Current through Register Vol. 24-06, March 15, 2024
(2)
Tax measure.
For manufacturers, the measure of the tax is the value of products listed in
subsection (4) of this section, including by-products manufactured in this
state. For wholesalers and retailers, the measure of the tax is the gross
proceeds of sales within this state of the products listed in subsection (4) of
this section. In the case of publishers of newspapers and magazines, the
measure of the tax is the gross proceeds of sales, and does not include
advertising income.
Litter tax is imposed on subsequent sales of the same goods
from the manufacturer to the wholesaler, from the wholesaler to the retailer,
and from the retailer to the consumer, if the goods are listed in subsection
(4) of this section, and the sales are not specifically exempt by law.
(a)
Value of products and gross
proceeds of sales. For purposes of the litter tax, "value of products"
and "gross proceeds of sales" have the same meanings as defined in
RCW
82.04.450 and
82.04.070,
respectively. See also WAC
458-20-112 for
more information regarding "value of products."
(b)
Alternative method for grocery
stores and drugstores. Instead of requiring grocery stores and
drugstores to account for all items that are and are not subject to litter tax
separately, the following alternative methods are allowed:
(i) Persons operating drugstores may report
and pay litter tax measured by fifty percent of total sales in lieu of
separately accounting for sales of nondrug drugstore sundry products. See
subsection (4)(n) of this section for information about what constitutes
nondrug drugstore sundry products. For purposes of this rule, "drug" has the
same meaning as provided in
RCW
82.08.0281.
(ii) Persons operating grocery stores may
report and pay the litter tax measured by ninety-five percent of total sales in
lieu of separately accounting for grocery and nongrocery products sold. See
subsection (4)(b) of this section for information about what constitutes
grocery products.
(4)
What products are subject to litter tax? Litter tax applies to the
manufacture or sale of products listed in this subsection, unless a specific
exemption applies. Litter tax applies whether these products are sold packaged,
unpackaged, or in recyclable containers. See subsection (5) of this section for
the litter tax exemptions available for the manufacture or sale of products in
these categories.
(a)
Food for human or
pet consumption. Food for human or pet consumption is any substance,
except drugs, where the chief, general use is for human or pet nourishment,
regardless of whether the substance is sold in a consumable form. Food for
human or pet consumption includes candy, chewing gum, condiments, packaged or
unpackaged meat, bulk foods, shellfish, and ingredients used in processing food
for human or pet consumption such as industrial chocolate, grain, barley, or
hops. This category includes sales of meals, snacks, lunches, or other food and
beverages at restaurants, drive-ins, snack bars, taverns, or by
concessionaires.
(b)
Groceries. Groceries are all products sold by persons in a place
of business selling food and food ingredients, as defined in
RCW
82.08.0293, for off-premises consumption, but
excluding drugs, building materials, clothing, furniture, and
appliances.
(c)
Cigarettes
and tobacco products. Cigarettes and tobacco products include all of the
products subject to the excise taxes imposed by chapters 82.24 and 82.26
RCW.
(d)
Soft drinks and
carbonated waters. Soft drinks are nonalcoholic beverages that contain
natural or artificial sweeteners. Soft drinks do not include beverages that
contain milk or milk products, soy, rice or similar milk substitutes, or
greater than fifty percent of vegetable or fruit juice by volume. Carbonated
waters are nonalcoholic beverages, containing carbon dioxide, that do not
contain natural or artificial sweeteners.
(e)
Beer and other malt
beverages. Beer and other malt beverages are all beverages defined as
beer or malt liquor by
RCW
66.04.010 or rules of the Washington state
liquor and cannabis board.
(f)
Wine. Wine includes all alcoholic beverages defined as wine in
RCW
66.04.010 or rules of the Washington state
liquor and cannabis board, but does not include "spirits" as defined in
RCW
66.04.010.
(g)
Newspapers and magazines.
Newspapers and magazines are all daily and periodical publications, including
real estate guides, vehicle trader publications, free community newspapers, and
the like.
(h)
Household paper
and paper products. Household paper and paper products are materials or
substances made into sheets or leaves from natural organic or synthetic fibrous
material for home or other personal use. Household paper and paper products
include products or articles made from such sheets or leaves for home or other
personal use, such as toilet tissue, paper cups, plates, napkins, cards,
wrapping paper, stationery, personal banking checks or deposit slips, computer
printer or copier paper, and the like. Household paper and paper products do
not include paper products manufactured or sold for business or commercial use.
Business and commercial use requires that the paper products be consumed by the
business or used by the business in the manufacturing of articles, substances,
or commodities.
(i)
Glass
containers. Glass containers are articles made wholly or in substantial
part of processed silicates that can be, or are, used to hold other things
within themselves. Glass containers include only those containers that are sold
with, and that contain, another product or products otherwise subject to litter
tax, or containers that are produced so that they can later contain and be sold
with another product or products otherwise subject to litter tax. Glass
containers do not include containers that are produced to be sold at retail as
empty reusable containers, such as drinking glasses, vases, and the
like.
