WAC 229

Buyer to pay, seller to collect tax--Statement of tax--Exception--Penalties.

Excess payment of tax, penalty, or interest-Credit or refund-Payment of judgments for refund.

WAC 458-20-229

WAC 458-20-229

Refunds. Effective 3/4/93

Refunds of over collected retail sales tax Revised 2/2/09 See ETA 3106.2009

RETAIL SALES TAX REFUNDS This advisory explains that a seller is not entitled to a refund of improperly collected sales tax unless the seller has first refunded the tax to the customer, and that the customer must secure a refund of tax overpayment from the seller. Cancelled effective 6/30/04. Subject matter is discussed in rule WAC 229. Additionally, ETA 299 explanation that both the seller and the customer have two years to seek a refund of sales taxes is incorrect.

Refunds of over collected retail sales tax

Questions and Answers on Spirits Tax for Retailers

B&O Tax Credit for Washington Customized Training Program Extended

B&O Tax Credit for Washington Customized Training Program Extended

Claims of Constitutional Impairment of Contract made under Initiative 1183

Refunds of Retail Sales Tax Collected in Error Cancelled effective June 30, 2005 - See ETA 2025

B&O Tax Credit and Training Assistance for New and Expanding Businesses (Other Reference Rule 101 and Misc)

REFUNDS, CREDITS AND OFFSETS -- NONCLAIM PERIOD -- PROPER AMOUNT DUE -- ADDITIONAL TAXES DUE. In order to determine whether additional taxes are due under RCW 82.32.050, any amounts earlier overpaid but now barred by the nonclaim period are not considered in the determination of the proper amount due. Guy F. Atkinson & Co and Puget Sound Power & Light Co.distinguished.

REFUNDS, CREDITS AND OFFSETS -- NONCLAIM PERIOD. Under the current version of RCW 82.32.050 and 82.32.060, offsets or their economic equivalence are no longer permitted. Guy F. Atkinson & Co and Puget Sound Power & Light Co.distinguished.

NON -- CLAIM PERIOD -- TAX ASSESSMENT -- DETERMINING AMOUNT OF USE TAX PROPERLY DUE -- OVERPAYMENTS. In computing the amount of additional use tax "properly due" for a tax assessment, an auditor must take into consideration all use tax liability and all payments during the audit period, including double payments or payments made in error even though the period for claiming a refund for a particular payment of taxes under82.32.060 may have passed. Accord: Puget Sound Power & Light, Co v. State, 70 Wn. 2nd 493, (1967); Contra: Det.

REFUNDS -- ERRONEOUS WRITTEN ADVICE -- ESTOPPEL -- RELIANCE. The doctrine of estoppel will not lightly be invoked against the State to deprive it of the power to collect taxes.Three elements must be present to create an estoppel:(1) an admission, statement, or act inconsistent with the claim afterwards asserted, (2) action by the other party on the faith of such admission, statement, or act, and (3) injury to such other party resulting from allowing the first party to contradict or repudiate such admission, statement, or act.

REFUNDS -- ERRONEOUS WRITTEN ADVICE -- RELIANCE --The Taxpayer’s Rights and Responsibilities Act provides statutory remedies for written misinformation issued by the Department for taxpayers (1) who have been issued specific erroneous written advice/reporting instructions, and (2) who have relied on these instructions to their detriment.Further, taxpayer remedies consist only of the right to (1) the waiver of interest and penalties on an assessment, and (2) the waiver, “in certain instances,” of the tax assessment itself.There is no provision for the refund of taxes already paid which were

TIMELINESS OF REFUND REQUEST. When a taxpayer pays taxes assessed by the Department and subsequently requests a refund of taxes for the period covered by the tax assessment, the taxpayer will receive a refund of taxes overpaid during the audit period and beyond the normal four-year refund period to the extent that the tax assessment over-assessed the “amount properly due” and the refund request is made within the statutory period following the payment of the tax assessment.

RETAIL SALES TAX – COLLECTION OF EXCESSIVE TAX. Where excessive tax is collected, a credit for that Amount may not be issued absent verification that the excess amount was refunded to the purchaser.

RETAIL SALES TAX -- REFUND -- SELLER TO COLLECT TAX -- ETB 132. RCW 82.32.050 imposes a duty upon each seller to collect the retail sales tax from the buyer. Seller not entitled to a refund of sales tax that had been remitted to the Department because buyer was refusing to pay seller the tax that was due.

