RCW 82.32.783
Reseller's permit -- Contractor application.
(1)(a) Contractors seeking a new reseller permit or to renew or
reinstate a reseller permit must apply to the department in a
form and manner prescribed by the department.
(b) As part of the application, the contractor must report
the total combined dollar amount of all purchases of materials
and labor during the preceding twenty-four months for retail
construction activity, wholesale construction activity,
speculative building, public road construction, and government
contracting. If the contractor was not engaged in business as a
contractor during the preceding twenty-four months, the
contractor may provide an estimate of the dollar amount of
purchases of materials and labor for retail construction
activity, wholesale construction activity, speculative building,
public road construction, and government contracting during the
twelve-month or twenty-four month period for which the reseller
permit will be valid. The contractor must also report the
percentage of its total dollar amount of actual or, if
applicable, estimated material and labor purchases that was for
retail and wholesale construction activity performed by the
applicant.
(c) The department must use its best efforts to rule on
applications within sixty days of receiving a complete
application. If the department fails to rule on an application
within sixty days of receiving a complete application, the
taxpayer may either request a review as provided in subsection
(6) of this section or resubmit the application. Nothing in this
subsection may be construed as preventing the department from
ruling on an application more than sixty days after the
department received the application.
(d)(i) An application must be denied if:
(A) The department determines that the applicant is not
entitled to make purchases at wholesale or is otherwise
prohibited from using a reseller permit;
(B) The application contains any material misstatement;
(C) The application is incomplete; or
(D) Less than twenty-five percent of the taxpayer's total
dollar amount of actual or, if applicable, estimated material and
labor purchases as reported on the application is for retail and
wholesale construction activity performed by the applicant.
However, the department may approve an application not meeting
the criteria in this subsection (1)(d)(i)(D) if the department is
satisfied that approval is unlikely to jeopardize collection of
the taxes due under this title.
(ii) The department may also deny an application if the
department determines that denial would be in the best interest
of collecting taxes due under this title.
(iii) The department's decision to approve or deny an
application may be based on tax returns previously filed with the
department by the applicant, a current or previous examination of
the applicant's books and records by the department, information
provided by the applicant in the master application and the
reseller permit application, and other information available to
the department.
(e) The department must refuse to accept an application to
renew a reseller permit that is received more than ninety days
before the expiration of the reseller permit.
(2) Notwithstanding subsection (1) of this section, the
department may issue or renew a reseller permit for a contractor
that has not applied for the permit or renewal of the permit if
the department is satisfied that the contractor is entitled to
make purchases at wholesale and that issuing or renewing the
reseller permit is unlikely to jeopardize collection of sales
taxes due under this title based on criteria established by the
department by rule. Such criteria may include but is not limited
to whether the taxpayer has a previous history of misusing resale
certificates or reseller permits or there is any other indication
that issuing or renewing the reseller permit would jeopardize
collection of sales taxes due from the contractor.
(3)(a) Except as otherwise provided in (b) of this
subsection:
(i) Except as provided in (a)(ii) of this subsection, until
June 30, 2013, reseller permits issued, renewed, or reinstated
under this section will be valid for a period of twelve months
from the date of issuance, renewal, or reinstatement; and
(ii) Beginning July 1, 2013, reseller permits issued,
renewed, or reinstated under this section will be valid for a
period of twenty-four months from the date of issuance, renewal,
or reinstatement. However, the department may issue, renew, or
reinstate permits for a period of twenty-four months beginning
July 1, 2011, if the department is satisfied in the same manner
as set forth in subsection (2) of this section.
(b)(i) A reseller permit is no longer valid if the permit
holder's certificate of registration is revoked, the permit
holder's tax reporting account is closed by the department, or
the permit holder otherwise ceases to engage in business.
