Washington Tax Decisions

A taxpayer appeals a denial of refund applications because it failed to timely submit a properly signed Confidential Tax Authorization Form (CTIA) under WAC 458-20-229 (Rule 229). We grant Taxpayer’s petition and re-instate Taxpayer’s applications for refund.

A husband and wife (Taxpayer) who held a 100% ownership interest in real property transferred the real property to a limited liability company (LLC) in return for a 100% membership interest in the LLC. Subsequently, Taxpayer sold a 49% interest in the LLC to the buyers with two options to purchase the total remaining 51% interest in the LLC. The Department of Revenue’s Special Programs Division discovered the transfer of the 49% interest with the options and determined that the transaction was subject to real estate excise tax (REET). Taxpayer argues that the transaction was exempt from REET pursuant to RCW 82.45.010(2) because a transfer of 49% of an entity does not trigger REET and because an option to purchase, until exercised, does not constitute a sale or transfer of a present beneficial interest. We agree with Taxpayer and grant the petition.

Taxpayer appeals a letter ruling in which it was instructed to source its sales of print jobs, paper, and supplies to the location where the items were delivered. Taxpayer’s petition is denied.