Washington Tax Decisions

A law firm that specializes in personal injury litigation, which incurs litigation expenses that the client remains liable for reimbursing the law firm regardless of the outcome of the litigation, appeals the assessment of B&O tax on its expense reimbursements, asserting the reimbursements were excludable from gross income under WAC 458-20-207 (Rule 207). The petition is granted in part, and denied in part.

Taxpayer appeals the denial of a refund request. Taxpayer asks the Department of Revenue to find it eligible for the preferential rate that applies to the Prescription Drug Warehousing Business & Occupation tax classification. We find that Taxpayer does not meet the requirements for the preferential rate because it is not registered with the federal drug enforcement administration and not licensed by the Washington board of pharmacy. We deny the petition.

Restaurant protests imposition of retail sales tax on sales of bakery goods on the grounds that such food is “sold without eating utensils provided by the seller” under RCW 82.08.0293. The petition is granted.

Auto dealer appeals an opinion letter stating that there is no retail sales tax exemption for used electric motor vehicles. Because the statutory retail sales tax exemption for electric motor vehicles applies only to new vehicles, we confirm that used electric motor vehicles are not exempt from the retail sales tax.

Taxpayer appealed an assessment of retailing business and occupation taxes assessed on amounts received for the development and construction of commercial buildings. The taxpayer argued that it was engaged as a consultant and agent to facilitate the construction. The petition is denied.

Professional employer organization (“PEO”) protests denial of high technology research and development credit on the grounds that it isn’t disqualified from the credit solely by virtue of being a PEO. We remand the petition.