(101)
Definitions. For the purposes of this rule, the following
definitions apply:
(a)
"Actual
price" means the total amount of consideration for which tobacco
products are sold, valued in money, whether received in money or otherwise,
including any charges by the seller necessary to complete the sale such as
charges for delivery, freight, transportation, or handling.
(b)
"Affiliated" means related
in any way by virtue of any form or amount of common ownership, control,
operation, or management.
(c)
"Board" means the liquor and cannabis board.
(d)
"Business" means any trade,
occupation, activity, or enterprise engaged in for the purpose of selling or
distributing tobacco products in this state.
(e)
"Cigar" means a roll for
smoking that is of any size or shape and that is made wholly or in part of
tobacco, irrespective of whether the tobacco is pure or flavored, adulterated
or mixed with any other ingredient, if the roll has a wrapper made wholly or in
greater part of tobacco. "Cigar" does not include a cigarette.
(f)
"Cigarette" has the same
meaning as in
RCW
82.24.010.
(g)
"Department" means the
department of revenue.
(h)
"Distributor" means:
(i) Any
person engaged in the business of selling tobacco products in this state who
brings, or causes to be brought, into this state from without the state any
tobacco products for sale;
(ii) Any
person who makes, manufactures, fabricates, or stores tobacco products in this
state for sale in this state;
(iii)
Any person engaged in the business of selling tobacco products from outside
this state who ships or transports tobacco products to retailers in this state,
to be sold by those retailers;
(iv)
Any person engaged in the business of selling tobacco products in this state
who handles for sale any tobacco products that are within this state but upon
which tax has not been imposed.
RCW
82.26.010(8). (For example,
Sunshine Tobacco Shop ("Sunshine") buys cigars from an out-of-state
manufacturer for resale to consumers in this state. The cigars are shipped to
Sunshine via common carrier. In this instance, Sunshine is a distributor, must
have both a tobacco distributor license and a tobacco products retailer
license, and must pay the tobacco products tax on the products it brings into
the state. However, if Sunshine bought its merchandise exclusively from
in-state distributors that have paid the tobacco products tax on that
merchandise, Sunshine would not be considered a distributor, and would need
only a tobacco products retailer license.)
(i)
"Indian," "Indian country,"
and "Indian tribe" have the same meaning as defined in chapter
82.24 RCW and WAC
458-20-192.
(j)
"Indian distributor" means a
federally recognized Indian tribe or tribal entity that would otherwise meet
the definition of distributor under
RCW
82.26.010, if federally recognized Indian
tribes and tribal entities were not excluded from the definition of "person" in
RCW
82.26.010.
(k)
"Indian retailer" means a
federally recognized Indian tribe or tribal entity that would otherwise meet
the definition of retailer under
RCW
82.26.010, if federally recognized Indian
tribes and tribal entities were not excluded from the definition of "person" in
RCW
82.26.010.
(l)
"Indian tribal organization"
means a federally recognized Indian tribe, or tribal entity, and includes an
Indian distributor or retailer that is owned by an Indian who is an enrolled
tribal member conducting business under tribal license or similar tribal
approval within Indian country.
(m)
"Little cigar" means a cigar that has a cellulose acetate
integrated filter.
(n)
"Manufacture" means the production, assembly, or creation of new
tobacco products. For the purposes of this rule, "manufacture" does not
necessarily have the same meaning as provided in
RCW
82.04.120.
(o)
"Manufacturer" means a
person who manufactures and sells tobacco products.
(p)
"Manufacturer's
representative" means a person hired by a manufacturer to sell or
distribute the manufacturer's tobacco products, and includes employees and
independent contractors.
(q)
"Moist snuff" means tobacco that is finely cut, ground, or
powdered; is not for smoking; and is intended to be placed in the oral, but not
the nasal, cavity.
(r)
"Person" means any individual, receiver, administrator, executor,
assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint
venture, club, company, joint stock company, business trust, municipal
corporation, the state and its departments and institutions, political
subdivision of the state of Washington, corporation, limited liability company,
association, society, any group of individuals acting as a unit, whether
mutual, cooperative, fraternal, nonprofit, or otherwise. The term excludes any
person immune from state taxation, including the United States or its
instrumentalities, and federally recognized Indian tribes and enrolled tribal
members, conducting business within Indian country. For purposes of
RCW
82.26.200(1), in the case of
sales from distributors to retailers, as discussed in subsection (205) of this
rule, "person" also includes any person immune from state taxation, such as the
United States or its instrumentalities, and federally recognized Indian tribes
and enrolled tribal members, conducting business within Indian
country.
(s)
"Place of
business" means any place where tobacco products are sold or where
tobacco products are manufactured, stored, or kept for the purpose of sale,
including any vessel, vehicle, airplane, train, or vending machine.
(t)
"Retailer" means any person
engaged in the business of selling tobacco products to ultimate
consumers.
(u)
"Retail
outlet" means each place of business from which tobacco products are
sold to consumers.
(v)
"Sale" means:
(i) Any transfer,
exchange, or barter, in any manner or by any means whatsoever, for a
consideration, and includes and means all sales made by any person.
(ii) The term "sale" includes a gift by a
person engaged in the business of selling tobacco products, for advertising,
promoting, or as a means of evading the provisions of chapter 82.26
RCW.
(w)
"Store,"
"stores," or
"storing" means the holding of tobacco
products for later sale or delivery inside or outside this state. For example:
(i) Wilderness Enterprises ships products
from out-of-state to its Kent warehouse. All products are intended for future
sale to Alaska. Wilderness Enterprises is a distributor that stores tobacco
products in this state. Wilderness Enterprises is liable for tobacco products
tax on the products stored in this state. (However, see subsection (501)(a) of
this rule for credits that may be available to Wilderness Enterprises for
out-of-state sales.)
