Washington Resources
Summary
SALES TAX: NHSCA worked with the WA Dept. of Revenue. As of 2015/2016 and currently, no sales tax is due upon sale of a home service contract in Washington State. The sate only imposes a retail sales tax on new product, extended warranties since 2005. Members with questions should contact staff at the NHSCA office.
A NAIC/SCIC model state with significant modifications.
HB 2052 became effective on July 25, 1999. It was produced by the State Insurance Department and the SCIC. The law exempts all sellers from compliance unless they remain contractually obligated on the contract. This is an exemption for sellers that turn the contracts over to third parties. Hawaii, New Mexico, Nevada and South Carolina have a similar exemption.
Registration is required and payment of an initial $250 fee ($200 annual renewal thereafter each July 1). Caution: All material changes must be updated on a continuous basis—not just annually. A great deal of information is required on the initial registration.
One has 90 days past July 25 to receive their ‘issued registration’ back from the Department. There is no apparent “deemer” clause. This Act and the state consumer protection act apply and a private cause of action is specifically provided for.
A report must be filed annually by March 1st of each year (with a $20.00 filing fee) on a form prescribed by the commissioner on the funded reserve account (if that financial assurance option is chosen).
The act was modified slightly in 2006 via House Bill 2553 effective October 1, 2006. These mainly affected motor vehicle service contracts. Additional changes in 2006 expanded the definition of service contract such that additional items like towing, rental and road hazard could be covered under service contracts. Incorporation of enhanced solvency standards ($10M/$15M) were amended.
This Washington law is not a preferred approach. The NHSCA or NAIC model woudl have been preferred.
As recent as 2011, some state DOI staff have opined that the law only applies to retail, new product extended warranties. While this opinion is baseless and the state has accepted registrations for years by traditonal home warranty companies under Ch 48. A bill introduced in 2012, HB 2218 passed both chambers but got bypassed in local political wrangling.
Statutes
Chapter 48.110 RCW Service contracts and protection product guarantees, as Amended 2006
REGULATIONS
None at this time
