Seattle Comptroller/Clerk Files Index
Information modified on July 20, 2016; retrieved on May 1, 2024 3:03 PM
Clerk File 319894
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Seattle Business Tax Rule No. 5-193, "Interstate Activities of Waterborne Transportation". |
Description and Background | |
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Current Status: | Filed |
Legislative History | |
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Date Filed with Clerk: | July 19, 2016 |
PDF Copy: | Clerk File 319894 |
Text | |
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SeattleRule 5-193 "Interstate Activities of Waterborne Transportation."
(1) Introduction. This section explains the Seattlebusiness and occupation tax on activities involving waterborne transportationof persons or property.
(2) Business and Occupation Tax.
(a) Service Tax. Incomputing tax there may be deducted from gross income the amount thereofderived as compensation for performance of services which in themselvesconstitute interstate or foreign commerce to the extent that a tax measured therebyconstitutes an impermissible burden upon interstate or foreign commerce. A taxdoes not constitute an impermissible burden upon interstate or foreign commerceunless the tax discriminates against that commerce by placing a burden thereonthat is not borne by intrastate commerce, or unless the tax subjects theactivity to the risk of repeated exactions of the same nature from otherstates. Transporting across the state's boundaries is deductible, whereassupplying such transporters with facilities, arranging accommodations,providing funds and the like, by which they engage in such commerce is taxable.
(1) Deductible income. Deductible income includes the incomefrom those activities which consist of the actual transportation of persons orproperty across the state's boundaries.
(2) Taxable income. Taxable income includes, but is not limitedto:
(i) Compensation received by persons engaged in business within this City for the performance ofbusiness activities which are only ancillary to waterborne transportationacross the state's boundaries is taxable.
(ii) Compensation received by merchandise brokers or commissionmerchants for services rendered to principals engaged in interstate or foreigncommerce is taxable.
(iii) Compensation received by contracting, stevedoring or loading companies for services performedwithin this City is taxable.
(iv) Compensation received for hauling goods to the dock orrailhead by a person who is not responsible for transporting the goods acrossstate boundaries is taxable.
(b) Persons engaged instevedoring and associated activities involving the movement of goods andcommodities in waterborne interstate or foreign commerce are subject to servicebusiness tax upon the gross proceeds from such activities. Stevedoring andassociated activities means all activities of a labor, service ortransportation nature whereby cargo is loaded or unloaded to or from vessels orbarges, passing over, onto, or under a wharf, pier, or similar structure,including also the moving of cargo to a warehouse or similar holding or storageyard or area to await further movement in import or export; also the movementto a consolidation freight station to be stuffed, unstuffed, containerized,separated or otherwise segregated or aggregated for delivery or loading on anymode of transportation for delivery to its consignee. Specific activities includedin this definition are: wharfage, handling, loading, unloading, moving of cargoto a convenient place of delivery to the consignee or a convenient place forfurther movement to export mode; documentation services in connection with thereceipt, delivery, checking, care, custody and control of cargo required in thetransfer of cargo; imported automobile handling prior to delivery to consignee;terminal stevedoring and incidental vessel services, including but not limitedto plugging and unplugging refrigerator services to containers, trailers, andother refrigerated cargo receptacles, and securing ship hatch covers.
(c) Persons engaging inbusiness as an international steamship agent, international customs housebroker, international freight forwarder, vessel and/or cargo charter broker inforeign commerce, or international air cargo agent are subject to the servicebusiness tax upon gross income with respect to such international activities.
(3) Persons, including dock companies or wharfagecompanies, are permitted no deduction from gross income of amounts received forservices performed in this City consisting of the handling of cargo or freighteven though such cargo or freight has moved or will move across the state'sboundaries.
(4) No deduction is permitted with respect to grossincome derived from activities which are ancillary to transportation across thestate's boundaries, which as income received by a wharf company or warehousecompany for the storage of goods. The mere ownership or operation of facilitiesby means of which others engage in foreign or interstate commerce is anactivity ancillary to such commerce and any income received therefrom istaxable.
Insofaras the transportation of goods is concerned, the interstate movement of cargoor freight ceases when the goods have arrived at the destination to which itwas billed and carried by the out-of-state shipper, and no deduction ispermitted of the gross income derived from transporting the same goods byanother shipper under a new contract of carriage from such point of destinationin this city to another point within this state. Thus, freight is billed fromSan Francisco, or foreign point, to Seattle. After arrival in Seattle it istransported to Spokane under another contract. No deduction is permitted of thegross income received for the transportation from Seattle to Spokane. Again,freight is billed from San Francisco, or a foreign point, to a line carrier'sterminal, or a public warehouse in Seattle. After arrival in Seattle it istransported under another contract from the line carrier's terminal or publicwarehouse to the buyer's place of business in Seattle. However, if the movementof freight is under a continuous contract and bill of lading from an interstateor foreign location to a location in Seattle, the freight carrier operatingunder the continuous contract and bill of lading is entitled to a deductionfrom tax.
Theinterstate movement of cargo or freight begins when the goods are committed toa carrier for transportation out of the state, and the carrier starts thetransportation to a point outside the state.
Fortransportation of goods by way of motor carrier and other trucking activities,refer to Rule 5-481.
(5) Service income to be apportioned.
(a) Incometaxable under the service and other business activities tax classification,other than sales of intangibles, must be apportioned using the two-factorapportionment method in SMC 5.45.081(F) and RCW 35.102.130(3).
(b) Deductions allowed for actualtransportation of persons or property across state boundaries may be deductedfrom worldwide service and other business activity income to arrive at totalapportionable income. SMC 5.45.081(G)(1).
DIRECTOR'S CERTIFICATION
I, Glen M. Lee, Finance Director of the City ofSeattle, do hereby certify
under penalty of perjury of law, that the within andforegoing is a true and
correct copy as adopted by the City of Seattle,Department of Finance and
Administrative Services.
DATED this ______ day of July 2016.
CITY OF SEATTLE,
a Washingtonmunicipality
By: ____________________________________
Glen M. Lee,Finance Director
Department ofFinance and Administrative Services
Effectivedate: July 14, 2016
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