B&O Tax

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On February 27, 2023, the Washington Court of Appeals held that a provider of pharmacy services and pharmacy benefits services (PBM) to its affiliate’s enrollees met the insurance business exemption to the Business and Occupation Tax because its activities were at least functionally related to insurance business. The taxpayer fulfilled the PBM services required by…

On April 25, the Washington Court of Appeals held that a company that arranges and manages displays for installation and placement in multiple retail brands’ stores through subcontractors was subject to the state’s retailing business and occupation tax (the “B&O tax”) and retail sales tax as a retailer making retail sales, rather than a provider…

On February 6, 2022, the Washington Department of Revenue’s Administrative Review and Hearings Division issued a determination concluding that a company providing a license to use data center space owes business and occupation (B&O) tax on the profits from the service. The taxpayer provides colocation services, which includes renting space in data center facilities for…

The Washington Administrative Review and Hearings Division (the Division) of the Department of Revenue held that payments between affiliated entities could not be deducted from “gross income” subject to the business and occupation tax (B&O Tax). Each of the taxpayers, three affiliated entities falling under the same parent company umbrella with each providing investment management…

The Washington Court of Appeals recently issued a divided (2-1) decision in a case involving Washington’s “benefits received” test for apportioning service income.  The Court ruled that the “benefit” of an airplane design firm’s services were received in Washington, where the taxpayer’s direct customer, Boeing, manufactured the airplanes incorporating the taxpayer’s airplane designs, rather than…

The Washington Court of Appeals held that a laboratory created by the University of Utah was not a government entity exempt from Washington taxation.

Affirming the lower court’s decision, the Washington Court of Appeals rejected Arup Laboratories, Inc.’s arguments that it should be excluded from paying B&O taxes because it is an “arm of the…

On January 13, 2020, the Washington Court of Appeals upheld the Washington Department of Revenue’s retailing characterization of taxpayer’s provision of online access to information in a digital research library. Therefore the taxpayer’s service was subject to Washington sales tax and the higher business and occupation (B&O) tax rate. Gartner, Inc. v. Washington Department of…