[Board1] FW: The Washington State Department of Revenue has recently taken action on the following Rules and Interpretive Statements:

Tue Jul 2 13:52:57 PDT 2024

Might the following item on this schedule relate to or tie  into the issue of the taxation of escrow advances that we are facing?

ETA 3144.2024

Taxability of mortgage escrow receipts

George

George Peters, WTP

Executive Director

Washington Land Title Association

 <https://washingtonlandtitle.com> https://washingtonlandtitle.com 

Mail: PO Box 328, Lynnwood, WA 98046

Delivery: 6817 208th St SW, #328, Lynnwood, WA 98036

206-437-5869 (Mobile)

206-260-4731 (Fax)

 <mailto:execdirector at wltaonline.org> execdirector at washingtonlandtitle.com

This is a confidential communication intended solely for the named recipient. If you are not the intended recipient, please destroy it and call George Peters at 206-437-5869 immediately. Thank you.

From: Washington Department of Revenue <WADOR at public.govdelivery.com> 
Sent: Tuesday, July 2, 2024 1:37 PM
To: execdirector at washingtonlandtitle.com
Subject: The Washington State Department of Revenue has recently taken action on the following Rules and Interpretive Statements: 

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The Washington State Department of Revenue has recently taken action on the following Rules and Interpretive Statements: 

July 2, 2024

Link for Rule Proposals:  <https://links-2.govdelivery.com/CL0/https:%2F%2Fdor.wa.gov%2Ffind-law-or-rule%2Frule-making-agenda/1/01010190752a13f9-8b6bec9d-70c7-4648-bcbc-a31219ecfa14-000000/-qSl2myhngGM8y3me4SnFKQkn0OWR8Dni5pwwxV4Tmg=359> Rules Agenda

Title

WAC 458-20-23801

Watercraft excise tax – Watercraft depreciation Schedule.

Link for Recent Adoptions and Repeals:  <https://links-2.govdelivery.com/CL0/https:%2F%2Fdor.wa.gov%2Flaws-rules%2Frule-making-activities%2Frule-and-tax-advisory-adoptions-and-repeals/1/01010190752a13f9-8b6bec9d-70c7-4648-bcbc-a31219ecfa14-000000/CGxvhn04r-XChPaP67pr7L4b0sIrldB4NllCKQ4NXkI=359> Recent Adoptions and Repeals

Title

ETA 3205.2024

Taxability of telecommunication support payments

ETA 3144.2024

Taxability of mortgage escrow receipts

WAC 458-20-182

Warehouse businesses

WAC 458-20-301

Capital gains excise tax – Definitions, deductions, exemptions, and allocation of gains and losses

WAC 458-20-13501

Timber harvest operations

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RULE PREPROPOSAL (CR-101) - Excise Tax

WAC 458-20-23801 – Watercraft excise tax – Watercraft Depreciation Schedule.

Why this Rule is being Proposed (CR-101) for Adoption

RCW 82.49.040 requires the Department of Revenue to prepare a depreciation schedule (at minimum annually) for use in the determination of fair market value for watercrafts, which is the basis for measuring the watercraft excise tax. The purpose of this rulemaking effort is to evaluate the watercraft depreciation table values in WAC 458-20-23801. The Department will propose amendments to the watercraft depreciation schedule if watercraft valuation, sales, and registration data indicates an adjustment to a table value(s) is necessary, as required by RCW 82.49.040. The Department will also solicit comments and feedback from external stakeholders regarding the proposed watercraft depreciation schedule.
The Department plans to share any proposed amendments to the watercraft depreciation schedule in advance of the public meeting and discuss any proposed amendments during the public meeting.

Public Meeting date, time, and location for this Rule:

Date: August 6, 2024;   Time: 10:00 A.M.

Zoom meeting
Join on your computer or mobile app
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Comments for this Rule must be sent to:

Brenton Madison
Department of Revenue 
PO Box 47453
Olympia, Washington 98504 
Email:  <mailto:BrentonM at DOR.WA.GOV> BrentonM at DOR.WA.GOV

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RULE ADOPTIONS (CR-103P) - Excise Tax

WAC 458-20-182 - Warehouse businesses

Why this Rule is being Adopted

The purpose of this rulemaking effort is to update the definitions for "storage warehouse" and "warehouse" to match the definitions in RCW 82.04.280 and 82.08.820. Additionally, this rulemaking effort adds subsections regarding dry stack storage, portable self-storage containers, prescription drug warehousing, and provides references to other relevant rules. Other changes have been made to enhance readability of the rule.

Effective Date of Adoption

WAC 458-20-182 will become effective July 28, 2024.

WAC 458-20-301 - Capital gains excise tax – definitions, deductions, exemptions, and allocation of gains and losses

Why this Rule is being Adopted

This new rule seeks to clarify substantive aspects of the excise tax on capital gains by supplying additional definitions and examples related to this excise tax.

Effective Date of Adoption

WAC 458-20-301 will become effective July 28, 2024.

WAC 458-20-13501 - Timber harvest operations

Why this Rule is being Adopted

Timber harvesting operations involve multiple activities, including (but not limited to) extracting, manufacturing, selling, and hauling standing and harvested timber. RCW 82.04.260 provides a preferential B&O tax rate for businesses engaged in certain timber activities (extracting, manufacturing, and selling). RCW 82.16.020 provides a reduced public utility tax rate for businesses that are engaged in log transportation. RCW 82.04.333 provides a B&O tax exemption to “small
harvesters” as defined under RCW 84.33.035. In addition, RCW 82.04.440 provides a B&O tax credit to businesses who conduct manufacturing, extracting, and selling activities within this state. This rule provides guidance on the tax application of various statutes, the filing and reporting obligations of persons engaging in timber harvest operations, and other tax implications related to real estate excise tax and timber tax that may apply. The purpose of this rulemaking effort is to clarify the Department’s existing policies by adding language to the rule, including several new examples, and modernizing the rule for improved readability.

Effective Date of Adoption

WAC 458-20-13501 will become effective August 1, 2024.

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EXCISE TAX ADVISORIES (ETA) ISSUANCE 

ETA 3205 Taxability of Telecommunication Support Payments

Why this ETA was Issued

This Excise Tax Advisory (ETA) addresses the taxability of telecommunications support payments and miscellaneous fees received by telecommunications service providers. While this is an area that may evolve depending on federal and state regulatory requirements, the ETA provides a framework for understanding how these types of payments are taxed under Washington’s business and occupation (B&O) tax, retail sales tax, and the 911 and 988 excise taxes. This ETA does not address the tax treatment of support payments received for providing internet access.

ETA 3144 Taxability of Mortgage Escrow Receipts

Why this ETA was Issued

This Excise Tax Advisory (“ETA”) provides guidance on whether funds collected and deposited in escrow accounts by mortgage lenders or servicers, for the purposes of paying insurance premiums, property taxes and other charges associated with the property on behalf of the mortgagee, constitute gross income to the mortgage lender or servicers.

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