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On April 12, 2022, the Administrative Review and Hearings Division of the Washington Department of Revenue released decision number 41 WTD 118 (originally issued on June 4, 2020), concluding that a company providing online account access services to credit unions was providing taxable digital automated services (DAS) and not data processing services which is excluded…

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 Department of Revenue recently released informal guidance regarding the taxability of online instructional classes. The guidance states that live classes where participants can interact in real-time with the presenter are not subject to sales tax; however, pre-recorded videos and classes are subject to sales tax. This distinction focuses on the live ability to…

Addressing cross-motions for summary judgment from the Seattle Metropolitan Chamber of Commerce and the City of Seattle, the Superior Court of Washington for King County held that the City’s new payroll expense tax, which applies to businesses that spend $7 million or more on payroll in Seattle, is constitutionally permissible.

On July 6, 2020, the…

On May 7, 2021, the Washington Department of Revenue issued Excise Tax Advisory 3223.2021, providing guidance on the proper taxation of grocery food and restaurant delivery services provided through marketplace facilitators. Marketplace facilitators that are facilitating the retail sale of prepared food or groceries through its marketplace are responsible for collecting and remitting sales…