A feedlot which fattens its own cattle for longer than sixty days before selling them at wholesale will be treated as a farmer and may give its vendors resale certificates for its purchases of feed.

RESALE OF A RETAIL SERVICE -- RETAIL SALE TAX -- TOW CHARGES. Retail services are not capable of being purchased for resale. Charges for retail services are "retail sales", without regard to whether they are performed for consumers". The purchaser of automobile towing is responsible for paying retail sales tax on the charge.

RETAIL SALES TAX. -- RESALE CERTIFICATES, REASONABLE, TIME.

RETAIL SALES TAX -- RETAILING B&O TAX -- SALES FOR RESALE --INTERVENING USE --OWNER'S CONSUMPTION OF INVENTORY. The consumption by the taxpayer's owner of products that were purchased for resale results in the taxpayer being liable for retail sales tax on the purchases. However, because the products are not sold by the taxpayer, no B&O tax is due on such amounts.

RETAIL SALES TAX -- PURCHASE FOR RESALE -- DOMINION & CONTROL -- FIBER-OPTIC CABLE -- BAND WIDTHS. An owner of fiber-optic cable may not purchase the cable without payment of retail sales tax even though it rebills its customers for use of the cable in separately identifiable band widths and on a monthly basis. Under these circumstances, the owner does not relinquish possession and dominion and control of the cable to its customers.

RETAIL SALES TAX -- PURCHASE FOR RESALE -- DOMINION & CONTROL -- FIBER-OPTIC CABLE -- FIBER PAIRS. An owner of fiber-optic cable may not purchase the cable without payment of retail sales tax even though it rebills its customers for use of the cable in fiber pairs on a monthly basis. Under these circumstances, the owner does not relinquish possession and dominion and control of the cable to its customers.

USE TAX - TRUCKS - INTERVENING USE. A taxpayer who purchased a tanker truck and used it in business prior to leasing the vehicle to a lessee is not entitled to a refund of the use tax it paid upon initially registering the truck in Washington because of its intervening use of the vehicle before the lease.

RETAIL SALES TAX - RESALE CERTIFICATES - CONSTRUCTION: When a contractor's customers use the contractor's resale certificate to purchase materials and/or labor for use in home construction and pay the vendors directly, the contractor is liable for retail sales tax due on the transactions if the customers fail to pay retail sales tax to the vendors. Such transactions are considered retail sales of materials and/or labor by the contractor to the customers because of the use of the resale certificate.

RETAIL SALES TAX -- FINANCING LEASE. Financing leases are treated as installment sales. The Department considers all the factors set out in WAC 458-20-211(2)(g), and other critical portions of the lease documents, to determine whether an arrangement is a financing lease rather than a true lease.

RETAIL SALES TAX -- SALE/LEASEBACK -- INTERVENING USE. The Department may determine there was no "intervening use" for purposes of RCW 82.04.050, and therefore no retail sales tax was due on the initial purchase of equipment that was subsequently sold and leased back under a financing lease, when the documentary evidence and the parties' course of dealing establish that the taxpayer and the buyer/lessor agreed to the terms of a sale and leaseback before the taxpayer purchased the equipment, and the purchases were handled in accordance with that agreement.

DEDUCTION FOR RETAIL SALES TAXES PREVIOUSLY PAID. Where individuals purchase a yacht, properly paying retail sales tax, the corporation they transfer it to months later in a tax free transaction, is not entitled to the deduction for retail sales taxes previously paid under RCW 82.08.130.

RETAIL SALES TAX - LIQUID NITROGEN - CHERRIES -ASPARAGUS - DECAY. Sales of liquid nitrogen applied directly on post-harvest cherries to prevent decay are not retail sales. Sales of liquid nitrogen applied in a similar manner to asparagus are retail sales.

USE TAX - TRUCKERS - PALLETS - USED IN TRANSPORTING CARGO OR EXCHANGE. Where a trucker purchases pallets in order to carry cargo owned by others, it is purchasing the pallets for its own use and fully subject to retail sales tax. Where a trucker purchases pallets for immediate exchange to manufacturers without intervening use, it is purchasing the pallets for resale.

RETAIL SALES TAX -- EXCLUSION -- RESALE -- REGULAR COURSE OF BUSINESS. Purchase of property for resale as part of a planned business transaction qualifies as a purchase for resale "in the regular course of business" even though the buyer/seller is not regularly engaged in the business of dealing in such property.