SALES TAX – REFUND OF -- STATUTE OF LIMITATIONS – EXTENSION OF -- LIMITATION. Where a taxpayer paid sales tax to vendors on supplies for which it could have claimed an exemption, the statute of limitations on its refund claim is, effectively, extended when the taxpayer pays a tax assessment covering an audit period in which the “overpayment” is actually made. The amount of any refund, however, is limited to the amount of the tax assessment.

B&O TAX – SALES TAX – USE TAX – REFUND -- PETITION – STATUE OF LIMITATIONS – EXTENSION. A petition for review requesting a refund of taxes paid must be filed within four years after the close of the tax year in which the taxes were paid. The Department may not grant an extension of time to file a petition for review requesting a refund of taxes paid.

RCW 82.32.060: SALES/USE TAX – REFUND REQUEST – ESTOPPEL. A corporation (A) is estopped from seeking a refund of sales and use taxes paid on machinery and equipment after it wrote a letter presented by another corporation (B) in a similar refund request to the Department of Revenue disclaiming any interest in the machinery and equipment.

TAXES PAID LESS THAN OR IN EXCESS OF THOSE PROPERLY DUE -- ASSESSMENT -- REFUND -- Taxes properly due prior to an audit period, but not paid until the audit period, are not attributable to that audit period for the purpose of computing "excess" taxes above those properly due during the audit period for purposes of RCW 82.04.050 and -.060.

REFUNDS -- B&O TAX -- RETAIL SALES TAXES. When a taxpayer erroneously over-reports and remits both the retailing B&O and retail sales tax, and then discovers an exemption or deduction applied, the taxpayer may ask for a refund of its overpaid B&O taxes without repaying the collected retail sales tax to its customers and also asking for a refund of the overpaid retail sales tax.

RETAIL SALES TAX – EXTENTION OF NON-CLAIM PERIOD – EXECUTED WAIVER. A Taxpayer’s petition for refund of overpaid taxes was filed timely where the taxpayer filed its refund request within the extended deadlines of written waivers executed pursuant to RCW 82.32.050.

PETITIONS FOR REFUNDS -- ESTOPPEL -- CONDITIONAL REFUNDS. Under Rule 229, when refund requests are initiated by a petition of a taxpayer, the Taxpayer Account Administration Division grants a refund on a conditional basis and subject to future field audit verification. When the Audit Division later examines taxpayer's records to verify the refund, it is not estopped from re-assessing taxes properly due if it determines the refunded amount was improper.

REFUNDS -- INITIATED BY A TAXPAYER -- CONDITIONALLY GRANTED SUBJECT TO VERIFICATION -- ESTOPPEL. When a refund request is initiated by a taxpayer’s petition, Rule 229 allows DOR to conditionally grant a refund subject to future field audit verification. Absent evidence that the conditional refund request was actually verified by field audit, the DOR is not estopped from assessing additional taxes owed within the time limits allowed by RCW 82.32.050.

RCW 82.32.060:TAX REFUNDS – NONCLAIM PERIOD. A taxpayer cannot obtain a refund for tax paid more than four years prior to the year in which the claim for refund is made, unless the taxpayer has executed a written waiver consistent with the terms of RCW 82.32.060(2), or unless the taxpayer seeks a refund of excess tax paid on a deficiency assessment for a period prior to the statutory four-year refund period and the taxpayer files a refund claim within four years of paying the deficiency assessment.

RCW 82.32.060; Rule 229: REFUNDS -- ASSIGNMENTS. A written release from the taxpayer (the purchaser) affirming that any state tax refund belongs to the Contractor (the seller) acts as an assignment of any refund, and thereby the Contractor has satisfied the “refund to taxpayer” requirement of Rule 229(3)(b)(ii).

Rule 229; RCW 82.32.060: OTHER TOBACCO PRODUCTS TAX – REFUND CLAIM – NONCLAIM STATUTE – SUBSTANTIATION REQUIREMENT. Taxpayer failed to provide the Department of Revenue with invoices supporting the amount of its refund claim. As a result, the Department of Revenue correctly denied taxpayer’s refund request due to its failure to substantiate its claim within the time limits set forth in Rule 229.

RULE 229; RCW 82.32.170: REFUNDS - APPLICATION – FILED BY REPRESENTATIVE - AUTHORIZED SIGNATURE - CTIA. If a tax refund application is filed by a taxpayer representative, Rule 229 requires that the representative’s authority to file a refund claim on behalf of the taxpayer must be perfected by filing a Confidential Taxpayer Information Authorization form (CTIA).

