WAC 115

"Gross proceeds of sales."

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.

Sales of packing materials and containers.Effective 10/3/93

B&O & USE AND/OR DEFERRED SALES TAX -- PALLETS -- GENERIC -- SELLING PRICE OF PRODUCT.Separately itemized charges for generic pallets were found to be part of the selling price of the product sold.Pallet purchases by the seller are for resale and not subject to use and/or deferred sales tax.

USE AND/OR DEFERRED SALES TAX -- PALLETS --SECURITY DEPOSIT VS. SALE -- IDENTIFIED OWNER.A separately itemized charge for shipping pallets imprinted with the originating brewery's name was found to be a refundable security deposit and not part of the selling price of the product sold.Washington distributors receiving and using those pallets for storage and delivery were found to be bailees and subject to use tax on the reasonable rental value of that use.

SALE AT WHOLESALE -- WHAT CONSTITUTES.Taxable sales at wholesale result when dealership resells wheels and axles back to the manufacturer after they are used to deliver mobile homes.Resales of wheels and axles are not returns on deposit because the dealership acquires ownership.ACCORD: ETB 167.04.115 and Inland Dairy v Department of Revenue, 14 Wn. App 592 (1975).

SALES FOR RESALE--PACKING CONTAINERS.The actual containers in which blood is resold are purchases for resale and not subject to the retail sales tax or use tax.

BEER KEGS - RETURNABLE BEVERAGE CONTAINERS - EXEMPTIONS. An out-of-state brewing company purchases and uses beer kegs to store and deliver its beer, which it sells wholesale to its distributors and retail to taverns and other customers. The brewing company is not required to pay either retail sales tax when it purchases the kegs or use tax when it delivers the kegs to its customers, provided the brewing company charges its customers a refundable deposit on each keg.

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.

B&O TAX -- PACKING MATERIALS -- PALLETS -- VALUE OF PRODUCTS MANUFACTURED.A manufacturer's separately-itemized charges for shipping pallets on which the manufacturer's product is held for sale, where title to the pallets passes to the customer upon delivery, are part of the value of the products manufactured, and therefore are part of the measure of the manufacturing B&O 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

USE TAX - DUNNAGE - PACKING MATERIALS - STEVEDORING COMPANY - BAILMENT TO.Where water-borne interstate carriers bail dunnage and packing materials to a stevedoring company that applies the items to secure outbound cargo, the stevedoring company is liable for use tax on the bailed items, based on their reasonable rental value, which will be pro-rated if the items are also used by others.

RETAIL SALES TAX -- CONSUMER -- BAILMENT -- PALLETS.If a manufacturer uses pallets to transport goods to buyers, who temporarily possess the pallets under a bailment arrangement, the manufacturer is a consumer of the pallets and owes retail sales tax or use tax.If a manufacturer uses the pallets as part of its packaging of goods and does not retain title to the pallets, the pallets are purchased for resale, and it does not owe retail sales or use tax.When a taxpayer has the right to have the pallets returned and by agreement accepts like-kind pallets the transaction involves a bailment, rat

RCW 82.08.0282, RCW 82.12.0276:RETAIL SALES TAX - USE TAX - RETURNABLE CONTAINERS FOR FOOD AND BEVERAGES.Wire baskets used to transport egg crates are not exempt from sales and use tax as "returnable containers for beverages and foods.""Containers for beverages and foods" refers to containers in which the beverages and foods are sold to the ultimate customer, and the wire baskets do not directly contain the eggs.Neither are the wire baskets "returnable," since they are not sold along with their contents to the customer, but are merely "re-used" by the taxpayer to transport eggs.

RCW 82.08.935: RETAIL SALES TAX – EXEMPTION – SALE OF DISPOSABLE DEVICE USED TO DELIVER PRESCRIPTION DRUG. The sale of packaging materials for packaging drugs prior to dispensing the drugs to a patient pursuant to a prescription is not a sale of disposable delivery devices used to deliver drugs exempt from retail sales tax under RCW 82.08.935.

B&O -- CUSTOM OR COMMERCIAL PACKING -- MANUFACTURING ACTIVITY AS PART OF SERVICE RENDERED.Where the rendition of custom packing services also involves some activities which, when isolated, would be considered "manufacturing" activities, there must be a clearly separate and distinct commercial or industrial use of the manufactured article in order for multiple tax liability to arise.

USE TAX -- PACKING MATERIALS -- USE BY PROCESSORS FOR HIRE.The use of articles of tangible personal property solely as packing materials by processors for hire is not subject to use tax.

B&O TAX -- COLD STORAGE WAREHOUSING -- CUSTOM OR COMMERCIAL PACKING --PACKING OF FISH.The activity of placing fish into standard sized boxes is subject to business and occupation tax under the cold storage warehousing classification when performed by the operator of the cold storage warehouse where the fish have been stored.It is not custom or commercial packing because it is within the activity of operating a cold storage warehouse.

USE TAX -- PACKING MATERIALS -- PACKING OF FISH BY PERSONS OPERATING COLD STORAGE WAREHOUSES.Persons operating cold storage warehouses under the facts described in this case are not liable for use tax on their use of packing materials in which customers' fish are placed prior to withdrawal from storage. Such persons are in the same position as processors for hire.