SALES -- WHOLESALE OR RETAIL -- BURDEN OF PROOF. The burden of proving that a sale was not a retail sale is on the seller.

RETAIL SALES/USE TAX -- WHOLESALE/RESALE EXEMPTION -- CASUAL OR ISOLATED SALE -- REGULAR COURSE OF BUSINESS -- INTENT. Generally, tangible personal property acquired for resale is not subject to sales tax. Not so, however, where the property acquired and resold is not of the kind usually sold by a taxpayer and where the intent to resell was formed after acquisition.

RETAIL SALES/USE TAX -- CALENDARS -- RESALE. Gifts of tangible personal property to consumers constitute taxable use of that property by the donor. Calendars given to automobile purchasers are not resold so their acquisition by an auto dealer is subject to sales tax.

USE TAX - DEFERRED SALES TAX --VALUE - GIFT - CELLULAR PHONES: Use tax on cellular phones given away to promote cellular service commissions is measured by the donor's arm's length purchase price of the phones.

TAXPAYER RIGHTS AND RESPONSIBILTIES ACT -- ESTOPPEL. Despite the Taxpayer Rights and Responsibilities Act and ETA 419, oral instructions may give rise to estoppel. Emrich v. Connell, 105 Wn.2d 551, 716 P.2d 863 (1985). "Equitable estoppel" requires three main elements: (1) an admission, statement, or act inconsistent with the claim afterwards asserted; (2) an action by the other party on faith of such admission, statement or act; and (3) injury to such party resulting from allowing the first party to contradict or repudiate such admission, statement or act.

SALES AND USE TAX DEFERRAL -- APPLICATION BEFORE CONSTRUCTION. RCW 82.62.030 requires that applicants for sales/use tax deferrals apply for the program before construction begins. Taxpayers who apply after construction is finished are not eligible for the program. The fact that a taxpayer is not aware that an area has been designated as a distressed area before construction begins does not justify late application.

TAXPAYER RIGHTS AND RESPONSIBILITIES ACT. Taxpayers may not rely upon oral advice of Department employees.

RETAIL SALES TAX; USE TAX - RESALE CERTIFICATES - PURCHASES FOR DUAL PURPOSES - WITHDRAWAL FROM INVENTORY AND USE OUT OF STATE. The term "deferred sales tax" as used in WAC 458-20-102 means retail sales tax, not use tax.

RETAIL SALES TAX - RESALE CERTIFICATES - PURCHASES FOR DUAL PURPOSES - WITHDRAWAL FROM INVENTORY AND USE OUT OF STATE. A taxpayer who gives a valid resale certificate for articles it purchases, pursuant to RCW 82.08.130 and WAC 458-20-102(11) (purchases for dual purposes), and who subsequently withdraws some of the articles from inventory and distributes them outside the state as free samples, is liable for retail sales tax on the value of the samples distributed out of state.

RETAIL SALES TAX - "DEFERRED SALES TAX" - PURCHASES FOR DUAL PURPOSES. In a purchase for dual purposes situation in which a buyer gives a resale certificate as allowed by RCW 82.08.130 and WAC 458-20-102(11), and subsequently consumes some of the articles, the taxable event with respect to the articles consumed is the sale on which the buyer gave the resale certificate, not the subsequent use of the articles. The measure of the tax is the [selling] price of the articles purchased with a resale certificate and subsequently consumed.

RETAIL SALES TAX - "DEFERRED SALES TAX" - PURCHASES FOR DUAL PURPOSES. While WAC 458-20-102(11), dealing with purchases for dual purposes, instructs the buyer to report the "deferred sales tax liability" under the use tax classification on its excise tax return, the rule does not classify the tax liability as use tax. The term "deferred sales tax" as used in Rule 102 means retail sales tax.

SALES TAX - USE TAX -DEDUCTION -- SPRAY MATERIALS - PACKING MATERIALS. The definition of "packing materials" does not encompass spray materials. The definition of packing materials is limited to "materials in which tangible personal property may be contained or protected within a container, for transportation or delivery to a purchaser." Because the spray materials do not contain or protect the potatoes, nor are they used for transportation or delivery, spray materials do not qualify for the deduction

SALES TAX - USE TAX - DEDUCTION --CHEMICAL USED IN PROCESSING - SPRAY MATERIALS. Even if spray materials qualified as a "chemical" for purposes of the exemption, in this case their use appears to occur prior to any processing taking place because the potatoes are sprayed at the time of harvest, when they are put into storage.

