Washington Tax Decisions

The owner of a car dealership (Taxpayer) challenges a tax assessment for additional tax liability due to Taxpayer’s failure to accurately report its income and remit retail sales tax. Taxpayer argued that it is unable to provide records to support an adjustment to the tax assessment because his bookkeeper has refused to allow him access to his own records. We deny Taxpayer’s petition.

Taxpayer petitions the Department for refund of assessed taxes Taxpayer paid as a result of an audit. Specifically, Taxpayer protests the disallowance of bad debt deductions taken against the retailing business and occupation (B&O) tax and retail sales tax paid. Taxpayer also protests use tax assessed on certain business purchases. We deny Taxpayer’s petition.

A transferor of a real property interest appeals a Real Estate Excise Tax (REET) assessment claiming that the transfer is not subject to REET because she transferred her interest in the property as a gift. The Department of Revenue (Department) assessed REET on the transferor’s relief of debt following the transfer. The taxpayer’s petition is denied.

A Washington corporation that owns and operates a cafeteria (“Taxpayer”) protests an estimated assessment for retail sales tax and retailing business and occupation (B&O) tax. Taxpayer also contends that the Department of Revenue (the “Department”) should not include the retail sales tax it has already remitted in the measure of its tax liability. We affirm the assessment because Taxpayer did not maintain records of its cash sales during the audit period, and because it did not separately state the retail sales tax on its sales receipts to its customers. We deny the petition.

An out-of-state company engaged in the business of designing and manufacturing custom heating systems protests the assessment of tax on sales of equipment to Washington customers, and contends that it lacks nexus with Washington. We conclude that the Taxpayer’s activities within Washington establish nexus.

A clinic for treatment of asthma and allergies requests a refund of business and occupation (“B&O”) tax paid on receipts it received from patients on behalf of its owner, a doctor working for Taxpayer as an independent contractor. Taxpayer argues it is entitled to an exclusion from gross income because the payments qualify as advances under WAC 458-20-111. We affirm the refund denial because Taxpayer provided services to patients through an independent contractor, and because Taxpayer was not liable for payment to the doctor solely as an agent of the patients. Taxpayer’s petition for refund is denied.