(1)
Introduction. The department of revenue (department) has
authorized county auditors and the department of licensing to collect the use
tax imposed by chapter 82.12 RCW when a person applies to transfer the
certificate of title of a vehicle acquired without the payment of sales tax.
See
RCW
82.12.045. This rule explains how county
auditors, their sub-agents, and the department of licensing determine the
measure of the use tax. This rule does not relieve a seller registered with the
department of the statutory requirement to collect sales tax when selling
tangible personal property, including vehicles.
RCW
82.08.020 and
82.08.0251.
The use tax reporting responsibilities of Washington residents in other
situations and the general nature of the use tax are addressed in WAC
458-20-178 (Use tax). The
application of tax to vehicles acquired by Indians and Indian tribes is
discussed in WAC
458-20-192 (Indians-Indian
country).
Vehicle licensing locations and information about vehicle
titles and registration are available from the department of licensing on their
website at: dol.wa.gov. This information is also available by contacting the
local county auditor's office listed in the government pages of a telephone
directory.
(2)
What is
use tax based on? For purposes of computing the amount of use tax due,
the value of the article used is the measure of tax. The value of the article
used is generally the purchase price. If the purchase price does not represent
the true value of the article used, the value must be determined as nearly as
possible according to the retail selling price at place of use of similar
vehicles of like quality and character.
RCW
82.12.010.
(3)
Use of automated system to verify
measure of tax. When a person applies to transfer the certificate of
title of a vehicle, county auditors, their subagents, or the department of
licensing must verify that the purchase price represents the true value. In
doing so, county auditors, their subagents, or the department of licensing
compare the vehicle's purchase price to the average retail value of comparable
vehicles using an automated valuing system. The automated valuing system
identifies the average retail value using a database that is provided by a
regional industry standard source specializing in providing valuation services
to local, state, and federal governments, and the private sector.
In limited situations, the automated valuing system's database
may not provide the average retail value for a vehicle. For example, the
automated valuing system's database does not provide average retail value
information for collectible vehicles or vehicles that are over twenty years of
age. In the absence of an average retail value, county auditors, their
subagents, or the department of licensing will determine the true value as
nearly as possible according to the retail selling price at place of use of
similar vehicles of like character and quality. To assist in this process, the
department of revenue and the department of licensing may approve the use of
alternative valuing authorities as necessary.
(4)
What happens when the purchase
price is presumed to represent the true value? County auditors, their
subagents, or the department of licensing will use the purchase price to
compute the amount of use tax due when the purchase price represents the
vehicle's true value. County auditors, their subagents, or department of
licensing will presume the purchase price represents the vehicle's true value
if one of the following conditions is met:
(a)
The vehicle's average retail value, as provided by the automated valuing
system, is less than $7,500.
For example, a person buys a vehicle for $2,800. The automated
valuing system indicates that the vehicle's average retail value is $4,900. The
purchase price is presumed to represent the vehicle's true value because the
average retail value is less than $7,500.
(b) The vehicle's purchase price is not more
than 20 percent below the average retail value as provided by the automated
valuing system.
For example, a person buys a used vehicle for $17,000. The
automated valuing system indicates the vehicle's average retail value is
$20,000. When compared to the average retail value, the purchase price is not
more than 20 percent ($4,000) below the average retail value. Consequently, the
purchase price is presumed to represent the vehicle's true
value.
(5)
What happens when the purchase price is not presumed to represent the
true value? If the vehicle's purchase price is not presumed to be the
true value as explained in subsection (4) of this rule, a person may remit use
tax based on the average retail value as indicated by the automated valuing
system or substantiate the true value of the vehicle using any one of the
following methods.
(a)
Industry-accepted
pricing guide. A person applying to transfer a certificate of title may
provide the county auditor, a subagent, or the department of licensing with
documentation from one of the various industry-accepted pricing guides. The
value from the industry-accepted pricing guide must represent the retail value
of a similarly equipped vehicle of the same make, model, and year in a
comparable condition. The purchase price is presumed to represent the vehicle's
true value if the purchase price is not more than 20 percent below the retail
value.