RCW 82.08.02565: RETAIL SALES TAX--M&E EXEMPTION - CONCRETE MIXER TRUCKS - LEASES. Lessees of concrete mixer trucks must provide taxpayer/lessor with exemption certificates as prescribed in RCW 82.08.02565(1) and Rule 13601(4)(a) in order for the taxpayer not to collect tax on the leases.

RCW 82.08.020, RCW 82.04.250, RCW 82.04.270: WHOLESALE SALE -- RETAIL SALE - SALES OF PHOTOGRAPHIC EQUIPMENT. Sales to consumers by photographers or photofinishers of pictures, frames, cameras, films, and other articles are subject to the retail sales tax and retailing B&O tax. However, if such items are sold by the photographer or photofinisher to a buyer who purchases the items for resale and presents a valid resale certificate, the sales are subject to wholesaling B&O tax, and no retail sales tax is due on the sales.

RCW 82.08.020: RETAIL SALES TAX -- PURCHASES FOR RESALE -- PHOTOFINISHERS' AND PHOTOGRAPHERS' PURCHASES OF SUPPLIES AND EQUIPMENT. Photofinishers' and photographers' purchases of photographic paper and chemicals used in making prints are purchases for resale and are not subject to retail sales tax. However, photographers' and photofinishers' purchases of materials and equipment used in processing, whenever such materials do not become a component part of the final photograph or are not chemicals used in processing, are subject to the retail sales tax, unless an exemption applies.

RCW 82.04.470, RCW 82.08.020, RCW 82.08.050, RCW 82.32.070: RETAIL SALES TAX - SELLER'S LIABILITY FOR - FAILURE TO TAKE RESALE CERTIFICATES - RECORDKEEPING REQUIREMENTS. A seller is liable for retail sales tax with respect to sales for which no resale certificate has been provided. The burden of maintaining proper records rests with the taxpayer.

RCW 82.12: USE TAX - PIERCING CORPORATE VEIL - NOMINEES OR "DBAS." A taxpayer that conducts business through other entities and expressly represents those entities as being his nominees or "dbas" is liable for tax on transactions engaged in by his nominees or "dbas."

RCW 82.04.040: USE TAX - REPOSSESSION - SATISFACTION OF DEBT. In contrast to a secured creditor that repossesses motor vehicles, the voluntary transfer of motor vehicles to an unsecured creditor in satisfaction of a debt constitutes a transfer of ownership for valuable consideration.

RETAIL SALES TAX - WHOLESALE SALE - SALE FOR RESALE IN THE REGULAR COURSE OF BUSINESS. A wholesale sale is a sale to a person who presents a resale certificate under RCW 82.04.470 and who purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person. A taxpayer is not entitled to a refund of sales tax where it purchases a boat at retail but then decides to resell the boat. Accord: ETA 482.12.178.

RETAIL SALES TAX - DEFERRED SALES TAX - PURCHASES FOR DUAL PURPOSES. When a taxpayer that normally both consumes and sells tangible personal property issues a resale certificate for the entire purchase, as allowed by RCW 82.08.130 and WAC 458-20-102(11), retail sales tax liability is deferred until such time as the taxpayer withdraws the goods from inventory for its own use.

RETAIL SALES TAX - PAID AT SOURCE DEDUCTION - PURCHASES FOR DUAL PURPOSES. The deduction allowed by RCW 82.08.130 and WAC 458-20-102(11)(b) only applies to Washington retail sales tax paid on the original purchase. An out-of-state manufacturer/retailer that paid retail sales tax to another state on materials it purchased in that state and consumed in the manufacture of its products, is not entitled to claim a paid at source deduction when reporting Washington sales of the products on its Washington excise tax return.

STATUTE OF LIMITATIONS - FRAUD - EVASION. The statute of limitations was tolled by a fraudulent misstatement of fact. An owner of an airplane made a fraudulent misstatement of fact when it told the Department it had purchased the plane for resale only, when evidence demonstrated that the plane had been put to intervening use.

TAX PAID AT SOURCE - RECORDS - FAILURE TO MAINTAIN. A person who did not maintain invoices separately stating retail sales tax was not entitled to a presumption that retail sales tax was paid on taxable purchases, even though the person did maintain credit card receipts showing the total amounts paid, which ended in uneven cents suggesting the that total price included retail sales tax.

RETAIL SALES TAX -- RESALE CERTIFICATE -- PENALTY FOR MISUSE OF A RESALE CERTIFICATE. The penalty for misuse of a resale certificate was upheld where the taxpayer used a resale certificate to purchase housing under the farm worker housing exemption, and the housing did not qualify for the claimed exemption.

