WAC 110

"Gross proceeds of sales."

Definitions.

Freight and delivery charges.

Freight and delivery charges. Effective 12/14/91

These rules all refer to resale certificates. Proposed action is to add standard language to recognize reseller permits for sales made on or after January 1, 2010.

RETAIL SALES TAX -- FREIGHT CHARGES. Freight charges recovered by sellers are part of gross sales proceeds and may not be deducted from the measure of the seller's B&O tax and retail sales tax.

RETAIL SALES TAX -- FREIGHT CHARGES -- ADVANCES AND REIMBURSEMENTS. In general, shipping charges incurred by a retailer prior to the completion of the sale are part of the costs of doing business and cannot be deducted from the amount subject to retail sales tax.

RETAIL SALES TAX -- B&O TAX -- DEDUCTIONS -- POSTAGE -- FREIGHT AND DELIVERY COSTS -- MAILING BUREAUS. Postage costs, but not freight and delivery costs, incurred by mailing bureau that are charged to its customers are deductible from the measure of the B&O tax and retail sales tax.

B&O TAX - RETAIL SALES TAX - MAILING SERVICES. Mailing services, meaning the mailing of packages for customers, are not retail sales.

RETAIL SALES TAX -- MAGAZINE SUBSCRIPTIONS -- PROCESSING AND HANDLING FEES. Processing and handling fees charged to buyers of magazine subscriptions in addition to the magazine subscription charge are part of the measure of the selling price and fully subject to retail sales tax.

RETAIL SALES TAX -- MAGAZINE DISTRIBUTOR -- PARTY RESPONSIBLE FOR COLLECTING. A magazine clearinghouse that operates under independent distributor agreements authorizing it to market magazines to the general public, and that contracts with independent sales organizations to sell subscriptions door to door, is a "distributor" for purposes of WAC 458-20-127, and is the one responsible for the collection and payment of the retail sales tax.

B&O TAX -- MEASURE OF TAX ON EXCHANGE AGREEMENTS -- HANDLING FEES. When a taxpayer charges its customer a handling fee when it sells (exchanges) products, the handling fee is part of the measure of the selling price and taxed under the same B&O tax classification as the product sale (wholesaling or retailing).

B&O TAX -- DEDUCTION -- FREIGHT CHARGES. Freight charges recovered by sellers are part of gross sales proceeds and may not be deducted from the measure of the seller's business and occupation tax.

RULE 110, RCW 82.08.010, RCW 82.08.010 - LATE ORDER CHARGES - GROSS PROCEEDS OF SALES - SELLING PRICE: Charges for late orders which incur additional fees and postage charges fit within the statutory definition of “delivery costs” and are therefore to be included as part of the taxable selling price.

RULE 110, RULE 111; RCW 82.04.070, RCW 82.08.010: BUSINESS AND OCCUPATION TAX - RETAIL SALES TAX - GROSS PROCEEDS OF SALES - SALES PRICE - DEDUCTIONS - DELIVERY CHARGES - THIRD-PARTY SHIPPER - LIABILITY FOR PAYMENT - PRIMARY - SECONDARY. The Department determined that the taxpayer failed to show it had no primary or secondary liability for delivery charges the taxpayer paid to a third-party shipper then billed back to its customers.

DELIVERY CHARGES -- RUSH SERVICES -- GROSS PROCEEDS OF SALES -- SELLING PRICE: Charges for "rush services" are "delivery costs" which are to be included as part of the measure of both the B&O tax and the retail sales tax.

DELIVERY CHARGES -- ESCROW BUSINESS -- RUSH SERVICES -- GROSS PROCEEDS OF SALES -- SELLING PRICE: Charges for "rush services" are "delivery costs" which are to be included as part of the measure of both the B&O tax and the retail sales tax. See Det. 88-21, 5 WTD 49 (1988).