(j)
Metal
containers. Metal containers are articles made wholly or in substantial
part of materials such as iron, steel, tin, aluminum, copper, zinc, lead,
silver and any alloys thereof; and that can be, or are, used to hold other
things within themselves. In addition, metal containers include only those
containers that are sold with, and that contain, another product or products
otherwise subject to litter tax, or containers that are produced so that they
can later contain and be sold with another product or products otherwise
subject to litter tax. Metal containers do not include containers that are
produced to be sold at retail as empty reusable containers, such as pots and
pans, or metal containers made for transporting other products.
(k)
Plastic or fiber containers made of
synthetic material. Plastic or fiber containers made of synthetic
material will be referred to as plastic or fiber containers for purposes of
this subsection (4)(k). Plastic or fiber containers are articles that can be,
or are, used to hold other things within themselves, and that are made of
synthetically produced ethylene derivatives, resins, waxes, adhesives, or
polymers, or made by synthesis of fiber materials with adhesives, polymers,
waxes, resins, or other materials. Plastic or fiber containers include
containers made of paper, pasteboard, or cardboard consisting of fibrous
substances synthesized with other materials. Synthetic material is produced by
the process of making or building up by a composition or union of simpler parts
or elements, as distinguished from the process of extraction or refinement.
Plastic or fiber containers include only those containers that are sold with,
and that contain, another product or products otherwise subject to litter tax,
or containers that are produced so that they can later contain and be sold with
another product or products otherwise subject to litter tax. Plastic or fiber
containers do not include containers that are produced to be sold at retail as
empty reusable containers.
(l)
Cleaning agents. Cleaning agents are all soaps, detergents,
solvents, or other cleansing substances used for cleaning buildings, places,
persons, animals, or other things. Cleaning agents include packaged products
and products sold in bulk form, as well as products sold in recyclable
containers.
(m)
Toiletries. Toiletries are all substances such as soap, powder,
shampoo, cologne, perfume, cosmetics, toothpaste, and the like, used in
connection with personal dressing or grooming.
(n)
Nondrug drugstore sundry
products. Nondrug drugstore sundry products are all products sold by
persons in the business of selling prescription drugs to consumers, except the
following: Drugs, building materials, clothing, furniture, and appliances.
(5)
Exemptions. This subsection provides information about products
listed under subsection (4) of this section that are exempt from litter tax as
provided by
RCW
82.19.050. A person claiming an exemption
from the litter tax must maintain adequate records to substantiate the exempt
status of the product being manufactured or sold.
The litter tax does not apply to the following categories of
products:
(a)
Products for use
and consumption out-of-state. The manufacture or sale of products for
use and consumption outside the state.
(b)
Agricultural products exempt from
B&O tax. The value of products or gross proceeds of the sales by
farmers exempt from tax under
RCW
82.04.330.
(c)
Certain wholesale sales by
qualified grocery distribution cooperatives. The sale of products for
resale by a qualified grocery distribution cooperative to customer-owners of
the grocery distribution cooperative. For the purposes of this section,
"qualified grocery distribution cooperative" and "customer-owner" have the
meanings given in
RCW
82.04.298.
(d)
Food or beverages sold for
on-premises consumption. The sale of food or beverages by retailers that
are sold solely for immediate consumption indoors at the seller's place of
business, at a deck or patio at the seller's place of business, or at an eating
area that is contiguous to the seller's place of business.
(e)
Certain retail sales by
caterers. The sale of prepared food or beverages by caterers where the
food or beverages are to be served for immediate consumption in or on
individual, nonsingle use containers at premises occupied or controlled by the
customer. For the purposes of this section, "prepared food" has the same
meaning as provided in
RCW
82.08.0293. "Nonsingle use container" and
"caterer" have the meanings given in
RCW
82.19.050.
(6)
Examples. Examples included
in this rule identify a number of facts and then state a general conclusion;
they should be used only as a general guide. The tax consequences of all
situations must be determined after a review of all the facts and
circumstances.
(a)
Example 1.
Tina's Burgers is a restaurant that operates in a food court. Tina's Burgers
offers the option to dine-in or take the food to-go. Dine-in sales are for
customers who will be immediately consuming their food purchases within the
food court dining area. To-go sales will be taken from the food court area to
be consumed off of the premises. If a customer orders a burger and indicates
they will dine-in, the purchase is not subject to litter tax. If a customer
indicates that they will take the burger to-go, the purchase is subject to
litter tax. To qualify for the exemption, Tina's Burgers must maintain adequate
records demonstrating which sales were dine-in, and which were to-go.
(b)
Example 2. ABC Cinema sells
popcorn and other food and beverage items at its concession stand. Customers
purchase the concession items to consume at the theater while watching movies.
The purchases from the theater's concession stand are not subject to litter
tax.
(c)
Example 3.
Prairie Oaks Golf Course has a restaurant on site called Chipper's. The golf
course does not own the restaurant. Chipper's has a dining area, but also has
servers driving golf carts through the golf course to serve patrons as they
golf. Sales for immediate consumption in the restaurant dining area are not
subject to litter tax, but sales occurring on the golf course are subject to
litter tax because the food is not being consumed on the premises of the
restaurant.
Statutory Authority:
RCW
82.32.300,
82.01.060(2), and
chapter 82.19 RCW. 06-17-187, § 458-20-243, filed 8/23/06, effective
9/23/06. Statutory Authority:
RCW
82.32.300. 83-08-026 (Order ET 83-1), §
458-20-243, filed 3/30/83; Order ET 71-2, § 458-20-243, filed
10/27/71.