RETAIL SALES TAX -- TAX PAID AT SOURCE. A buyer who purchases items at retail, but later resells the items, may take a deduction for retail sales tax paid at source. However, a consumer of construction services may not claim a tax paid at source deduction for retail sales tax paid by its prime contractor to the prime contractor's suppliers and subcontractors.

USE TAX - PURCHASE FOR RESALE (LEASING) -- REGULAR COURSE OF BUSINESS. A corporation formed to purchase and lease an aircraft, which leases the aircraft to another business owned by an officer of the corporation, will owe neither retail sales tax on the purchase, nor use tax on the use, if the evidence establishes that the lessor is actually and regularly engaged in the business of leasing such articles, and the lease to the officer's business is not illusory.

RETAIL SALES TAX -- SPECULATIVE BUILDER -- PRIME CONTRACTOR -- CONSTRUCTION -- TAX PAID AT SOURCE. Contractors may deduct the construction purchases on which retail sales tax had been paid when they report the "resale" of those purchases.

RCW 82.32.291: - RESALE CERTIFICATE - DUAL PURPOSES - 50% PENALTY FOR IMPROPER USE. The 50% penalty for improper use of a resale certificate was properly imposed when the buyer was not entitled to use a resale certificate for dual purposes because it did not resell, without intervening use, more than 50% of the equipment it purchased.

RESALE CERTIFICATE - DUAL PURPOSES - ELIGIBILITY TO USE. The test of whether a resale certificate for dual purposes may be used must be applied against the "certain types of tangible personal property" involved - in this case, the equipment that a taxpayer purchased with the use of resale certificates.

RCW 82.32.291: RESALE CERTIFICATE - DUAL PURPOSES - 50% PENALTY FOR IMPROPER USE - PENALTY WAIVER. The penalty for improper use of a resale certificate may be waived when the use was due to circumstances beyond the control of the buyer. One situation in which waiver is appropriate is when a buyer makes a good faith effort to discover all of its deferred sales tax liability within 120 days of purchase and remits the discovered tax liability upon the next excise tax return.

RETAIL SALES -- WHOLESALE SALES -- RESALE CERTIFICATE. If a taxpayer who claims to be a wholesaler does not take a resale certificate from its buyer, the taxpayer has the burden of proving that each sale was wholesale. If that cannot be proved, retail sales tax may be assessed against the taxpayer.

RCW 82.04.050(3)(a); RCW 82.04.190(2): AMUSEMENT AND RECREATION ACTIVITIES FOR RESALE. A taxpayer can issue a resale certificate in circumstances where it subcontracts with a vendor to provide wholesale amusement and recreations services that it will, in turn, resell to consumers.

RULE 102; RCW 82.04.050(2008): RETAIL SALES TAX – RESALE CERTIFICATE – VESSEL. A boat purchaser, who did not present a resale certificate when he purchased the watercraft in Washington prior to July 1, 2008, and used the boat prior to leasing it, was liable for retail sales tax when the boat was delivered in Washington.

RULE 102, RULE 170; RCW 82.08.130, RCW 82.04.050, RCW 82.32.070, RCW 82.32A.030: – RETAIL SALES TAX – TAX PAID AT SOURCE DEDUCTIONS – RECORDS TO SUPPORT SUCH DEDUCTIONS. Taxpayer failed to maintain and provide the Department with records to support tax paid at source deductions it claimed. In addition, contrary to law, taxpayer erroneously claimed tax paid at source deductions against the measure of retailing business and occupation (B&O) tax it reported to the Department.

RULE 102; RCW 82.04.470: BUSINESS AND OCCUPATION (B&O) TAX – RETAIL SALES TAX – WHOLESALING – RETAILING – SUBSTANTIATION – RESELLER PERMIT – RESALE CERTIFICATE – FACTS AND CIRCUMSTANCES. Taxpayers objected to the reclassification of sales from wholesaling to retailing. Taxpayers did not provide required documentation to substantiate sales at wholesale. The Department denied Taxpayers’ petition, finding that Audit properly reclassified the sales at issue to retailing.

RULE 102 and 102A; RCW 82.04.470, RCW 82.08.020: RETAIL SALES TAX – BURDEN OF PROVING WHOLESALE SALES. Where the seller failed to meet its burden of proving that sales were at wholesale, Audit was justified in assessing retail sales tax and retailing B&O tax.

