Current through Register Vol. 24-06, March 15, 2024
(1)
Introduction. This rule explains the various commute trip
reduction incentives.
RCW
82.04.355 and
82.16.047 exempt amounts received
from providing ride sharing, or ride sharing for persons with special
transportation needs, from business and occupation (B&O) tax and public
utility tax (PUT).
RCW
82.08.0287 and
82.12.0282 provide sales and use
tax exemptions for sales or use of passenger motor vehicles as ride sharing
vehicles. Finally, chapter 82.70 RCW provides commute trip reduction incentives
in the form of B&O tax or PUT credits in connection with ride sharing,
public transportation, car sharing, and nonmotor-ized commuting.
(2)
Definitions. For the
purposes of this rule, the following definitions apply:
(a)
"Car sharing" means a
membership program intended to offer an alternative to car ownership under
which persons or entities that become members are permitted to use vehicles
from a fleet on an hourly basis.
RCW
82.70.010.
(b)
"Nonmotorized commuting"
means commuting to and from the workplace by an employee, by walking or
running, or by riding a bicycle or other device not powered by a motor.
"Nonmotorized commuting" does not include teleworking, which is a program where
work functions normally performed at a traditional workplace are instead
performed by an employee at his or her home, at least one day a week for the
purpose of reducing the number of trips to the employee's workplace.
RCW
82.70.010.
(c)
"Public transportation"
means the transportation of packages, passengers, and their incidental baggage,
by means other than by charter bus or sight-seeing bus, together with the
necessary passenger terminals and parking facilities or other properties
necessary for passenger and vehicular access to and from such people moving
systems.
"Public transportation" includes passenger services of the
Washington state ferries and passenger-only ferry services for those public
transportation benefit areas eligible to provide passenger-only ferry service
under RCW
36.57A.200.
RCW
82.70.010.
(d)
(i)
"Ride sharing" means a carpool or vanpool arrangement whereby one
or more groups not exceeding 15 persons each, including the drivers, and not
fewer than three persons, including the drivers, are transported in a passenger
motor vehicle with a gross vehicle weight not exceeding 10,000 pounds.
RCW
46.74.010(2). See subsection
(4)(b) of this rule for increased minimum group size requirements in some
circumstances. "Ride sharing" includes ride sharing on Washington state
ferries. RCW
82.70.010(6).
(ii) Ride sharing does not include
transportation provided in the normal course of business by entities subject to
chapters 46.72A (limousines), 48.177 (commercial transportation services),
81.66 (private, nonprofit transportation providers that receive compensation
for transporting persons with special transportation needs), 81.68 (auto
transportation companies), 81.70 (passenger charter and excursion carriers),
and 81.72 (taxicabs) RCW, or offer peer-to-peer car sharing. "Peer-to-peer car
sharing" means motor vehicle owners making their motor vehicles available for
persons to rent for short periods of time.
(e)
"Ride sharing for persons with
special transportation needs" means an arrangement, whereby a group of
persons with special transportation needs, and their attendants, is transported
by a public social service agency or a private, nonprofit transportation
provider, in a passenger motor vehicle as defined by the department of
licensing to include small buses, cutaways, and modified vans not more than 28
feet long. The driver need not be a person with special transportation needs.
RCW
46.74.010.
(i)
"Private, nonprofit transportation
provider" means any private, nonprofit corporation providing
transportation services for compensation solely to persons with special
transportation needs.
RCW
81.66.010.
(ii)
"Persons with special
transportation needs" means those persons, including their personal
attendants, who because of physical or mental disability, income status, or
age, are unable to transport themselves or to purchase appropriate
transportation.
RCW
81.66.010.
(3)
B&O tax and PUT exemptions for
providing ride sharing or ride sharing for persons with special transportation
needs.
RCW
82.04.355 and
82.16.047 provide B&O tax and
PUT exemptions for amounts received in the course of ride sharing or ride
sharing for persons with special transportation needs.
