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June 27, 2008

Det. No. 05-0377, 27 WTD 51 (2008) - A taxpayer engaged in the business of selling a satellite-based tracking and communications system that includes instant messaging and position reporting between vehicles in transit and their dispatch centers petitions for correction of assessment.  The Audit Division determined the taxpayer’s income derived from network telephone services and assessed retail sales tax and retailing B&O tax on the taxpayer’s income.  The taxpayer contends its income should be taxed under the service classification as either information or internet service.  We conclude that the taxpayer’s income is properly taxed under the retailing classification as network telephone service.  We further conclude that the measure includes all transactions billed to Washington customers which originate or terminate at the Washington customer’s dispatch center or trucks. Accordingly, we deny the taxpayer’s petition.

Det No. 05-0377R, 27 WTD 61 (2008) - A taxpayer engaged in the business of selling a satellite-based tracking and communications system that includes instant messaging and position reporting between vehicles in transit and their dispatch centers petitions for reconsideration of Det. No. 05-0377.  In that determination, we concluded that the taxpayer’s income derived from network telephone service and, accordingly, was subject to retail sales tax and retailing B&O tax.  On reconsideration, the taxpayer again contends its income should be taxed under the service classification as either information or internet service.  We conclude that Det. No. 05-0377 correctly determined that the taxpayer’s income is properly taxed under the retailing classification as network telephone service.  Accordingly, we deny the taxpayer’s petition.

Det No. 06-0120R, 27 WTD 70 (2008) - A taxpayer that provides water treatment and related services for construction, industrial and marine sites, using a filtration system it manufactures with a technician who operates the system, requests reconsideration of Det. No. 06-0120, which sustained an assessment of use tax on components it purchased that became part of its water treatment systems, which components it purchased without paying retail sales tax.  The taxpayer contends Det. No. 06-0120 erred in its analysis and application of the statutes and rules addressing rental of equipment with operator and the components/ingredients exemption from retail sales tax, erred in ignoring the legislative intent of 2004 changes to RCW 82.04.050(4), and erred in failing to consider actual customer contracts that the taxpayer had provided.  We review the actual contracts and modify our analysis, but continue to deny the request for correction of the assessment.

07-0019, 27 WTD 83 (2008) - Licensed cigarette wholesaler appeals from cigarette tax assessment, claiming that the Audit Division erroneously included in the assessment unstamped cigarettes that taxpayer (1) sold to other Washington licensed cigarette wholesalers, (2) sold to a shop located on an Indian Reservation, and (3) sold and delivered to a cigarette distributor located outside the state.  According to taxpayer, these sales are either expressly exempt from the Washington tax or are permitted by Department of Revenue Department practice.  We conclude that taxpayer has not established that any of its sales of unstamped cigarettes are exempt from the Washington tax or that the cigarettes should be excluded from the assessment.  As a result, taxpayer’s petition is denied.

07-0107, 27 WTD 93 (2008) - A Washington resident who purchased a yacht protests the assessment of use tax and watercraft excise tax contending the yacht was held for resale, and that intervening use of the yacht was either exempt use by a dealer under RCW 82.12.801 or limited to the fair rental value of personal use by a dealer under RCW 82.12.802.  We conclude that RCW 82.12.801 and RCW 82.12.801 do not apply because the taxpayer is not a dealer, and deny the petition.

 

 

 

 

 

 

 

 

 

 

 

 


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