Washington Tax Decisions

An out-of-state limited liability company engaged in selling prescriptions by mail order to an affiliate’s health and pharmacy benefit plan subscribers, requests executive reconsideration of Det. No. 08-0158, which sustained an assessment of retailing B&O tax on mail order pharmacy sales delivered to subscribers in this state. In dispute is whether the actions of the taxpayer’s affiliate in this state establish nexus for the taxpayer. We conclude the taxpayer’s affiliate performs activities on behalf of the taxpayer that are significantly associated with the taxpayer’s ability to establish and maintain a market in this state for the sales, and therefore, establish nexus for the taxpayer in this state. We sustain the assessment.