Washington Tax Decisions

Taxpayer, a provider of digital automated services, requests a refund of retail sales tax paid on the purchase of servers used to provide its customers computer-related services. We conclude Taxpayer does not resell the actual servers in its provision of retail services. Finding Taxpayer does not resell the servers, we deny Taxpayer’s refund request.

A museum protests the Department’s disallowance of a refund of retail sales tax. The museum argues that certain purchases should be exempt from sales tax as artistic and cultural objects. The museum also argues that a portion of its costs should be considered public road construction. We grant the petition in part and deny it in part.

A Washington hunting guide protests the Department’s assessment of retail sales tax and penalties on the grounds that hunting guide services were not subject to retail sales tax until January 1, 2016, and, regardless, the guide was unaware that it was required to collect sales tax. We find that hunting guide services were indeed subject to retail sales tax throughout the audit period and the guide’s lack of knowledge regarding its tax liability is not a valid basis for a penalty waiver. Petition denied.

A company that provides piloting and flight training services protests assessment of use tax on its aircraft, arguing that the aircraft was used solely for leasing in the regular course of business and that there was no intervening personal use of the aircraft. The petition is denied.

A utility company in the business of generating and selling electrical power protests the classification of certain revenue streams. The company argues money received for licensing space on its utility poles is not subject to tax. . . . The petition is granted in part and denied in part.

A former owner of real estate protests the Department’s assessment of REET. The former owner argues the Department did not properly value the long-term leaseback of the property, and therefore over-assessed REET. We deny the petition.

Two individuals protest the Department’s assessment of REET on their transfer of real property to a limited liability company. The individuals argue that the transfer was exempt from REET as a mere change in identity or form. Alternatively, the individuals argue that the transfer was exempt from REET as the clearing of title. We deny the petition.

A for-profit [human tissue] bank petitions for review of the Department’s adjustment of Taxpayer’s monthly excise tax returns, which reclassified certain income from . . . tissue related services from the Retailing B&O Tax Classification and subject to retail sales tax to the Service and Other Activities B&O Tax Classification and denied deductions to retail sales tax for sales of prosthetic devices. Taxpayer’s petition is denied.

An [Out-of-State] development company protests the Department’s assessment of retail sales tax and B&O tax on the grounds that the Department failed to provide the company with timely notice that the Department had issued the assessment, thus rendering the assessment invalid. The company also argues that, even if the assessment is valid, the associated delinquency penalty was improperly assessed because the company filed and paid its monthly tax returns on time. Because the Department’s secure messaging system shows that the Department timely transmitted the assessment to the company, we find that the Department complied with its statutory duty to provide notice and the assessment is valid. We also find that the delinquent penalty was properly assessed. Taxpayer’s petition is denied.

A non-profit research and development organization protests assessments of use/deferred sales tax on purchases made under its High Technology Sales and Use Tax Certificate on grounds that the assessments are outside the four-year statutory time period. We deny the petition.