(4)
Retail sales tax and use tax
exemptions on sales or use of passenger motor vehicles as ride sharing
vehicles.
RCW
82.08.0287 and
82.12.0282 provide retail sales
tax and use tax exemptions for sales and use of passenger motor vehicles as
ride-sharing vehicles. The following conditions apply to qualify for these
exemptions:
(a)
Minimum duration of
usage. The passenger motor vehicles must be used primarily for ride
sharing or ride sharing for persons with special transportation needs for 36
consecutive months beginning from the date of purchase (retail sales tax
exemption) and the date of first use (use tax exemption). If the vehicle is
used as a ride sharing vehicle for less than 36 consecutive months, the
registered owner must pay the retail sales tax or use tax.
(b)
Increased passenger requirements
for vehicles not operated by a public transportation agency. If a
vehicle is not operated by a public transportation agency, the minimum group
size is increased from three persons each to five persons each including the
driver. RCW 82.08.0287
(2)(b) and
82.12.0282
(2)(b).
(c)
Qualifying jurisdictions.
Vehicles must be operated within:
(i) A
county, or a city or town within that county, which has a commute trip
reduction plan under chapter 70A.15 RCW; or
(ii) In other counties, where the vehicle is
registered with, or operated by, a public transportation agency.
(d)
Ownership and
operation. The vehicle must be:
(i)
Operated by a public transportation agency for the benefit of the general
public;
(ii) Used by a major
employer, as defined in
RCW
70A.15.4010, as an element of its commute
trip reduction program for their employees; or
(iii) Owned and operated by individual
employees and registered either with the employer as part of its commute trip
reduction program or with a public transportation agency.
(e)
Certification.
(i) Individual employee owned and operated
motor vehicles require certification that the vehicle is registered with a
major employer or a public transportation agency; and
(ii) Major employers who own and operate
motor vehicles for their employees must certify that the commute ride sharing
arrangement conforms to a carpool or vanpool element contained within their
commute trip reduction program.
(5)
B&O tax or PUT credit for ride
sharing, public transportation, car sharing, or nonmotorized commuting.
RCW
82.70.020 provides a credit against B&O
tax or PUT liability for amounts paid to or on behalf of employees for ride
sharing, for using public transportation, for using car sharing, or for using
nonmotorized commuting. The credit is equal to the amount paid to or on behalf
of each employee multiplied by 50 percent, but may not exceed $60 per employee
per fiscal year. No refunds will be granted for unused credits.
(a)
Who is eligible for this
credit?
(i) Employers in Washington
are eligible for this credit, for amounts paid to or on behalf of their own or
other employees, as financial incentives to such employees for ride sharing,
for using public transportation, for using car sharing, or for using
nonmotorized commuting.
(ii)
Property managers who manage worksites in Washington are eligible for this
credit, for amounts paid to or on behalf of persons employed at those
worksites, as financial incentives to such persons for ride sharing, for using
public transportation, for using car sharing, or for using nonmotorized
commuting.
(b)
What is the credit amount? The amount of the credit is equal to
the amount paid to or on behalf of each employee multiplied by 50 percent, but
may not exceed $60 per employee per fiscal year.
RCW
82.70.020.
(c)
What is a "fiscal year"? A
"fiscal year" begins on July 1st of one year and ends on June 30th of the
following year.
(d)
When will
the credit expire? The credit program is scheduled to expire July 1,
2024. No credit may be claimed after June 30, 2024.
(e)
What are the limitations of the
credit?(i) The credit may not exceed
the amount of B&O tax or PUT that would otherwise be due for the same
fiscal year.
(ii) A person may not
receive credit for amounts paid to or on behalf of the same employee under both
B&O tax and PUT.
(iii) A person
may not take a credit for amounts claimed for credit by other
persons.
(iv) The total credit
granted to a person under both B&O tax and PUT may not exceed $100,000 for
a fiscal year.
(v) The total credit
granted to all persons under both B&O tax and PUT may not exceed $2,750,000
in any fiscal year.