RULE 229; RCW 82.32.170: REFUNDS – APPLICATION – REASONS FOR REFUND CLAIM – ADDITIONAL REASONS – UNTIMELY. Where a taxpayer added two different reasons for claiming a refund five months after its original refund application was filed, the additional two reasons were not made within the nonclaim period and therefore ruled untimely.

RULE 229; RCW 82.32.170: REFUNDS – APPLICATION – APPEAL OF – DUE DATE FOR SUBSTANTIATING DOCUMENTS – EXTENSION. Where a taxpayer appealed the denial of its original refund application and was sustained upon appeal, the delay caused by the appeal process was held to be for “good cause” and the taxpayer was allowed an extension for submitting substantiating documents.

RETAIL SALES TAX -- CREDIT -- REFUND -- NONCLAIM PERIOD -- PAYMENT OF ASSESSMENT WITHIN FOUR YEARS. The language of RCW 82.32.060 does not mandate a netting of all individual excise taxes coming under the purview of Title 82 RCW before determining the amount of any overpayment which may have been made within nonclaim period. The use of the article "a" modifying "'tax" mandates that taxes which have been "overpaid" be calculated on a "tax by tax" basis, without regard to any erroneous overpayments of other individual taxes.

RULE 229; RCW 82.32.170: REFUNDS – SUBSTANTIATION REQUIREMENT. Rule 229(3)(b)(vii) states that if the Department does not receive the necessary substantiation within the applicable time period, the Department “shall” deny the claim for lack of adequate substantiation. Here, TAA properly denied Taxpayer’s refund claim for lack of substantiation.

RCW 82.32.060(1) – PERIOD OF LIMITATIONS – PAYMENT – NET CREDIT: A net credit adjustment, resulting from a multi-year audit - with debit and credit adjustments, is not a payment of taxes, penalties, or interest, by a taxpayer, for purposes of the nonclaim period in RCW 82.32.060(1).

RCW 82.32.060; WAC 458-20-229(3)(b) – REFUND REQUEST - SUBSTANTIATION: Where a taxpayer made a refund request, the Department determined it was lacking adequate substantiation to process the refund request and provided a taxpayer with written request and 90 days to produce such substantiation, and the taxpayer failed to provide the substantiation necessary to support the refund request, the Department shall deny the refund request for lack of adequate substantiation.

SALES TAX -- REFUND -- SELLER'S STATUS. A seller receives a sales tax refund as a trustee of the buyer and may not benefit it from it. RCW 82.08.050.

EXCISE TAX -- INTEREST RATE -- DIFFERENCE BETWEEN UNDERPAYMENT AND REFUND -- VALIDITY. The fact that the interest rate on an excise tax delinquency under RCW 82.32.050 is greater than the interest rate paid on an excise tax refund under RCW 82.32.060 does not violate a taxpayer's equal protection rights.

B & O REFUNDS - SELF HELP - PENALTY -EVASION. There is no statutory authority for self help refunds. Where a taxpayer willfully withholds any properly due excise taxes (such as B&O taxes or collected retail sales taxes) under an unverified claim that the taxpayer is entitled to a refund, without first having followed the Legislature's prescribed procedure for refunds, then the evasion penalty shall apply. F.I.D.

REFUND -- NON-CLAIM PERIOD. The Department of Revenue does not have authority to grant a credit or refund of taxes paid in error unless the request is made within the statutory time period. Guy F. Atkinson Co. v. State, cited.

REFUNDS, CREDITS AND OFFSETS -- NONCLAIM PERIOD -- STATUTE OF LIMITATIONS WAIVER AGREEMENT. Refund claim made in 1989 for taxes paid in 1983 is barred by RCW 82.32.060. No exception made because taxpayer had executed a Statute of Limitations Waiver Agreement for 1983.

REFUNDS -- CREDITS -- NONCLAIM PERIOD -- "EXAMINATION OF RECORDS" CONSTRUED. An "examination of records," as used in RCW 82.32.060 pertains solely to the audit function, and is complete when an assessment is issued.

REFUNDS -- CREDITS -- FOUR YEAR LIMITATION -- SALES TAXES PAID BEYOND FOUR YEAR LIMITATION. No refund or credit may be made for taxes paid more than four years prior to the beginning of the calendar year in which the refund or credit is sought, or examination of records by the Department is completed. Where Department assessed an unregistered taxpayer beyond the four year limitation, any overpayment or incorrect payment of taxes beyond the four year limitation is not allowed as a credit to offset taxes assessed.