Washington Tax Decisions

A married couple appeals real estate excise tax (REET) assessed on their transfer of encumbered Washington real estate to their limited liability company (LLC). When the LLC assumed the mortgage, which was larger than the couple’s adjusted basis in the property, the gain was partially recognized for federal income tax purposes under I.R.C. § 731(a). REET applies to the amount of the transaction for which gain was recognized under WAC 458-61A-212 and RCW 82.45.010(3)(p)(i). Petition granted in part.

A retailer appeals an assessment for uncollected retail sales tax on purported sales to nonresidents, asserting that its documentation of the nonresident sales adequately met the requirements for tax-exempt nonresident sales authorized by RCW 82.08.0273. The taxpayer’s petition is denied.

A leasing company requests reconsideration of Determination No. 12-0380, which affirmed the retail sales tax assessed on certain sales Taxpayer made to an affiliate company. Taxpayer argues retail sales tax is not due on those sales because the affiliate company traded in like kind tangible personal property, the value of which reduced the selling price of the items Taxpayer sold, thus reducing the measure of the retail sales tax due. We deny the petition.

Taxpayer, a prime contractor, disputes the Department of Revenue’s (Department’s) disallowance of tax paid at source deductions it claimed during the audit period. We deny the petition.