RULE 102 – RETAIL SALES/USE TAX – PAYMENT – LACK OF RESALE CERTIFICATE/RESELLER PERMIT -- BURDEN OF PROOF. In the absence of a resale certificate or reseller permit, a seller has the burden of proving that retail sales tax was either not due or has otherwise been paid.

RULE 102; RCW 82.08.130: RETAIL SALES TAX – TAX PAID AT SOURCE DEDUCTION – VENDING MACHINES. Purchases of vending machines by a vending machine operator are used in its business and are not resold. Those purchases are subject to the retail sales tax and are not eligible for a “tax paid at source” deduction.

RULE 102; RCW 82.32.291: RESELLER PERMITS – 50% PENALTY FOR IMPROPER USE. A taxpayer’s claim that it was acting in good faith when it made the error of using a reseller permit when purchasing materials for use in a U.S. Navy contract is not sufficient to merit a waiver of the penalty for improper use of a reseller permit, because the misuse was not due to circumstances beyond the taxpayer’s control.

RULE 102; RCW 82.04.050(3), RCW 82.04.470(1), RCW 82.08.050(1)(a): B&O AND RETAIL SALES TAX – MANUFACTURER’S SALES TO RETAIL BUSINESSES. A seller that does not obtain reseller permits from a buyer, or who has not proven by other means that a sales is wholesale in nature, is liable for retail sales taxes if such tax has not been charged, collected, and remitted.

RCW 82.08.130(2) – RETAIL SALES TAX – DEDUCTION – TAX PAID AT SOURCE – UNSUBSTANTIATED AMOUNTS. A taxpayer must be able to produce records to support a tax paid at source deduction.

Rule 102; RCW 82.04.470: B&O TAX - RETAIL SALES TAX - WHOLESALING - RETAILING - RESELLER PERMIT - SUBSTANTIATION. A taxpayer objected to the reclassification of sales from wholesaling to retailing. The Taxpayer did not provide required documentation to substantiate sales at wholesale. The Department denied Taxpayer’s petition, finding that Audit properly reclassified the sales at issue to retailing.

RULE 102; RCW 82.32.291: PENALTY – MISUSE OF RESELLER PERMIT – ELECTRONIC DATABASE. The penalty for the misuse of a reseller penalty is applicable to retail sales of products in Washington when the buyer was unable to provide evidence that its vendors did not previously use electronic means to look up the purchaser’s reseller permit.

RULE 102; RCW 82.32.291: PENALTY – MISUSE OF RESELLER PERMIT – OUT-OF-STATE PICK-UP. The penalty for the misuse of a reseller penalty is not applicable to products not subject to sales tax when the purchaser picked-up the products at an out-of-state location.

B&O TAX -- RETAIL SALES TAX -- PHYSICIANS -- DRUGS. When a physician administers a drug via injection to treat an allergic patient, the physician is considered to have sold the drug as tangible personal property if he itemizes the charge. Such activity is considered a retail sale, which is separate, from the rendering of professional services. The physician's acquisition of the drug is for resale so is not subject to retail sales tax.

RETAIL SALES TAX -- REFUND. Tax, interest and penalties deleted on transactions for which the taxpayer subsequently provided evidence that the sales were for resale, or were sales made to an out-of-state buyer, or that the purchasers had paid the sales or use tax owing directly to this state.

RETAIL SALES TAX -- TIME AND PLACE OF SALE -- DELIVERY IN WASHINGTON -- PROPERTY USED EXCLUSIVELY OUTSIDE OF WASHINGTON. The sale of property delivered in Washington is subject to retail sales tax regardless of the fact that the property will be used outside of Washington.

USE TAX -- EXCLUSION -- RESALE CERTIFICATES -- SUBSTANCE OVER FORM. In determining tax liabilities under the law the Department of Revenue elevates substance over form but does not ignore the formal agreements, documents, and transactions which reveal the substantive benefits derived. One of the primary substantive effects of lease of tangible personal property to a registered business for its business use (bare-boat chartering) is the legal capacity of the business to purchase materials for resale through resale certificates, sans sales tax.

B&O TAX -- PHYSICIANS -- DRUGS. The sale and administration of drugs by a physician to a patient is exempt of retail sales tax because of the prescription drug exemption, but it is subject to Service B&O tax rather than Retailing B&O because it is part of the medical services rendered by the physician. Department of Rev. v. Deaconess Hospital, No. 6098-I-II, Division Two, January 5, 1984.

