Washington Tax Decisions

A taxpayer engaged in the business of providing sunless tanning services and selling beauty products petitions for correction of assessment, asserting that she should not be assessed sales tax on her sunless tanning services because she did not collect retail sales tax from her customers for those services . . . Taxpayer’s petition is denied

Sellers of firewood, ([Taxpayer A], succeeded by [Taxpayer B], collectively referred to as “Taxpayers”) appeal assessments of retail sales tax, retailing business and occupation (B&O) tax, and the evasion penalty, on grounds that the estimated measure of taxes are unreasonable and they were unaware of their tax liabilities. We deny the petitions.

An LLC owning real property appeals a Real Estate Excise Tax Assessment (REET) on a controlling interest transfer, asserting that assessed value of the property or the selling price of the interest represents the true and fair value of the property in light of a permanent conservation easement, which significantly limits the use of the property. As the assessed value of the property on the county tax rolls reflects the true and fair value of the land under RCW 84.34.060, we conclude this value should have been used. Taxpayer’s petition is granted.

A retailer of tobacco products disputes an assessment of tobacco products tax. The taxpayer’s petition is denied.

The recipient of a trust fund accountability assessment (TFAA) objects to an additional amount added. He alleges that he was not a “responsible individual” because the Department did not assist him in obtaining records from another corporate officer, and was not provided the corporate records when they became available. The petition is denied.

A ship building company claimed improvements and repairs it made to a customer’s vessel were exempt from retail sales tax on the basis that the taxpayer delivered the completed vessel to a nonresident purchaser at a point outside of Washington State. Because the taxpayer failed to meet its burden of proof to show it qualified for the exemption under RCW 82.08.0265, we uphold the assessment and deny taxpayer’s petition.

A Washington manufacturer of high power semiconductor diode lasers and components appeals a ruling that it is ineligible for the preferential manufacturing B&O tax rate for the manufacture of semiconductor materials, and the retail sales and use tax exemption for gases and chemicals used in the manufacture of semiconductor materials. Taxpayer’s petition is denied for the B&O tax preferential rate, and granted as to the retail sales tax/use tax exemption.

An internet marketing research company challenges Audit’s denial of its several applications for refund, on the basis that the nonclaim period had not run on some claims, that unusual items in a non-statistical block sample should be excluded from the sample, that panelist costs should be treated as representative third party costs, and two refund requests were improperly denied for lack of substantiation. Petition denied.

An out of state corporation that provides payroll and benefits services to a parent corporation, and that reported wages in this state as the employer of record, protests the assessment of B&O tax under the services classification on estimated income, arguing amounts received for payroll and benefits are excluded reimbursements under WAC 458-20-111 (Rule 111). Because the taxpayer did not prove it has solely agent liability to pay the employer obligations, we conclude the amounts received are not excludible reimbursements. The petition is denied.

A state-run community college (Taxpayer) located in . . . Washington, protests a tax assessment of uncollected retail sales tax on sales to purported nonresidents, asserting that its documentation of the nonresident sales substantially complied with the statutory requirements. Taxpayer further challenges written reporting instructions issued by the Department, which instructed Taxpayer to collect retail sales tax from nonresident students on purchases of tangible personal property at Taxpayer’s bookstore. Taxpayer’s petition is denied.

A contractor, engaged in the custom construction of concrete structures, walkways, and roads, challenges an assessment of retail sales tax, retailing business and occupation (B&O) tax on unreported income, and use tax and/or deferred sales tax on construction materials. Because the contractor has not provided records documenting its unreported income or receipts proving it paid retail sales tax on materials used in its public road construction jobs, we deny the petition.

An individual objects to his liability under a trust fund accountability assessment (TFAA), the amount of the assessment, and the additional amount added to it when corporate records became available. The petition is denied.

An out-of-state web hosting company requests that the Department cancel an assessment of service and other activities business and occupation (B&O) tax, interest, and penalties, because it argues that it does not have substantial nexus. We deny Taxpayer’s petition.