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December 2006

Det. No. 04-0075, 25 WTD 95 (2006) — Taxpayer who operates an air cargo service that does business both within and without Washington appeals the assessment of Other Public Utility Tax on unreported revenues earned from carrying air cargo entirely within Washington and the use tax assessed on the purchase of aircraft and repairs used to transport freight in Washington.  We find that while Federal law prevents a state from taxing revenues derived from hauling people or mail in federally regulated airspace or across state lines, there is no such prohibition against taxing income derived from hauling air cargo intrastate. Similarly, the exemption for use tax on carrier property used to transport goods in interstate commerce is only applicable where the taxpayer documents the aircraft are used primarily (more than 50% of the time) in interstate commerce


Det. No. 05-0115, 25 WTD 102 (2006) — An out-of-state company that provides mobile satellite uplink services and some production services for live events appeals an assessment of B&O tax on its revenues and use tax on its trucks.  We conclude that the taxpayer is taxable under the service classification, its use of the trucks was not exempt, but value was incorrectly calculated. 


Det. No. 05-0131, 25 WTD 116 (2006) — Nonprofit hospital petitions for refund of retail sales tax it paid on the purchase of meals from third party vendors, which the taxpayer provided to its mentally ill and low income patients.  To the extent the taxpayer’s patients are senior citizens or disabled or low-income persons, we conclude that the taxpayer’s purchases qualify for the RCW 82.08.0293(3)(b) exemption from retail sales tax. 


Det. No. 05-0145, 25 WTD 120 (2006) — An out-of-state cabinet manufacturer requests a determination that it is exempt from tax under the RCW 82.04.423 direct sellers exemption.  We hold that this exemption is not available to a seller of kitchen cabinets


Det No. 05-0151, 25 WTD 127 (2006) — A food processor protests the denial of the machinery and equipment (M&E) retail sales tax exemption for M&E used at one of the taxpayer’s manufacturing sites.  We conclude that the M&E is exempt because it is “used directly” in the taxpayer’s “manufacturing operation.”


Det No. 05-0162, 25 WTD 133 (2006) — A port requests a refund of retail sales tax paid to a contractor to renovate its boat launch ramp and contends the renovation is exempt from retail sales tax as public road construction.  The boat launch ramp was not used primarily for vehicular traffic.  We conclude the renovation charges are not for public road construction and are subject to retail sales tax


Det No. 05-0172, 25 WTD 138 (2006) — A storage facility operator protests the assessment of motor transportation public utility tax (PUT) on income it received for transporting its customers’ business records to and from its storage facilities.  It also protests a late payment of assessment penalty.  We sustain the assessment and deny the petition for correction of the assessment.


Det No. 05-0193, 25 WTD 143 (2006) — A manufacturer appeals the disallowance of Machinery and Equipment (M&E) retail sales and use tax exemptions taken for paving expenses related to the installation of a propane pipe and on the purchase of a portable loading ramp.    We conclude that the paving work qualified for exemption as necessary labor and services rendering in installing qualifying equipment and that the loading ramp is used directly and also eligible for the exemption.


Det No. 05-0196, 25 WTD 148 (2006) — Two companies protest the assessment of use tax on boomsticks and boom gear brought into Washington when they hired a marine towing company to tow their log booms into this state.  We hold that use tax is due on boomsticks and boom gear, but we remand the matter to the Audit Division to reassess the use tax on the boom gear and possibly on the boomsticks (providing the taxpayers have records) based on the reasonable rental value of the items



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