Use/Sales tax while leasing onto a company? WA state

You are right, he shouldn't have been charged since his truck was for interstate use. You'll need to call the main department of licensing on Monday and ask them the proper procedure to get that refunded.

Now, if you or he is a Washington state resident, there is no state income tax. Only taxes filed in Washington state is business taxes and sales tax.

FYI: if you do any intrastate state loads in WA, there is like 3 different taxes you'll have to pay on the gross revenue of that load. B&O, UTC, and I can't remember the other one, but you can find it in the business tax guide on the department of revenue website for trucking specific guides.

Edit: here's the dor trucking specific guide http://dor.wa.gov/Content/DoingBusiness/BusinessTypes/Industry/Truck/default.aspx

 

Yeah, I'm in Washington. No I can't. Everyone I've talked to seems to be oblivious to the transportation industry.

I know from a friend of mine, that the profit gauges system from Kevin Rutherford uses a Cpa in Washington state. I just don't feel like paying them I think $100/month to do everything for me.

I've been doing my own and use an accounting system to track everything. Plus, the software does invoices and make it easy to track stuff like when a broker is 60 days overdue. Only had that once, but after one phone call and forwarding the email with the original pod and invoice, I had the check within 4 days.

If you have any questions, I'll try and help. For the most part, Washington state is very easy. All interstate revenue is tax exempt for the state taxes, it's only your intrastate loads you need to pay taxes on.

 

It all depends. There are a couple states that have not signed onto the agreement waiving sales tax. My state did this in 2003.

You don't need a tax person or an accountant, you need to a talk to your state people and get it straight.

Oh and the interstate and intrastate revenue has nothing to do with registration, this is taxed the same no matter what - it is revenue.

 

In the state of Washington it actually does. Anything that is intrastate in Washington state is taxed based off the gross revenue,no deductions allowed for the wa state b&o tax, put tax, and the other one is a use/sales tax. Those 3 only apply to intrastate loads for business registered in Washington.

Here is directly from Washington state department of revenue
Public Utility Tax (PUT)
Persons operating motor driven vehicles used in transporting persons or property on a for hire basis are subject to the Public Utility Tax. The transportation of persons or property across state boundaries, into and out of Washington, via “through freight billing,” or shipments to ports for export, are allowed deductions for interstate transportation.

Business and Occupation (B&O) Tax
Many trucking industry businesses located in Washington are subject to the state B&O tax. This includes corporations, limited liability companies, partnerships, and sole proprietors. The B&O tax is a gross receipts tax on the business. It is measured on the value of products, gross proceeds of sale, or gross income of the business. There are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business. Trucking related businesses generally report income under the retailing, retailing of Interstate Transportation Equipment, wholesaling, and service and other activities B&O tax classifications.

 

Well thanks for the clarification but it raises the question of the sales/use tax that is applied to the transfer of the truck to the new owner, is it based on the revenue or projected revenue going forward at that time or is it a flat percentage of the purchase price?

 

What software are you using?

 

For the sales/use tax question, if the trailer or truck is used for more then 50% interstate commerce there is no sales/use tax applied. Washington state makes it very confusing when those taxes are applied and under what circumstances. I purchased a trailer this year out of state and had it registered in Washington and wasn't charged any tax at all because it was going to be used mainly for interstate work. Plus the plates don't expire on the trailer.

 

I use a piece of software called frontaccounting. It's a Web based open-source software that is very powerful and has more features than I'll ever use, but it allows me to track eveything, create invoices, see a p&l statement as well as a cash flow statement. I can attach to each invoice all my documents related to it like receipts, bol's, scale tickets, and trip sheets. Making filling easier since it's all electronic.