Washington Tax Decisions

An out-of-state mortgage brokerage protests the Department’s assessment of penalties imposed. The mortgage brokerage argues that the Department should waive the penalties assessed claiming the Department and an outside CPA told the brokerage that it did not have nexus with Washington. We deny the petition.

A software services provider protests the Department’s tax ruling dated September 21, 2022. The software provider argues that the Department’s TI&E section erroneously concluded that its time and materials transactions, as well as its time and expense transactions, were subject to retail sales tax. We deny the petition.

Taxpayer petitions for a refund of retail sales tax paid on the purchase of a boat without a motor which was subsequently equipped with an electric motor. Taxpayer makes two arguments. First, the boat was not completed until an electric motor was installed as they did not use it prior to that point. Second, a boat matching the law’s requirements and Taxpayer’s needs did not exist. . . . We deny Taxpayer’s petition.

Taxpayer, a single-member LLC, petitions for review of REET imposed on the transfer of real property. A settlement decree ordered a wife to quitclaim her interest in the real property to her husband after he satisfied unrelated debts to her. Before he satisfied the debts, she transferred her interest to Taxpayer for personal tort liability protections. After he satisfied the debts, Taxpayer quitclaimed its interest to her husband. While this did not follow the exact terms of the settlement decree, we find it mere clearing of title as no additional or new consideration passed between the parties. We grant the petition.

A funeral home petitions for review of the Department’s denying deductions from gross income for payments it made to a third party. While the law allows specific deductions for funeral homes’ payments to third parties, it does not allow such deductions for payments to affiliated entities. We deny Taxpayer’s petition.

An individual airplane owner protests the Department’s assessment of penalties imposed as part of a use tax assessment. The owner argues that the Department should consider his efforts to pay the use tax sufficient to qualify for a waiver of penalties. We deny the petition.

A provider of dental insurance products protests the Department assessment of service and other activities B&O tax on dental insurance premiums, arguing that the premiums are exempt from B&O tax. Taxpayer argues that the Department has impermissibly taxed Taxpayer twice. Taxpayer also requests waiver of interest and penalties based on its reliance of general guidance provided by the OIC. We deny Taxpayer’s petition.

A hotelier disputes the denial of a retail sales tax deduction for sales to the federal government based on failure to follow the 2012 Special Notice. Taxpayer maintained insufficient records to grant the deduction. We deny the petition.

A corporation that provides farm management and contract labor services to farmers protests the disallowed B&O tax exemption for custom farming services taken between January 1, 2021, and June 30, 2022. The taxpayer argues the Department should retroactively apply the statute to the period that is not covered by the exemption because the agricultural industry is one of the largest employers in Washington[,] and the farm labor services B&O tax exemption is vital to the agriculture industry including the taxpayer. We deny the petition.