RETAIL SALES TAX -- SALES FOR RESALE -- NATURE OF TRANSACTION SHOWING SALES WERE WHOLESALE -- RESALE CERTIFICATE. Where taxpayer sold used equipment to two businesses registered in this state as dealers selling equipment and retained possession of the equipment until the dealers sold the equipment to third parties, the nature of the transaction supported a finding the sales were wholesale. The fact that the taxpayer only had a resale certificate at the time of the sale from one of the dealers, and the certificate was more than four years old, was not controlling.

RETAIL SALES TAX -- EXEMPTION -- RESALE OF TELEPHONE SERVICE -- RESALE CERTIFICATE. Where taxpayer resells telephone service, it can furnish its seller with a resale certificate and be exempt from retail sales tax charges by its seller.

RETAIL SALES TAX -- RESALE -- REGULAR COURSE OF BUSINESS. Assessment of retail sales tax on vehicles upheld where taxpayer was unable to provide evidence that the purchasers paid use tax when the vehicles were licensed. A seller who fails to collect the retail sales tax is personally liable to the state for the amount of tax. Purchase of a boat allegedly for resale by a business registered as an auto wholesale business was subject to retail sales tax, as it was not a purchase in the regular course of business.

RETAIL SALES TAX -- USE TAX -- RESALE CERTIFICATE. Persons purchasing taxable items for their own use are required to pay sales tax at the time of the purchase or use tax at the time of the item is used. Taxpayer carries the burden of proving entitlement to exemption from taxability. Where a resale certificate is improperly used or where receipts are not produced showing separate statement of sales tax paid, taxpayer is liable for use tax on the items purchased.

EVASION PENALTY -- RESALE CERTIFICATE -- MISUSE OF. A husband and wife gave a resale certificate in the name of their corporate business to a contractor in connection with the construction of their personal residence. The certificate was found to be presented under false and knowingly misleading circumstances. Evasion penalty affirmed.

RETAIL SALES TAX -- EXEMPTION -- PURCHASES FOR RESALE IN THE REGULAR COURSE OF BUSINESS. Sellers who accept resale certificates are liable for the sales tax due if they fail to exercise reasonable diligence to ascertain whether the resale certificate is tendered by a person for goods to be resold in the regular course of business or whether the certificate is valid under Rule 102. THIS DETERMINATION HAS BEEN OVERRULED OR MODIFIED IN WHOLE OR PART BY DET.NO. 94-057, 16 WTD 160 (1996).

INTERNAL DISTRIBUTIONS TAX -- DEFINITION OF WHOLESALE -- RESALE CERTIFICATE. The acceptance in "good faith" of a valid resale certificate does not conclusively determine the character of a sale, (i.e.. wholesale or retail), but only relieves the vendor from the responsibility of collecting retail sales tax on the transaction. The actual test is whether the item was in fact purchased for resale in the regular course of business without intervening use.

RETAIL SALES TAX -- TANGIBLE PERSONAL PROPERTY - SPECULATIVE BUILDER - PURCHASE FOR RESALE -- TURN KEY PROJECT. Retail sales or use tax does not apply to the purchases of tangible personal property, as furniture, equipment, etc., purchased by a speculative builder as part of a "turn key" project, if the property was purchased solely for resale in the regular course of business without intervening use by the builder.

RETAIL SALES TAX -- RESALE CERTIFICATE -- FAILURE TO OBTAIN -- BURDEN OF PROOF. Where a seller fails to secure a resale certificate at the time of sale, it has the burden of proving that the property was purchased for resale and that the purchaser was eligible to give a bona fide resale certificate. Where the purchaser gives an invalid registration number, or was not registered at the time of the sale, the seller has not sustained that burden.

RETAIL SALES TAX -- EXEMPTION -- BLANKET RESALE CERTIFICATE -- WHOLESALER, JOBBER OR RETAILER --GOOD FAITH. A blanket resale certificate, valid for up to four years, may be given in advance by known wholesalers, jobbers or retailers to qualify for sales tax exemption but seller must exercise good faith in determining whether buyer is purchasing for resale in the regular course of business. It is incumbent upon the taxpayer-seller to get sufficient information about the buyer so that it meets the condition that it accepted the resale certificate in good faith.

SALES TAX -- RESALE CERTIFICATE -- PURCHASES FOR A DUAL PURPOSE. A taxpayer who purchases items for both resale and consumption and gave a resale certificate for all purchases is liable for deferred sales tax on items that were not resold, but delivered to taxpayers in Washington.