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January 28 , 2009

Det. No. 07-0254, 28 WTD 1 (2009) A membership tennis and social club requests correction of an assessment that characterized the club as a fitness club and taxed 100% of its initiation fee and dues income.  We find that the assessment incorrectly characterized the taxpayer as a fitness club, find there was a substantial social benefit associated with the privilege of membership, and conclude that a portion of the taxpayer’s initiation fees and dues income was deductible as “bona fide” initiation fees and dues under RCW 82.04.4282.

Det. No. 08-0128, 28 WTD 9 (2009) A foreign corporation engaged in the business of selling consumer goods over the internet and telephone that it markets through direct response advertising (television infomercials) protests the assessment of business and occupation tax, interest, and penalties asserting that does not have substantial nexus with Washington.  We conclude that the activities of an affiliated corporation with taxing nexus in Washington are not significantly associated with maintaining a market for the Taxpayer’s products in Washington.  Absent some additional direct promotional or marketing relationship, there is insufficient evidence to establish nexus for the Taxpayer.  Accordingly we grant the Taxpayer’ petition and reverse the assessment. 

Det. No. 08-0138, 28 WTD 19 (2009) An out-of-state engineering company that provides testing services on bridges, dams, and other structures located in the State of Washington appeals a reclassification of income from service and other activities business and occupation tax to retailing B&O tax and retail sales tax, claiming that its services do not entail rental of equipment with operator.  We hold that the taxpayer does not rent equipment with an operator.













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