Washington

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On May 20, 2025, the last day for bill signing, Washington Governor Ferguson signed two key tax bills that expand the sales tax to include additional services and increase the rates of the (awful) business and occupation (B&O) tax. Some of these increases are targeted at certain industries and will incite litigation. A projected budget…

A content delivery network (CDN) services provider appealed the Department’s assessment of retail sales tax in which the Department determined that the taxpayer’s CDN services were “digital automated services” subject to the retailing B&O tax and retail sales tax. The taxpayer disagreed, noting that its CDN is a “backbone” component of the internet that its…

The Washington Department of Revenue issued proposed guidance limiting the application of the multiple points of use (MPU) sales tax exemption for bundled software maintenance agreements.

The MPU exemption provides a retail sales tax exemption for the purchase of digital goods, prewritten computer software, remotely accessed prewritten computer software, digital automated services, and digital codes…

On November 5, voters cast their ballots to determine who would fill a variety of federal, state, and local offices. Several states also considered tax related ballot initiatives. We describe some of the more significant ballot initiatives and their results.

Sales Tax

There were a few states with ballot initiatives that would exempt items from…

The Washington Court of Appeals recently upheld the dismissal of a putative class action brought against four grocery store chains that collected sales tax on sales of 100 percent juice beverages. A taxpayer alleged that the grocers violated Washington’s Retail Sales Tax Act and Consumer Protection Act by wrongfully collecting sales tax on the exempt…

The Washington Court of Appeals held that the sales of pre-paid telephone airtime purchased from third-party cellular networks by a business (Taxpayer) and resold to individual customers and retailers were subject to the City of Renton’s municipal utility tax.

The utility tax was imposed on the privilege of conducting a “telephone business” within city limits…

The Washington Court of Appeals upheld the constitutionality of a county document recording surcharge that financed affordable housing, eviction prevention, and housing stability services. A trade association of homebuilders challenged the surcharge as a property tax that violates the uniformity requirement of the Washington Constitution. The court held that the surcharge was a tax because…

The Washington Court of Appeals affirmed a Board of Tax Appeals decision that found an out-of-state bank had a sufficient physical presence in the state to be subject to Washington’s Business & Occupation (B&O) tax. The bank did not have any employees or property in Washington, but issued credit cards, including private label credits cards…

On March 23, 2023, the Washington Department of Revenue issued an emergency rule-making order. The purpose of the emergency rule was to make the public aware that certain of the Department’s administrative rules concerning remote sellers’ sales and use tax nexus and minimum nexus thresholds for the state’s business and occupation tax may be outdated.

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…