(vi) No credit
or portion of a credit denied, because of exceeding the limitations in (i),
(iv), or (v) of this subsection, may be used against tax liability for other
fiscal years.
(vii) No person is
eligible for tax credits under
RCW
82.70.020 if the additional revenues for the
multimodal transportation account (RCW
47.66.070) created by chapter 361, Laws of
2003 are terminated.
(f)
What are the credit procedures?
(i) Persons applying for the credit must
complete the commute trip reduction credit annual application. The application
must be electronically filed and received by the department between January 1st
and January 31st, following the calendar year in which the applicant made
incentive payments. The commute trip reduction credit annual application is
available through the business's "My DOR" account on the department's website
at dor.wa.gov.
(ii) The department
must approve or deny a completed application within 60 days of the January 31st
deadline. The department must deny an application not received by the January
31st deadline, except the department may accept applications received up to 15
calendar days after the deadline if the application was not received because of
circumstances beyond the control of the taxpayer. For what is considered
circumstances beyond the control of a taxpayer, see WAC
458-20-228 Returns, payments,
penalties, extensions, interest, stays of collection. Once the application is
approved and the tax credit is granted, the department is not allowed to
increase the credit.
(iii) If the
total amount of credit applied for by all approved applicants in a fiscal year
exceeds the limitation as provided in (i)(v) of this subsection, the amount of
credit allowed for all applicants must be proportionally reduced so as not to
exceed the limit. The amount reduced may not be carried forward and claimed in
subsequent fiscal years.
(iv) To
claim a commute trip reduction tax credit, a person must file all returns,
forms, and other information the department requires in an electronic format as
provided or approved by the department. Any return, form, or information
required to be filed in an electronic format is not filed until received by the
department in an electronic format. "Returns" has the same meaning as "return"
in RCW
82.32.050.
(g)
Examples. The following
examples identify facts and then state a conclusion. These examples should be
used only as a general guide. The tax results of other situations must be
determined after a review of all the facts and circumstances.
(i)
Example 1. An employer pays
$180 for a yearly bus pass for one employee. For another employee, the employer
buys a bicycle helmet and bicycle lock for a total of $50. The sum of these two
amounts, $230, is the total expenditure during a fiscal year of amounts paid
to, or on behalf of, employees in support of ride sharing, using public
transportation, using car sharing, and using nonmotorized commuting. The
employer may claim a credit of $60 for the amount spent for the employee using
the bus pass. 50 percent of $180 is $90, but the credit is limited to $60 per
employee. The employer may claim a credit of $25 (50 percent of $50) for the
amount spent for the employee who bicycles to work. Even though 50 percent of
$230 (the total amount spent on both employees), works out to be less than $60
per employee, the credit is computed by looking at actual spending for each
employee and not by averaging the spending for both employees.
(ii)
Example 2. An employer
provides parking spaces for the exclusive use of ride sharing vehicles. Amounts
spent for signs, painting, or other costs related to the parking spaces do not
qualify for the credit. This is because the credit is for financial incentives
paid to or on behalf of employees. While the parking spaces support the use of
ride sharing vehicles, they are not financial incentives and do not involve
amounts paid to or on behalf of employees.
(iii)
Example 3. An employer
pays the property manager for a yearly bus pass for one employee who works at
the worksite managed by the property manager. The property manager in turn pays
the amount received from the employer to a public transportation agency to
purchase the bus pass. Either the employer or the property manager, but not
both, may take the credit for this expenditure.
Statutory Authority:
RCW
82.32.300 and
82.01.060(2).
06-01-026, § 458-20-261, filed 12/13/05, effective 1/13/06. Statutory
Authority:
RCW
82.32.300, 82.04.4453 and 82.16.048.
00-11-097, § 458-20-261, filed 5/17/00, effective 6/17/00; 99-08-035,
§ 458-20-261, filed 3/31/99, effective
5/1/99.