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The Washington Court of Appeals upheld the Washington Department of Revenue’s denial of a sales tax exclusion for trade-ins of software and hardware. GameStop provides customers with a trade-in credit for software and hardware and allows customers to apply these credits towards future purchases of software and hardware. The Department denied GameStop’s exclusion for two…

On March 26, 2019, the Washington Court of Appeals held that a pharmacy benefit management company’s payments from clients (e.g., health maintenance organizations, health insurers, etc.) for the value of prescription drugs, were subject to the Washington B&O tax. The taxpayer manages the clients’ prescription drug benefit programs and performs activities, including contracting with third-party…

The Washington Department of Revenue Appeals Division ruled that for B&O apportionment purposes under the “services and other activities” tax classification, an out-of-state automated teller machine (ATM) card transaction processor’s receipts are properly sourced to the location of its financial institution customers’ ATM transaction activities. The Appeals Division found that location to be the location…

This is the eleventh edition of the Eversheds Sutherland SALT Scoreboard, and the third edition of 2018. Each quarter, we tally the results of what we deem to be significant taxpayer wins and losses and analyze those results. This edition of the SALT Scoreboard includes a discussion of California combined reporting, insights regarding the Washington…

The Washington Court of Appeals upheld the denial of sales tax and B&O tax refund claims filed by Lowe’s Home Centers, LLC based on the bad debt deduction.  Lowe’s, a home improvement retail store with locations in Washington, entered into private label credit card (“PLCC”) agreements with two issuing banks.  Among the typical terms of…

By Chelsea Marmor and Jonathan Feldman

The Washington Administrative Review and Hearings Division of the Department of Revenue found that an out-of-state diamond and gold wholesaler was subject to the business and occupation (B&O) tax based on in-state consigned property. The wholesaler consigned jewels to Washington jewelry retailers for five days at a time, during …

By Maria Todorova and Suzanne Palms

The Washington Court of Appeals recently held that Seattle could not impose a utility tax on revenue derived from international roaming charges (charges for mobile telephone communications that originate in a foreign country). City of Seattle v. T-Mobile West Corp., No. 75423-8-1 (Wash. Ct. App. May 22, 2017)…

By Jeff Friedman and Stephanie Do

A new landmark sales tax statute has been adopted in Minnesota, which expands sales tax collection requirements to those retailers that sell their goods on certain “marketplaces.” Generally, only a retailer that is physically present in a state is required to collect and remit the state’s sales tax. The …

By Chelsea Marmor and Open Weaver Banks

The Administrative Review and Hearings Division at the Washington Department of Revenue (the Division) determined that administrative activities qualify as business activities for purposes of applying Washington’s throw-out rule under the Washington business and occupation (B&O) tax. The taxpayer, a single member LLC, performed airplane certifications on aircraft …