(ii) Cooper
Enterprises brings tobacco products into this state for sale. It rents storage
space from a third party, Easy Storage. Cooper Enterprises (the distributor),
not Easy Storage, is responsible for the tax and reporting requirements on the
stored tobacco products.
(x)
"Taxable sales price" means:
(i) In the case of a taxpayer that is not
affiliated with the manufacturer, distributor, or other person from whom the
taxpayer purchased tobacco products, the actual price for which the taxpayer
purchased the tobacco products. For purposes of this subsection, "person"
includes both persons as defined in (r) of this subsection and any person
immune from state taxation, including the United States or its
instrumentalities, and federally recognized Indian tribes and enrolled tribal
members, conducting business within Indian country;
(ii) In the case of a taxpayer that purchases
tobacco products from an affiliated manufacturer, affiliated distributor, or
other affiliated person, and that sells those tobacco products to unaffiliated
distributors, unaffiliated retailers, or ultimate consumers, the actual price
for which that taxpayer sells those tobacco products to unaffiliated
distributors, unaffili-ated retailers, or ultimate consumers. For purposes of
this subsection, "person" includes both persons as defined in (r) of this
subsection and any person immune from state taxation, including the United
States or its instrumentalities, and federally recognized Indian tribes and
enrolled tribal members, conducting business within Indian country;
(iii) In the case of a taxpayer that sells
tobacco products only to affiliated distributors or affiliated retailers, the
price, determined as nearly as possible according to the actual price for which
other distributors sell similar tobacco products of like quality and character
to unaffiliated distributors, unaffil-iated retailers, or ultimate
consumers;
(iv) In the case of a
taxpayer that is a manufacturer selling tobacco products directly to ultimate
consumers, the actual price for which the taxpayer sells those tobacco products
to ultimate consumers;
(v) In the
case of a taxpayer that has acquired tobacco products under a sale as defined
in (v)(ii) of this subsection, the price, determined as nearly as possible
according to the actual price for which the taxpayer or other distributors sell
the same tobacco products or similar tobacco products of like quality and
character to unaffiliated distributors, unaffiliated retailers, or ultimate
consumers; or
(vi) In any case
where (x)(i) through (v) of this subsection do not apply, the price, determined
as nearly as possible according to the actual price for which the taxpayer or
other distributors sell the same tobacco products or similar tobacco products
of like quality and character to unaffiliated distributors, unaffiliated
retailers, or ultimate consumers.
(y)
"Taxpayer" means a person
liable for the tax imposed by chapter 82.26 RCW.
(z)
"Tobacco products" means
cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready
rubbed, and other smoking tobacco, snuff, snuff flour, cavendish, plug and
twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps,
clippings, cuttings and sweepings of tobacco, and other kinds and forms of
tobacco, prepared in such manner as to be suitable for chewing or smoking in a
pipe or otherwise, or both for chewing and smoking, and any other product,
regardless of form, that contains tobacco and is intended for human consumption
or placement in the oral or nasal cavity or absorption into the human body by
any other means, but does not include cigarettes as defined in
RCW
82.24.010.
(aa)
"Unaffiliated distributor"
means a distributor that is not affiliated with the manufacturer, distributor,
or other person from whom the distributor has purchased tobacco
products.
(bb)
"Unaffiliated
retailer" means a retailer that is not affiliated with the manufacturer,
distributor, or other person from whom the retailer has purchased tobacco
products.
(102)
Imposition of tax. The tobacco tax is imposed upon the sale,
handling, or distribution of all tobacco products in this state. Taxes are
imposed at the time the distributor (a) brings, or causes to be brought, into
this state from without the state tobacco products for sale; (b) makes,
manufactures, fabricates, or stores tobacco products in this state for sale in
this state; (c) ships or transports tobacco products to retailers in this
state, to be sold by those retailers; or (d) handles for sale any tobacco
products that are within this state but upon which tax has not been imposed.
RCW
82.26.020(2). The
distributor who first possesses the tobacco product for sale in this state is
the distributor liable for the tax.
RCW
82.26.030.
Examples. The following examples, while not
exhaustive, illustrate some of the circumstances in which the tax is imposed.
These examples should be used only as a general guide. The status of each
situation must be determined after a review of all of the facts and
circumstances.
(a) BET Distributors
sells and ships tobacco products from Kentucky via common carrier to Surprise
Enterprises in Washington. The tax is due from Surprise Enterprises, a licensed
distributor, because it is the first possessor in Washington that holds the
product for sale. However, BET Distributors must give the board notice of its
intent to ship tobacco products into this state.
(b) BET Distributors sells and ships tobacco
products in its own trucks from Kentucky to Jamie's Enterprises, a licensed
distributor in Washington. The tax is due from BET Distributors, because it is
the first possessor in Washington that holds the product for sale.
(c) Garden State Cigars is located in New
Jersey. It ships its products to Washington retailers via common carrier. The
retailers must be licensed as distributors and are liable for the tax. However,
Garden State Cigars must give the board notice of its intent to ship tobacco
products into this state.
(d) An
Indian retailer located in Indian Country in Washington State sells tobacco
products to Washington retailers who pick up the products in Indian Country and
take it back to their retail outlets. The Washington retailers must be licensed
as distributors and are liable for the tax. The Indian retailer is not required
to hold a state tobacco products retailer or distributor license.
State-licensed distributors making retail sales to Indian retailers may claim a
credit against the tax under
RCW
82.26.110.