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In this installment of “A Pinch of SALT,” published by Tax Notes State, Partner Charlie Kearns examines Washington’s newly enacted “millionaire’s tax,” which takes effect in 2028 with returns due in 2029. The law imposes a 9.9% tax on Washington taxable income above $1 million, and introduces rules around residency, sourcing of income, and…

In Det. No. 23-0004, 45 WTD 013 (2026), the Washington Department of Revenue (DOR) concluded that professional implementation services and associated travel reimbursements are subject to retail sales tax when provided exclusively in connection with a Digital Automated Service (DAS).

The taxpayer was a software provider that offered cloud-based solutions to state and local…

The Washington Court of Appeals held that a company’s title insurance and escrow services provided remotely should be sourced to Washington because the company’s customers made “first use” of the services in Washington. The trial court held that the services were sourced out-of-state to the remote location where the title company performed its services under…

The Washington Court of Appeals held that, for purposes of the Business and Occupation (B&O) Tax, a law firm’s gross income from insurance litigation services were properly sourced to the state where litigation occurred. A law firm with offices in Washington and Oregon that provides insurance defense litigation sought a refund of B&O Tax on…

The Washington Court of Appeals held that a Washington-based consulting firm was not entitled to a refund of Washington Business and Occupation (B&O) Tax because the taxpayer failed to show that the benefit of services provided to its client were received outside of Washington.

The taxpayer provided technology information services to a number of software…

In Guild Mortgage Company v. Washington Department of Revenue, the Washington Board of Tax Appeals considered whether certain fees associated with mortgage sales – guaranty fees, loan-level price adjustments (LLPAs), and lender credits – should be included in the taxpayer’s gross income for purposes of the state’s business and occupation (B&O) tax. 

The taxpayer…

The Washington Board of Tax Appeals upheld the Department’s determination that certain fees and credits related to mortgage sales to government-sponsored enterprises are included in the lender’s gross income for B&O tax purposes. Specifically, the Board concluded that guaranty fees and loan-level price adjustment fees are part of the lender’s cost of doing business and…

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…