For example, a person buys a vehicle for $6,500. The automated
valuing system indicates that the vehicle's average retail value is $8,700. An
industry-accepted pricing guide shows that the retail value of a
similarly-equipped vehicle in a comparable condition of the same make, model,
and year is $8,000. When compared to the retail value established by the
industry-accepted pricing guide, the purchase price is not more than 20 percent
($1,600 in this case) below the retail value. Consequently, the purchase price
is presumed to represent the vehicle's true value.
(b)
Declaration of buyer and
seller. A person applying to transfer a certificate of title may provide
to the county auditor, a subagent, or the department of licensing a Declaration
of Buyer and Seller Regarding Value of Used Vehicle Sale (REV 32 2501) to
substantiate that the purchase price is the true value of the vehicle. The
declaration must be signed by both the buyer and the seller and must certify to
the purchase price and the vehicle's condition under penalty of perjury. The
department may review a declaration and assess additional tax, interest, and
penalties. A person may seek review of an assessment to the department as
provided in WAC
458-20-100 (Informal
administrative reviews).
The declaration is available on the department's website at
dor.wa.gov. It is also available at all vehicle licensing locations,
department's field offices, or by writing:
Department of Revenue
Taxpayer Services
P.O. Box 47478
Olympia, WA 98504-7478
(c)
Written appraisal. A person
applying to transfer a certificate of title may present to the county auditor,
a sub-agent, or the department of licensing a written appraisal from an
automobile dealer, insurance or other vehicle appraiser to substantiate the
true value of the vehicle. If an automobile dealer performs the appraisal, the
dealer must be currently licensed with the department of licensing dealer
services division or be a licensed vehicle dealer in another jurisdiction.
The written appraisal must appear on company stationery or have
the business card attached and include the vehicle description, including the
vehicle make, model, and identification number (VIN). The person performing the
appraisal must certify that the stated value represents the retail selling
price of a similarly equipped vehicle of the same make, model, and year in a
comparable condition. The department may review an appraisal and assess
additional tax, interest, and penalties. A person may seek review of an
assessment to the department as provided in WAC
458-20-100 (Informal
administrative reviews).
(d)
Declaration of use tax. A person applying to transfer a
certificate of title may present to the county auditor, a sub-agent, or the
department of licensing a Declaration of Use Tax (REV 32 2486e) to substantiate
the true value of the vehicle. An authorized employee of the department must
complete the declaration. Determining the true value ma require a visual
inspection that is not available at all department locations.
(e)
Repair estimate. A person
applying to transfer a certificate of title may present to the county auditor,
a subagent, or the department of licensing a written repair estimate, prepared
by an auto repair or auto body repair business. This estimate will then be used
to assist with determining the true value of the vehicle. The written estimate
must appear on company stationery or have the business card attached. In
addition, the written estimate must include the vehicle description, including
the vehicle make, model, and identification number (VIN), and an itemized list
of repairs. The department may review an appraisal and assess additional tax,
interest, and penalties. A person may seek review of an assessment to the
department as provided in WAC
458-20-100 (Informal
administrative reviews).
The purchase price is presumed to represent the true value if
the total of the purchase price and the repair estimate is not more than 20
percent below the average retail value. For example, a person purchases a
vehicle with extensive bumper damage for $13,700. The automated valuing system
indicates that the vehicle's average retail value is $18,000. An estimate from
an auto body repair business indicates a cost of $2,500 to repair the bumper
damage. The purchase price is presumed to represent the vehicle's true value
because when the total of the purchase price and the repair estimate ($13,700 +
$2,500 = $16,200) is compared to the average retail value, the total is not
more than 20 percent below the average retail value ($18,000).
Notes
Wash. Admin. Code
§
458-20-17802
Amended by
WSR
14-21-104, Filed 10/15/2014, effective
12/14/2014
Amended by
WSR
16-12-075, Filed 5/27/2016, effective
6/27/2016
Amended by
WSR
20-14-064, Filed 6/26/2020, effective
10/1/2020
Amended by
WSR
21-01-130, Filed 12/16/2020, effective
1/16/2021
Statutory Authority:
RCW
82.32.300 and
82.12.045. 01-22-008, §
458-20-17802, filed 10/26/01, effective
11/26/01.
