In Determination 18-0255, the Washington Department of Revenue determined that a marketplace seller established substantial nexus in Washington for business and occupation tax purposes by participating in the marketplace facilitator’s “digital reassignment” process. This process allows the facilitator to ship to the marketplace seller’s customers a competitor’s equivalent product if the marketplace seller’s product
Battling Statutory Interpretation Principles Leads to an “Unambiguous” Result: Washington Taxes Hospitals
The Washington Supreme Court held that a business & occupation (“B&O”) tax deduction contained in RCW 82.04.4311 is limited to payments received from Washington and federal programs, but not payments received from other states’ medical programs. The B&O tax is a gross receipts tax imposed on nearly every type of enterprise, including for-profit and not-for-profit
Prohibited contacts: Washington Company’s Audit Disqualifies its Affiliates from Voluntary Disclosure Program
The Washington Department of Revenue’s Administrative Revenue and Hearings Division ruled that a company’s audit disqualifies its affiliates from participating in the state’s voluntary disclosure (VDA) program. One of the criteria for participating in the program requires that a business must have never been contacted by the Department for enforcement purposes including audits. The Division
Washington Warns Taxpayers Not to Rely on Current Remote Seller Regulations
Washington has required remote sellers meeting the $100,000 annual revenue of 200 annual transaction threshold to collect and remit sales tax since October 1, 2018. The requirement was first introduced by regulation and later confirmed and clarified by statute. In a May 22 emergency regulation, the Washington Department of Revenue warned taxpayers not to
If a Tree Falls in a Forest: Washington Court of Appeals Explains How Referral Services Are Sourced for B&O Tax Purposes
The Washington Court of Appeals held that taxpayer’s receipts for referral services are sourced to Washington for B&O tax purposes to the extent that such receipts are received from a lender located in Washington. The taxpayer operates an online platform through which the taxpayer offers educational tools on the loan process to prospective borrowers, analyzes
Podcast: Washington B&O and California LLC Tax Developments
This podcast discusses a recent Washington B&O decision and a recent California OTA decision concerning:
- The WA B&O taxation of services conducted out of state for in state customers
- The application of the CA LLC tax to a business that ceased activity in the state
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Representative Representation Required
The Washington Court of Appeals held that Seattle’s method of apportioning the City’s business and occupation tax (B&O tax) was unconstitutionally applied and unfairly apportioned when the City excluded compensation paid to independent representatives from the apportionment payroll factor. The taxpayer, a financial services firm headquartered in Seattle, generated most of its income through the
Failed Test – State of Washington Holds University of Utah Lab Not Exempt from Taxation
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
Washington Court of Appeals Rules Online Research Taxable as Retailing
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
Paymaster of None: Washington Denies Taxpayer of B&O Deduction for Paymaster Services
The Washington Department of Revenue determined that a taxpayer did not qualify for the B&O tax deduction for payments made to an affiliate for the provision of “paymaster services” under R.C.W. § 82.04.43393. The paymaster services deduction did not apply to the taxpayer, which provided payroll services to affiliate restaurant employers, because the taxpayer had