Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction. The department
of revenue (department) makes electronic filing My DOR) and electronic payment
available to taxpayers. The law requires all taxpayers to file and pay excise
taxes electronically unless a specific waiver applies.
RCW
82.32.080.
(a) Taxpayers required to electronically file
and pay their excise taxes must register to use My DOR. If they choose to pay
using certain electronic payment methods, they must also provide the department
with the necessary banking information.
(b) Electronic filing and electronic payment
are available for taxes reported on the combined excise tax return, which
includes those taxes administered by the department under chapter 82.32 RCW.
For purposes of the taxes under chapter 82.32 RCW, unless the context clearly
requires otherwise, the term "tax" is defined under
RCW
82.32.020. Electronic filing and electronic
payment are not required for city and town taxes on financial institutions
(chapter 82.14A RCW), cigarette tax (chapter 82.24 RCW), leasehold excise tax
(chapter 82.29A RCW), and forest tax (chapter 84.33 RCW). Taxpayers not
required to file or pay taxes electronically are encouraged to voluntarily use
My DOR to file and pay electronically.
(2)
Electronic filing and electronic
payment. My DOR is an internet-based application providing a secure and
encrypted method for taxpayers to file and pay Washington state's excise taxes.
(a) All taxpayers are required to
electronically file using My DOR and pay electronically unless the department
waives the requirement for good cause.
(b) If good cause exists, the department may
waive the electronic filing and payment requirements for any taxpayer. Waiver
for "good cause" is generally temporary. Reasons for good cause include, but
are not limited to the following:
(i) The
taxpayer does not have the necessary equipment or software;
(ii) The equipment or software necessary is
not functioning properly;
(iii) The
taxpayer does not have access to the internet using the taxpayer's
equipment;
(iv) The taxpayer does
not have a bank account or credit card;
(v) The taxpayer's bank is unable to send or
receive electronic funds transfer transactions; or
(vi) Some other circumstance or condition
exists that, in the department's judgment, prevents the taxpayer from
complying.
(3)
Electronic payments.
Taxpayers required to use My DOR to submit their tax return must also pay the
associated taxes electronically. The department accepts two electronic payment
methods: Electronic funds transfer (EFT) and credit card, as described in (a)
and (b) of this subsection. Taxpayers required to pay electronically must use
EFT or credit card unless the department authorizes some other type of
electronic payment for a specific taxpayer.
(a)
Payment by electronic funds
transfer (EFT). EFT is a method of transferring funds from a taxpayer's
bank account into the department's bank account.
(i)
Definitions. For purposes of
this rule, the following terms apply:
(A)
"Electronic funds transfer" or "EFT" means any transfer of funds, other than a
transaction originated or accomplished by conventional check, drafts, or
similar paper instrument, which is initiated through an electronic terminal,
telephonic instrument, or computer or magnetic tape so as to order, instruct,
or authorize a financial institution to debit or credit a checking or other
deposit account. Electronic funds transfer includes payments made by electronic
check (e-check).
(B) "ACH" or
"automated clearing house" means a central distribution and settlement system
for the electronic clearing of debits and credits between financial
institutions.
(C) "EFT debit" means
the electronic transfer of funds, cleared through the ACH system, generated by
the taxpayer instructing the department's bank to charge the taxpayer's account
and deposit the funds to the department's account. E-check is a singular
payment transaction functioning in the same manner as an EFT debit
transaction.
(D) "EFT credit" means
the electronic transfer of funds, cleared through the ACH system, generated by
the taxpayer instructing the taxpayer's bank to charge the taxpayer's account
and deposit the funds to the department's account.
(E) "Department's bank" means the bank with
which the department of revenue has a contract to assist in the receipt of
taxes and includes any agents of the bank.
(F) "Collectible funds" means funds that have
completed the electronic funds transfer process and are available for immediate
use by the state.
(G) "ACH
CCD+addenda" and "ACH CCD+record" mean the information in a required ACH format
transmitted to properly identify the payment.
(ii)
EFT methods. Taxpayers
paying by EFT must use the EFT debit, EFT credit, or e-check methods. In an
emergency, the taxpayer should contact the department for alternative methods
of payment.
