Washington Tax Decisions

2019
Title Date Document Description
Det. No. 16-0107, 38 WTD 106 (2019) 38WTD106.pdf

An out-of-state company that sells computer software to resellers or end users and provides online computer support services to customers in Washington could be liable for Washington’s wholesaling B&O tax, retailing B&O tax, retail sales or use tax, and service and other activities B&O tax, if the company had nexus with Washington pursuant to RCW 82.04.067. The TI&E tax ruling correctly informed Taxpayer on its potential tax liability for Washington state excise taxes and is affirmed.

Det. No. 16-0334, 38 WTD 115 (2019) 38WTD115.pdf

A financial institution that receives income from subservicing mortgage loans petitions for correction of an assessment that apportioned its loan servicing income based on the location of the borrower. Taxpayer maintained that the subservicing income should be attributed to where the services are performed. We conclude that Taxpayer’s loan servicing income should be apportioned based on the location of the borrower as provided in WAC 458-20-19404[A]. The assessment is sustained.

Det. No. 17-0008R, 38 WTD 121 (2019) 38WTD121.pdf

A vendor of medical devices and equipment requests reconsideration of Det. No. 17-0008 denying that portion of its requested review of an assessment of retail sales tax on gross proceeds from sales to health care facilities of adaptive servo-ventilation devices on the basis that they are prosthetic devices. We deny Taxpayer’s petition.

Det. No. 17-0197, 38 WTD 126 (2019) 38WTD126.pdf

A loan servicer disputes the calculation of its apportionable income and the resulting assessment of service and other activities B&O tax on several grounds. We deny in part . . . .

Det. No. 17-0315, 38 WTD 141 (2019) 38WTD141.pdf

A seller of cleaning and maintenance products at retail and wholesale protests a tax assessment based on unreported sales. Taxpayer argues that the amounts at issue were the result of price adjustments that either (1) did not constitute part of Taxpayer’s gross proceeds of sale, or (2) constituted bona fide discounts that are deductible from Taxpayer’s taxable income. We deny the petition.

Det. No. 18-0006, 38 WTD 149 (2019) 38WTD149.pdf

A Washington-based corporation that owns and operates a convenience store that makes retail sales of . . . tobacco products . . . , disputes the assessment of [the tobacco products] tax on certain purchases it admittedly made from unlicensed tobacco distributors for which it did not pay [the] tax. Taxpayer argues that the estimate that served as the basis for the tax assessment is manifestly unreasonable. We deny the petition.

Det. No. 18-0041, 38 WTD 158 (2019) 38WTD158.pdf

A national title insurer protests the Department’s assessment of retail sales tax, retailing B&O tax, and service and other activities B&O tax. Taxpayer argues that the Department overstated its income by erroneously (1) using insurance premium reporting documents to estimate Taxpayer’s income, and (2) using an estimated percentage to calculate its income from certain sales. We deny the petition in part, grant it in part, and remand it for additional records.

Det. No. 18-0043, 38 WTD 165 (2019) 38WTD165.pdf

A LLC disputes an assessment of REET on a transfer of real property to one of its members. The company asserts that the transfer of such real property was a liquidating distribution under 26 U.S.C. § 731, where neither the member nor company recognized gain or loss, and such a transfer is exempt from REET under RCW 82.45.010(3)(q)(i). Petition granted.

Det. No. 18-0044, 38 WTD 170 (2019) 38WTD170.pdf

An OTP retailer disputes an estimated assessment of tobacco products tax on unlicensed purchases of OTP. With its petition for review, the retailer provided additional records that it claims to be purchase invoices for all of its unlicensed OTP purchases and asks the Department to recalculate tax due based upon these records. We remand this matter to the operating division to determine whether Taxpayer is entitled to an adjustment based on the records it provided with its petition.

Det. No. 18-0060, 38 WTD 175 (2019) 38WTD175.pdf

An out-of-state active duty U.S. Army officer and his spouse, husband and wife, who reside in Washington under military orders, petition for correction of an assessment of use tax on two private motor vehicles, issued by the Compliance Division of the Department. We deny Taxpayers’ petition.

Det. No. 18-0062, 38 WTD 181 (2019) 38WTD181.pdf

A broker/dealer that distributes exchange-traded funds and underwrites mutual funds protests the assessment of penalties on the grounds that it is was unaware of the requirement to file annual reconciliations and that it qualifies for waiver under the 24-month rule. We deny the petition.

Det. No. 18-0076, 38 WTD 185 (2019) 38WTD185.pdf

A container transporter protests the Department assessment of PUT under the motor transportation classification. Taxpayer argues that his container transporting qualifies for full deduction as interstate and foreign sales. We deny the petition.

Det. No. 18-0109, 38 WTD 189 (2019) 38WTD189.pdf

A provider of software and data hosting services, in conjunction with help desk and other IT support services, protested an assessment of retail sales tax on its receipts from these services. The taxpayer asserted that the transaction meets the definition of a “bundled transaction,” [and] should be taxed as a non-retail service under statutory exclusions in RCW 82.08.190(4). The Department concludes that the software and data hosting services are retail DAS under RCW 82.04.050(8)(a) and that the IT support services provided exclusively in connection with the software and data hosting DAS were included in the retail sale of DAS under RCW 82.04.050(8)(b). The Department denies the taxpayer’s petition.

Det. No. 18-0116, 38 WTD 197 (2019) 38WTD197.pdf

An online reservation service disputes the assessment of delinquent penalties on additional tax due. The business filed corrected tax returns for three tax periods to report and pay tax on previously unreported apportionable income. However, the business filed the corrected returns after October 31st of the year following the current year for each tax period. We grant the petition in part and deny it in part.

Det. No. 18-0017, 38 WTD 203 (2019) 38WTD203.pdf

A plat development company protests the inclusion of an evasion penalty for failure to timely remit collected retail sales tax, attributing the failure to lack of familiarity with the invoicing system. We sustain the inclusion of the evasion penalty as ongoing and consistent underreporting of collected retail sales tax and willful alteration of the electronic records is a sufficient basis to support the imposition of the evasion penalty.