Director's Rule 5-803
Consignees, bailees, factors, agents and auctioneers of tangible personal property
Consignees, bailees, factors, agents and auctioneers of tangible personal property
(1) Introduction. A consignee, bailee, factor, agent or auctioneer, refers to one who has either actual or constructive possession of tangible personal property belonging to another person, and selling or calling for bids on such property on behalf of the owner(see SMC 5.45.040).
(2) Definition. The term "constructive possession" means possession of the power to transfer the title of tangible personal property belonging to others.
(3) Business License Tax.
(a) Retailing and wholesaling. Every person acting as an agent, including consignee, bailee, factor or auctioneer having either actual or constructive possession of tangible personal property, or having possession of the documents of title thereto, with power to sell such tangible personal property in his or its own name and, actually so selling, shall be deemed the seller of such tangible personal property and taxable under the retailing or wholesaling classification of the business license tax. The consignor, bailor, principal, or owner shall be deemed a seller of such property to the agent, consignee, bailee, factor or auctioneer and shall be taxable as a wholesaler with respect to such sales.
The mere fact that the agent, consignee, bailee, factor or auctioneer makes a sale creates a presumption that such agent, consignee, bailee, factor or auctioneer actually sold in his or its own name. This presumption is controlling unless rebutted by proof satisfactory to the Director.
The retailing or wholesaling business license tax is calculated by multiplying the applicable tax rate against the selling price of the item sold or auctioned. There is no deduction for any commission which the agent, consignee, bailee, factor or auctioneer receives as payment for services. (Refer to Seattle Rule 5-130 (1 )(a) for definition of selling price.)
(b) Acting as agents and brokers. Any person who claims to be acting merely as agent or broker in promoting sales for a principal or in making purchases for a buyer, will have such claim recognized only when the contract or agreement between such persons clearly establishes the relationship of principal and agent and when the following conditions are complied with:
(i) The books and records of the agent or broker show the transactions were made in the name and for the account of the principal, and show the name of the actual owner of the property for whom the sale was made, or the actual buyer for whom the purchase was made.
(ii) The books and records show the amount of the principal's gross sales, the amount of commissions and any other incidental income derived by the broker or agent from such sales. The principal's gross sales must not be reflected as income of the agent. Commissions must be computed according to a set percentage or amount, which is agreed upon in the agency agreement.
(iii) No ownership rights may be conferred to the agent or broker unless the principal refuses to pay, or refuses to abide by the agency agreement.
(iv) Bulk goods sold or purchased on behalf of a principal must not be co-mingled with goods belonging to another principal or lose their identity as belonging to the particular principal, Sales or purchases of any goods which have been comingled or lost their identity as belonging to the principal shall be taxed as retail or wholesale sales.
(c) Service and other business activities. Every agent, consignee, bailee, factor or auctioneer who makes a sale in the name of the actual owner, as agent of the actual owner, or who purchases as agent of the actual buyer, and meets the above criteria is taxable under the service and other business activities classification upon the gross income derived from such business.
Effective: July 15, 2005
DIRECTOR'S CERTIFICATION
I, Kenneth J. Nakatsu, Director of the Department of Executive Administration of the City of Seattle, do hereby certify under penalty of perjury of law, that the within and foregoing is a true and correct copy as adopted by the City of Seattle, Department of Executive Administration.