Washington Tax Decisions

Cosmetology schools appeal assessments of service and other activities business and occupation (B&O) tax on tuition fee income, contending that the income is deductible from gross income under RCW 82.04.4282 and WAC 458-20-167. The taxpayers’ petitions are denied

Out-of-state nutritional supplement manufacturer and wholesaler protests business and occupation (“B&O”) tax imposed on the grounds that [the buyer does not receive the goods] in Washington. The petition is granted.

Taxpayer, a federal records management contractor, protests the assessment of Business & Occupation (B&O) tax on income earned in Washington State where the work was performed by a subcontractor. Because the advice that it did not owe tax came from the subcontractor and a federal agency, and not the Department of Revenue, the Taxpayer owes the taxes as assessed.

A taxpayer in the business of fumigating shipping cargo containers and their contents for extermination and pest control purposes appeals an assessment reclassifying its gross income from the retailing B&O tax classification to the services and other activities tax classification. We affirm the assessment.

A taxpayer appeals a successorship assessment after it assumed the debts of an insolvent company in exchange for most of the company’s assets. Because the taxpayer was a successor of the company, it was liable for the company’s unpaid taxes. We deny the petition.

A Washington-based firm providing engineering and repair services on [tangible personal property] requests a refund of service and other activities business and occupation (“B&O”) tax, interest, and additional assessment penalties, contending its income should be apportioned and that it had no notice of the change in nexus law. We deny the petition.

A company (“Taxpayer”) primarily engaged in the business of collecting construction, demolition, and land clearing debris (CDL) and hauling it to third-party recycling facilities petitions for Executive Reconsideration of a determination concluding that: 1) Taxpayer’s income from the collection and hauling of CDL to third-party recycling facilities for compensation is subject to the Service & Other Activities business and occupation (B&O) tax classification, rather than the Motor Transportation or Urban Transportation public utility tax (PUT) classification; 2) Taxpayer’s rental of a trackhoe for use at its recycling facility does not qualify for the manufacturer’s machinery and equipment retail sales tax exemption (M&E exemption); and 3) Taxpayer failed to establish that it paid retail sales tax on recycling containers at the time of purchase. Taxpayer’s petition is granted with regard to the first issue, but denied as to the remaining issues; however, with regard to the third issue, the Department will adjust the measure of the retail sales tax on the recycling containers to reflect the actual purchase price.

A timeshare association management company petitions for the correction of an assessment of service and other activities business and occupation (B&O) tax collected on housekeeping fees it charged to timeshare owners after their stay to clean the residences before the next timeshare owner takes possession of the unit. We hold that only the fees collected for the cleaning of common areas are deductible from Taxpayer’s B&O tax base, which means that the housekeeping fees collected for the cleaning of the residences themselves are not deductible. Taxpayer’s petition is denied