(iii)
Form and
content of EFT. The form and content of EFT will be as follows:
(A) If a taxpayer uses EFT debit, they must
furnish the department with the information needed to complete the transaction
by registering for electronic funds transfer on the department's
website.
(B) If a taxpayer uses EFT
credit, they are responsible for ensuring their bank has the information
necessary to complete the payment. The payment must be submitted using the ACH
CCD+addenda format. The EFT credit payment method requires the taxpayer to
complete an EFT authorization form.
(C) If the taxpayer wishes to use e-check,
they must enter their bank account and routing number for each payment
transaction. The e-check transaction authorizes the department to withdraw the
payment amount from the taxpayer's bank account.
(iv)
Due date of EFT payment.
The EFT payment is due on or before the next banking day following the tax
return due date.
(A) An EFT payment made using
the EFT debit or e-check method is timely if the payment is initiated on or
before 11:59 p.m. Pacific Time on the tax return due date, and the effective
date for that payment is on or before the next banking day following the tax
return due date.
(B) An EFT payment
made using the EFT credit method is timely when the state receives collectible
U.S. funds on or before 5:00 p.m., Pacific Time, on the EFT payment due
date.
(C) The ACH system, either
EFT debit or EFT credit, requires the necessary information be in the
originating bank's possession on the banking day preceding the date for
completion of the transaction. Each bank generally has its own transaction
deadlines, but it is the responsibility of the taxpayer to ensure timely
payment.
(D) The tax return due
date is the next business day after the statutory due date if the statutory due
date falls on a Saturday, Sunday, or legal holiday. Legal holidays are
determined under state of Washington law and banking holidays are those
recognized by the Federal Reserve System.
Example. The tax return due date is Friday, December 25th, a
legal and banking holiday. The next business day is Monday, December 28th, and
this is the holiday-adjusted tax return due date. This means EFT debit and
e-check users must initiate their debit payment by 11:59 p.m., Pacific Time, on
December 28th, with a payment effective date of Tuesday, December 29th, for the
payment to be considered timely. EFT credit users must contact their bank to
ensure funds are deposited in the department's bank no later than 5:00 p.m.,
Pacific Time, on Tuesday, December 29th, for the payment to be considered
timely.
(b)
Payment by credit card.
Payment by credit card is available using American Express, Discover, Visa, or
MasterCard. Taxpayers who wish to make their payment with one of these credit
cards are directed to the website of a third-party, nonstate, vendor when they
submit their electronic return. Taxpayers then provide their credit card number
in the same manner as with any other credit card payment transaction. A credit
card payment is considered timely if the payment is completed, including the
time it takes to enter the required information on the credit card vendor's
website, on or before 11:59 p.m., Pacific Time, on the tax return due date.
Each credit card payment may be subject to a convenience fee charged by the
third-party, nonstate, vendor.
(4)
Electronic refunds. If a
taxpayer is due a refund, the taxpayer is entitled to a refund of those taxes
by EFT. If the taxpayer wishes to have the refund made by EFT, the taxpayer
must provide the department with the information necessary to make an
appropriate EFT transaction or the refund will be issued as a paper check. No
electronic adjustments or refunds are made directly to a taxpayer's credit
card. Overpayments of tax will either be retained to be credited to future tax
liabilities or, at the taxpayer's request, will be refunded.
(5)
Coordinating a paper return and an
electronic payment. To file a paper return, the taxpayer must qualify
for a waiver from electronically filing. If approved, and the taxpayer uses the
EFT credit payment method but files a paper return, the department will match
the payment with the return. A paper return will be considered timely filed
only if it is received by the department on or before the tax return due date
and the taxpayer has been waived from the electronic filing and payment
requirements. The associated EFT credit payment must be received by the next
banking day after the tax return due date. If both events occur, the return and
payment are considered timely, and the late payment penalty does not apply. If
the return is sent through the U.S. Postal Service, it will be considered
received on the date shown by the post office cancellation mark stamped on the
envelope. RCW 82.32.080.
