WAC 458-20-171
Building, repairing or improving streets,
roads, etc., which are owned by a municipal corporation or
political subdivision of the state or by the United States and
which are used primarily for foot or vehicular traffic.
Definitions
As used herein:
The word "contractor" means a person engaged in the business
of building, repairing or improving any street, place, road,
highway, easement, right of way, mass public transportation
terminal or parking facility, bridge, tunnel, or trestle which is
owned by a municipal corporation or political subdivision of the
state or by the United States and which is used or to be used
primarily for foot or vehicular traffic, either as a prime
contractor or as a subcontractor. It does not include persons
who merely sell or deliver road materials to such contractors or
to the public authority whose property is being improved. It
also does not include persons who construct streets, roads, etc.
owned by the state of Washington. (See WAC 458-20-170 for the
tax liability of such persons.)
The term "street, place, road, highway, etc." is used in the
ordinary sense that the combination of such words implies. It
includes docks used primarily by ferry boats operated in
connection with a street, road or highway, but does not include
railroads, wharves, moorings, hallways, catwalks, or runways,
aprons or taxiways for the landing, take-off or movement of
airplanes within airports or landing fields; nor does it include
ferry boats, even though the ferry be operated in connection with
a street, road or highway. It includes roads and walks which are
not open to the public generally, but which may be restricted to
use by the military or by employees of a department or
instrumentality of the United States.
The word "place" means only an area similar to a street or
pedestrian walk, such as thoroughfares in various cities
designated "places" for the purpose of preserving the continuity
of street names or house numbers; generally, a street of shorter
length than others.
The term "building, repairing or improving of a publicly
owned street, place, road, etc.," includes clearing, grading,
graveling, oiling, paving and the cleaning thereof; the
constructing of tunnels, guard rails, fences, walks and drainage
facilities, the planting of trees, shrubs and flowers therein,
the placing of street and road signs, the striping of roadways,
and the painting of bridges and trestles; it also includes the
mining, sorting, crushing, screening, washing and hauling of
sand, gravel, and rock taken from a public pit or quarry. It
also includes the constructing of road and street lighting
systems, even though portions of such systems also are used for
purposes other than street and road lighting; also the
constructing of a drainage system in streets and roads, even
though such system is also used for the carrying of sewage:
Provided, That the drainage facilities are sufficient for
disposal of the normal runoff of surface waters from the
particular streets and roads in which the system is constructed
or an ordinance authorizing the construction of a combined sewer
system is incorporated by reference in the contract and the
contract or specifications clearly indicate that the system is
designed and intended for the disposal of the normal runoff of
surface waters from the streets and roads in which the system is
constructed.
The term includes any contract for the readjustment,
reconstruction or relocation of the facilities of any public,
private or cooperatively owned utility or railroad in the course
of building, repairing or improving a street, place, road, etc.,
which is owned by a municipal corporation or political
subdivision of the state or by the United States, the cost of
which readjustment, reconstruction, or relocation is the
responsibility of the public authority whose street, place, road,
etc., is being built, repaired or improved. It also includes
building or repairing mass transportation facilities owned by a
municipal corporation or political subdivision of the state or by
the United States.
Except as provided above, the term does not include the
constructing of water mains, telephone, telegraph, electrical
power, or other conduits or lines in or above streets or roads,
unless such power lines become a part of a street or road
lighting system as aforesaid; nor does it include the
constructing of sewage disposal facilities, nor the installing of
sewer pipes for sanitation, unless the installation thereof is
within, and a part of, a street or road drainage system.
Business and Occupation Tax
Such contractors are taxable under the public road
construction classification upon their total contract price.
The business and occupation tax does not apply to the cost
of or charge made for labor and services performed in respect to
the mining, sorting, crushing, screening, washing, hauling, and
stockpiling of sand, gravel, and rock, when such sand, gravel, or
rock is taken from a pit or quarry which is owned by or leased to
a county or city and such sand, gravel or rock is
(a) Stockpiled in said pit or quarry for placement on the
street, road, or highway by the county or city itself using its
own employees, or
(b) Placed on the street, road, or highway by the county or
city itself using its own employees, or
(c) Sold by the county or city at actual cost to another
county or city for road use.
Retail Sales Tax
The retail sales tax applies upon the sale to such
contractors of all materials including prefabricated and precast
items, equipment and supplies used or consumed in the performance
of such contracts.
The retail sales tax does not apply upon any portion of the
charge made by such contractors.
The sales tax does not apply to charges made for labor and
services which are exempt from business tax as indicated above.
Use Tax
The use tax applies to the use by all contractors of all
materials including prefabricated and precast items, equipment
and supplies upon which the retail sales tax has not been paid. This tax also applies in respect to articles produced or
manufactured by them for commercial use. (See WAC 458-20-134.)
The use tax does not apply in respect to the use of any
sand, gravel, or rock to the extent of the cost of or charges
made for labor and services performed in respect to the mining,
sorting, crushing, screening, washing, hauling, and stockpiling
such sand, gravel, or rock, when such sand, gravel, or rock is
taken from a pit or quarry which is owned by or leased to a
county or a city, and such sand, gravel, or rock is either (1)
stockpiled in said pit or quarry for placement or is placed on
the street, road, place, or highway of the county or city by the
county or city itself (i.e., by its own employees), or (2) sold
by the county or city to a county or a city at actual cost for
placement on a street, road, place, or highway owned by the
county or city. This exemption shall not apply to the use of
such material to the extent of the cost of or charge made for
such labor and services, if the material is used for other than
public road purposes or is sold otherwise than as here indicated.
(For lien of unpaid taxes on the retained percentage
withheld on public improvement contract, see WAC 458-20-217.)
[Order ET 71-1, § 458-20-171, filed 7/22/71; Order ET 70-3, §
458-20-171 (Rule 171), filed 5/29/70, effective 7/1/70.]