WAC 458-20-176
Commercial deep sea fishing -- Commercial
passenger fishing -- Diesel fuel. (1) Definitions. As used
herein:
(a) "Commercial deep sea fishing" means fishing done for
profit outside the territorial waters of the state of
Washington. It does not include sport fishing or the
operation of charter boats for sport fishing. (See WAC 458-20-183 for tax liability of such persons.) Nor does the
phrase include the operation or purchase of watercraft for
kelping, purse seining, or gill netting, because such fishing
methods can be legally performed in Washington only within the
territorial waters of the state (the three-mile limit). Therefore, watercraft rigged for fishing by any of these
methods will be deemed for use in other than commercial deep
sea fishing unless proof, including documentation to be
retained by sellers, is furnished that said watercraft will be
used for these purposes exclusively outside the Washington
territorial limit.
(b) "Watercraft" means every type of floating equipment
which is designed for the purpose of carrying therein or
therewith fishing gear, fish catch or fishing crews, and used
primarily in commercial deep sea fishing operations.
(c) "Component part" includes all tangible personal
property which is attached to and a part of a watercraft. It
includes dories, gurdies and accessories, bait tanks, baiting
tables and turntables. It also includes spare parts which are
designed for ultimate attachment to a watercraft. The said
term does not include equipment or furnishings of any kind
which are not attached to a watercraft, nor does it include
consumable supplies. Thus it does not include, among other
things, bedding, table and kitchen wares, fishing nets, hooks,
lines, floats, hand tools, ice, fuel or lubricants.
(d) "Commercial passenger fishing" means that done from
charter boats for sport outside the territorial waters of the
state of Washington.
(2) Business and occupation tax.
(a) Persons engaged in commercial deep sea fishing are
not taxable under the extracting classification with respect
to catches obtained outside the territorial waters of this
state.
(b) Such persons are taxable under either the retailing
or the wholesaling classification with respect to sales made
within this state, unless entitled to exemption by reason of
the commerce clauses of the federal constitution. (See WAC 458-20-193.)
(3) Retail sales tax.
(a) By reason of the exemption contained in RCW 82.08.0262, the retail sales tax does not apply upon sales of
watercraft (including component parts thereof) which are
primarily for use in conducting commercial deep sea fishing
operations, nor does said tax apply to sales of or charges
made for labor and services rendered in respect to the
constructing, repairing, cleaning, altering or improving of
such property.
(b) The retail sales tax applies upon sales made to
persons engaged in commercial deep sea fishing of every other
type of tangible personal property and upon sales of or
charges made for labor and services rendered in respect to the
construction, repairing, cleaning, altering or improving of
such other types of property. Thus, the retail sales tax
applies upon sales to such persons of such things as fishing
nets, hooks, lines, floats and bait; table and kitchen wares;
hand tools, ice, fuel except diesel fuel as noted below, and
lubricants for use or consumption, except only sales of
watercraft and component parts thereof. For sales of food
products see WAC 458-20-119 and 458-20-244.
(4) Exemption certificates required.
(a) Persons selling watercraft or component parts thereof
to persons engaged in commercial deep sea fishing or
performing services with respect to such craft or parts, are
required to obtain from the purchaser a certificate evidencing
the exempt nature of the transaction. This certificate must
identify the purchaser by name and address, and by name of the
watercraft with respect to which the purchase is made, and
must contain a statement to the effect that the property
purchased or repaired is for use primarily in commercial deep
sea fishing operations.
(b) The certificate should be in substantially the
following form:
(c) Incidental use within the waters of this state of
fishing boats which are used primarily in deep sea fishing
operations, will not deprive the owners thereof of the
statutory exemption from the retail sales tax.
(d) In the event the fishing boat with respect to which
an exemption is claimed is of a type used in the waters of
Puget Sound or the Columbia River and the tributaries thereof,
and is not practical for use in deep sea fishing, sellers
should collect the retail sales tax upon all sales of such
boats and component parts thereof and upon charges made for
the repair of the same.
(e) It is a gross misdemeanor for a buyer to make a false
certificate of exemption for the purpose of avoiding the tax.
(5) Use tax.
(a) The use tax does not apply upon the use of watercraft
or component parts thereof.
(b) The use tax does apply upon the actual use within
this state of all other types of tangible personal property
purchased at retail and upon which the sales tax has not been
paid (see WAC 458-20-178) except on diesel fuel as noted
below.
(6) Diesel fuel.
(a) The law provides for sales and use tax exemptions on
diesel fuel for both commercial passenger fishing (charter
boats for sport fishing) and commercial deep sea fishing
operations.
(b) Neither retail sales nor use tax applies with respect
to sales or use of diesel fuel in the operation of watercraft
in commercial deep sea fishing operations or commercial
passenger fishing operations by persons who are regularly
engaged in the business of such operations outside the
territorial waters (three-mile limit) of this state. For
purposes of this exemption a person is not regularly engaged
in either business if the person has gross receipts from the
extra territorial operations of less than five thousand
dollars a year. For persons involved in both commercial deep
sea fishing operations and commercial passenger fishing
operations, the receipts from both shall be added together to
determine eligibility for this exemption.
(c) This exemption is plenary in scope and it is not
required that all of the diesel fuel purchased be used outside
of the territorial waters of this state. If a person
qualifies for the exemptions by virtue of operating a deep sea
fishing vessel, and has the requisite amount of gross receipts
from that activity, all diesel fuel purchases and uses by such
person for such vessel are tax exempt.
(d) Diesel fuel exemption certificates required. Persons
selling diesel fuel to such persons are required to obtain
from the purchaser a certificate evidencing the exempt nature
of the transaction. This certificate must identify the
purchaser by name and address, and by the registered name and
number of the watercraft with respect to which the purchase is
made. It must contain a statement to the effect that the
diesel fuel is for use by a person who is engaged in
commercial deep sea fishing and/or commercial passenger
fishing operations who has annual gross receipts therefrom of
at least five thousand dollars. Blanket certificates covering
all diesel fuel purchases for specified watercraft may be
used, where appropriate. A seller of diesel fuel who accepts
such a certificate in good faith shall not be liable for sales
tax on the diesel fuel sold. Certificates must be retained by
the sellers in their permanent records as evidence of the
exempt nature of diesel sales to eligible buyers. It is a
gross misdemeanor for a buyer to make a false certificate of
exemption for the purpose of avoiding the tax.
(e) The certificate should be in substantially the
following form:
[Statutory Authority: RCW 82.32.300. 88-03-055 (Order 88-1),
§ 458-20-176, filed 1/19/88; 83-07-033 (Order ET 83-16), §
458-20-176, filed 3/15/83. Statutory Authority: RCW 82.01.060(2) and 82.32.300. 78-07-045 (Order ET 78-4), §
458-20-176, filed 6/27/78; Order ET 70-3, § 458-20-176 (Rule
176), filed 5/29/70, effective 7/1/70.]