(6)
Crediting and proof of
payment. The department will credit the taxpayer with the amount paid as
of the date the payment is received by the department's bank. The proof of
payment by the taxpayer will depend on the means of transmission.
(a) EFT debit and e-check transactions may be
proved by use of the confirmation number received from the department that the
transaction was initiated and bank statements or other evidence from the bank
that the transaction was settled.
(b) An EFT credit transaction is initiated by
the taxpayer through the taxpayer's bank. The taxpayer is responsible for
completion of the transaction. The taxpayer generally will be given a
verification number by the taxpayer's bank. This verification number with proof
of the ACH CCD+record showing the department's bank and account number, plus
confirmation the transaction has been settled will constitute proof of
payment.
(c) A taxpayer using any
other electronic payment method is responsible for completion of the
transaction. Proof of payment will include transaction initiation date and any
other evidence from a financial institution or credit card company showing the
transaction was settled.
(7)
Correcting errors. Errors in
the electronic payment process may result in either an underpayment or an
overpayment of the tax. In either case, the taxpayer needs to contact the
department to arrange for appropriate action. Overpayments may be used as a
credit, or the taxpayer may apply for a refund. The department will expedite a
refund where it is caused by an error in transmission. Underpayments should be
corrected by the taxpayer immediately to avoid any penalties.
(8)
Penalties. There are no
special provisions for penalties when payment is made by electronic means. WAC
458-20-228 discusses the various
penalties that may apply and the limited circumstances under which they may be
waived. To avoid the imposition of penalties, the taxpayer must provide correct
bank account information to the department, and ensure their payment is timely.
(a) If the department finds a taxpayer
disregarded specific written instructions to file returns or remit payments
electronically, as provided by
RCW
82.32.080, the department will add a penalty
of 10 percent to the amount of the tax that should have been reported and/or
paid electronically or the additional tax found due if there is a deficiency
because of failure to follow written instructions.
(b) A taxpayer will be considered to have
willfully disregarded the requirement to file returns or remit payment
electronically if the department:
(i) Has
mailed or otherwise delivered the specific written instructions to the taxpayer
on at least two occasions; and
(ii)
Has provided the taxpayer at least 45 days after the second written notice to
come into compliance with its electronic filing and/or payment
obligations.
(c) In an
EFT debit and e-check transaction, the department's bank is the originating
bank and is responsible for the accuracy of transmission. If the taxpayer has
timely initiated the EFT debit or e-check transaction, provided accurate bank
account information, received a confirmation number, and shows adequate funds
were available in the account, no late payment penalties will apply with
respect to those funds authorized.
(d) In an EFT credit transaction, the
taxpayer's bank is the originating bank, and the taxpayer is primarily
responsible for its accuracy. The taxpayer must have timely initiated the
transaction, provided the correct information for the ACH CCD+record, and shown
there were sufficient funds in the account, to prove timely compliance. If the
taxpayer can make this showing, then no late payment penalties will apply with
respect to those funds authorized if the transaction is not
completed.
(e) When a payment is
made using an approved credit card, the credit card company acts as the
taxpayer's agent and the taxpayer is primarily responsible for the accuracy of
this transaction. If the taxpayer can prove the payment was initiated and
submitted timely, no late payment penalties will apply to those funds
authorized.
Statutory
Authority:
RCW
82.32.300,
82.01.060(2),
82.32.080, and
82.32.085. WSR 13-22-047, §
458-20-22802, filed 11/1/13, effective 12/2/13. Statutory Authority:
RCW
82.32.085,
82.32.300, and
82.01.060(2). WSR
06-23-066, § 458-20-22802, filed 11/9/06, effective 12/10/06. Statutory
Authority:
RCW
82.32.300 and
82.32.085. WSR 01-07-017, §
458-20-22802, filed 3/13/01, effective 4/13/01. Statutory Authority:
RCW
82.32.300. WSR 91-24-070, §
458-20-22802, filed 12/2/91, effective 1/2/92; WSR 90-19-052, §
458-20-22802, filed 9/14/90, effective 10/15/90. WSR 13-21-033, §
458-20-22802, filed 10/9/2013, effective
11/9/2013