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November 2006

Det. No. 04-0266, 25 WTD 1 (2006) – A nonresident requests cancellation of assessments for use tax/deferred retail sales tax and Watercraft Excise Tax (WET) on a yacht he purchased in Washington. We conclude: the vessel was subject to retail sales tax because it was not removed from the state within 45 days, and the vessel was subject to WET because it did not meet any exception from vessel registration.  We deny the petition.


Det. No. 05-0020, 25 WTD 12 (2006) – An out-of-state corporation, whose sole assets are a motor home and a utility trailer that its sole shareholders, Washington residents, lease from it and use in Washington, protests the assessment of deferred retail sales or use tax on those assets, contending Washington cannot assess taxes against the corporation because it is a nonresident and did not bring the motor home or trailer into Washington.  We find the corporation is merely the alter ego of its shareholders, and conclude that equity requires we disregard the corporate entity and the lease arrangement, and sustain the assessment against both the corporation and the shareholders on the full value of the motor home and trailer. 


Det. No. 05-0020R, 25 WTD 25 (2006) – A Washington husband and wife, and an out-of-state corporation they formed to purchase and lease back to them a motor home and trailer, appeal Det. No. 05-0020, which upheld use tax assessments against both the couple and the corporation on the full value of the motor home and trailer.  The taxpayers assert that Det. No. 05-0020 erred in applying the doctrine of entity disregard, erred in concluding Washington had jurisdiction to tax the corporation, and erred in other respects.  We find no error of law or of fact that necessitates reconsideration of the decision, and deny the petition.  


Det. No. 05-0141, 25 WTD 35 (2006) – Taxpayer protests first actual use date for watercraft excise tax (WET) and use tax assessment for his vessel.  We conclude that the first taxable use date for the use tax assessment was correct.  However, we conclude that the WET assessment was incorrect and therefore reverse the WET assessment (and related penalties & interest).


Det No. 05-0174, 25 WTD 48 (2006) – An out-of-state manufacturer/wholesaler appeals the assessment of Business and Occupation (B&O) tax on sales of goods to Washington customers.  We conclude the goods were received in this state and the taxpayer had nexus.  The taxpayer did not qualify for the direct seller’s exemption.  The B&O tax applied to its sales revenues. 


Det No. 05-0195, 25 WTD 61 (2006) – A nonresident who purchased a yacht in Washington, and later brought it back to Washington and left it with a repair yard for more than four months, without filing a nonresident repair affidavit or obtaining identification documents from the Department of Licensing, requests cancellation of assessments for deferred retail sales tax or use tax and Watercraft Excise Tax (WET).  We conclude that the taxpayer met the requirements of RCW 82.08.0266 and Rule 238(4)(a), but became liable for use tax and WET during the subsequent return to the state.  We conclude that the late-filed repair affidavit was ineffective.  We remand the WET assessment for adjustment.


Det No. 05-0206E, 25 WTD 72 (2006) – An employer of record desires “pass through” treatment under WAC 458-20-111 (Rule 111) for wages it received and paid to agricultural workers.  We hold that Taxpayer has not carried its burden of proof that it was an agent of its claimed principal.


Det No. 05-0247, 25 WTD 85 (2006) – Taxpayer petitions for a refund of real estate excise tax (REET) paid on an assignment of an interest in real property pursuant to a property settlement agreement between former partners in a meretricious relationship.   The petition is denied.


Det No. 05-0345, 25 WTD 90 (2006) – A manufacturer seeks the M&E exemption under WAC 458-20-13601 (Rule 13601) for a temporary storage facility consisting essentially of an asphalt pad and a canopy roof.  Taxpayer’s petition is denied.



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