APPLICABILITY OF RETAIL SALES TAX TO SALES OF UNCLAIMED PERSONAL PROPERTY

TAXATION ‑- RETAIL SALES ‑- OFFICES AND OFFICERS ‑- COUNTY ‑- SHERIFF ‑- APPLICABILITY OF RETAIL SALES TAX TO SALES OF UNCLAIMED PERSONAL PROPERTY

The provisions of chapter 82.08 RCW (retail sales tax) are not applicable to sales by a county sheriff of unclaimed personal property pursuant to chapter 63.40 RCW unless the county is for some reason required to be registered for purposes of the business and occupation tax or the public utility tax by reason of its engagement in activities other than the sale of unclaimed personal property.

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                                                                   June 28, 1974

Honorable Robert E. Schillberg
Prosecuting Attorney
Snohomish County Court House
Everett, Washington 98201                                                                                                               Cite as:  AGLO 1974 No. 62

Dear Sir:
 
            This is written in response to your recent request for our opinion on the following question:
 
            ". . .  Are the provisions of RCW Chapter 82.08 (Retail Sales Tax) applicable to sales by a county sheriff of unclaimed personal property pursuant to RCW Chapter 63.40?  . . ."
 
            We answer this question in the negative, as qualified in the following discussion.
 
                                                                     ANALYSIS
 
            RCW 63.40.010 provides that:
 
            "Whenever any personal property, other than vehicles governed by chapter 46.52, shall come into the possession of the sheriff of any county in connection with the official performance of his duties and said personal property shall remain unclaimed or not taken away for a period of six months from date of written notice to the owner thereof, if known, and in all other cases for a period of six months from the time said property came into the possession of the sheriff's office, unless said property has been held as evidence in any court, then, in that event, after six months from date when said case has been finally disposed of and said property released as evidence by order of the court, said county sheriff may at any time thereafter sell said personal property at public auction to the highest and best bidder for cash in the manner hereinafter provided."
 
             [[Orig. Op. Page 2]]
            Your question involves the applicability of the state retail sales tax to sales made by a county sheriff under the provisions of this statute.
 
            The retail sales tax is imposed by RCW 82.08.020 on ". . . each retail sale in this state . . ."  The term "retail sale" is defined by RCW 82.04.050 (applicable to chapter 82.08 RCW by reason of RCW 82.08.010(4)) as including
 
            ". . . every sale of tangible personal property . . . to all persons . . . other than a sale to a person who . . . purchases for the purpose of resale as tangible personal property in the regular course of business without intervening use by such person, . . ."
 
            In addition, RCW 82.08.050 provides that "The tax hereby imposed shall be paid by the buyer to the seller, . . ." and the same statutory provision also states that the tax collected by the seller is to be deemed to be held in trust by him until paid to the state.  The term "seller" is defined in RCW 82.08.010(2) as
 
            ". . . every person making sales at retail or retail sales to a buyer or consumer, . . ."
 
            and the term "person" is defined in RCW 82.04.030 as including a "municipal corporation" and a "political subdivision" of the state of Washington.
 
            Without more, it would thus follow that your question would be answerable in the unqualified affirmative.  However, this is not the case ‑ as there is another statute yet to be considered.  We have reference to RCW 82.08.030 which provides, insofar as is here material, that:
 
            "The [retail sales] tax hereby levied shall not apply to the following sales:
 
            "(1) Casual and isolated sales of property or service, unless made by a person who is engaged in a business activity taxable under chapters 82.04, 82.16 or 82.28:  Provided, That the exemption provided by this paragraph shall not be construed as providing any exemption from the tax imposed by chapter 82.12;
 
            ". . ."
 
             [[Orig. Op. Page 3]]
            The three RCW chapters cited in this qualified exemption from the retail sales tax pertain to the business and occupation tax (chapter 82.04 RCW), the public utility tax (chapter 82.16 RCW), and the tax on mechanical devices (chapter 82.28 RCW).1/

             Also to be noted is RCW 82.04.040 which defines the term "casual or isolated sale" for both the purposes of the business and occupation tax and the retail sales tax as meaning,
 
            ". . . a sale made by a person who is not engaged in the business of selling the type of property involved."
 
            Generally speaking, whether a particular sale or series of sales is within the definition of a "casual sale" is a question which can be answered only by an examination of all the facts and circumstances surrounding the sale in question.  Among the factors which must be taken into consideration are the volume of the sales, and their frequency or regularity.  See, Budget Rent-A-Car v. Dep't. of Rev., 81 Wn.2d 171, 500 P.2d 764 (1972).  In addition, see the annotation entitled "Sales and Use Taxes:  Exemption of Casual, Isolated, or Occasional Sales," in 42 ALR 3rd 292 (1972).2/
 
             In the case of sales made by a county sheriff pursuant to chapter 63.40 RCW, however, we are advised by the state department of revenue that it has long been the administrative practice of that agency to treat all such sales as being "casual sales" within the meaning of the definition contained in RCW 82.04.040, supra.
 
             [[Orig. Op. Page 4]]
            Accordingly, by reason of the department's comprehensive regulation covering such sales, WAC 458-20-106 (copy enclosed), the business and occupation tax is not applicable to a county sheriff's office for its engagement in such sales; and from this, it follows by virtue of RCW 82.08.030, supra, that the retail sales tax will not be required to be collected on account of such sales unless the county, including any department thereof, is for some reason required to be registered for purposes of the business and occupation tax or the public utility tax by reason of its engagement in activities other than the sale of unclaimed personal property under chapter 63.40 RCW.
 
            It is hoped that the foregoing explanation of this matter will be of some assistance to you.
 
Very truly yours,
 
SLADE GORTON
Attorney General
 
TIMOTHY R. MALONE
Assistant Attorney General

                                                         ***   FOOTNOTES   ***
 
1/Chapter 82.28 RCW, we should note, has been repealed by § 29, chapter 218, Laws of 1973, 1st Ex. Sess., but the reference to it in RCW 82.08.030(1), supra, has not been deleted.
 
2/The problem of determining when a series of sales constitutes a "business," i.e., when a series of sales falls outside of the definition of casual or isolated sale, is akin to the problem of determining what constitutes a "business" for purposes of IRC § 1221(1).  For a discussion of these problems see, Surrey, et al., Federal Income Taxation, Cases and Materials, Volume 1, pp. 992-1016.