(ii) The department may provide by rule for a uniform
expiration date for reseller permits issued, renewed, or
reinstated under this section, if the department determines that
a uniform expiration date for reseller permits will improve
administrative efficiency for the department. If the department
adopts a uniform expiration date by rule, the department may
extend or shorten the twelve or twenty-four month period provided
in (a)(i) and (ii) of this subsection for a period not to exceed
six months as necessary to conform the reseller permit to the
uniform expiration date.
(4)(a) The department may revoke a contractor's reseller
permit for any of the following reasons:
(i) The contractor used or allowed or caused its reseller
permit to be used to purchase any item or service without payment
of sales tax, but the contractor or other purchaser was not
entitled to use the reseller permit for the purchase;
(ii) The department issued the reseller permit to the
contractor in error;
(iii) The department determines that the contractor is no
longer entitled to make purchases at wholesale; or
(iv) The department determines that revocation of the
reseller permit would be in the best interest of collecting taxes
due under this title.
(b) The notice of revocation must be in writing and is
effective on the date specified in the revocation notice. The
notice must also advise the contractor of its right to a review
by the department.
(c) The department may refuse to reinstate a reseller permit
revoked under (a)(i) of this subsection until all taxes,
penalties, and interest due on any improperly purchased item or
service have been paid in full. In the event a contractor whose
reseller permit has been revoked under this subsection
reorganizes, the new business resulting from the reorganization
is not entitled to a reseller permit until all taxes, penalties,
and interest due on any improperly purchased item or service have
been paid in full.
(d) For purposes of this subsection, "reorganize" or
"reorganization" means: (i) The transfer, however effected, of a
majority of the assets of one business to another business where
any of the persons having an interest in the ownership or
management in the former business maintain an ownership or
management interest in the new business, either directly or
indirectly; (ii) a mere change in identity or form of ownership,
however effected; or (iii) the new business is a mere
continuation of the former business based on significant shared
features such as owners, personnel, assets, or general business
activity.
(5) The department may provide the public with access to
reseller permit numbers on its web site, including the name of
the permit holder, the status of the reseller permit, the
expiration date of the permit, and any other information that is
disclosable under *RCW 82.32.330(3)(l).
(6) The department must provide by rule for the review of
the department's decision to deny, revoke, or refuse to reinstate
a reseller permit or the department's failure to rule on an
application within the time prescribed in subsection (1)(a) of
this section. Such review must be consistent with the
requirements of chapter 34.05 RCW.
(7) As part of its continuing efforts to educate taxpayers
on their sales and use tax responsibilities, the department will
educate taxpayers on the appropriate use of a reseller permit or
other documentation authorized under RCW 82.04.470 and the
consequences of misusing such permits or other documentation.
(8) As used in this section, the following definitions
apply:
(a) "Contractor" means a person whose primary business
activity is as a contractor as defined in RCW 18.27.010 or an
electrical contractor as defined in RCW 19.28.006.
(b) "Government contracting" means the activity described in
RCW 82.04.190(6).
(c) "Public road construction" means the activity described
in RCW 82.04.190(3).
(d) "Retail construction activity" means any activity
defined as a retail sale in RCW 82.04.050(2) (b) or (c).
(e) "Speculative building" means the activities of a
speculative builder as the term "speculative builder" is defined
by rule of the department.
(f) "Wholesale construction activity" means labor and
services rendered for persons who are not consumers in respect to
real property, if such labor and services are expressly defined
as a retail sale by RCW 82.04.050 when rendered to or for
consumers. For purposes of this subsection (8)(f), "consumer"
has the same meaning as in RCW 82.04.190.
[2010 c 112 § 3; 2009 c 563 § 202.]
NOTES:
*Reviser's note: RCW 82.32.330 was amended by 2010 c 106 § 104, changing subsection (3)(l) to subsection (3)(k).
Effective date -- 2010 c 112 §§ 2, 3, 11, 12, and 15: See note following RCW 82.32.780.
Retroactive application -- 2010 c 112: See note following RCW 82.32.780.
Finding -- Intent -- Construction -- Effective date -- Reports and recommendations -- 2009 c 563: See notes following RCW 82.32.780.