Washington Tax Decisions

An out-of-state property management company (Taxpayer) protests the Department’s denial of a refund request in which Taxpayer claimed (1) it should have been allowed to exclude from its measure of business and occupation (B&O) tax amounts that it received from its customers to cover Taxpayer’s own payroll expenses, and (2) protests the classification of a portion of [its] income to retail sales. We deny Taxpayer’s petition

A heating and air conditioning company objects to the disallowance of “discounts” booked in the “Finance Company Buy Downs” and “Coupons and Discounts” accounts that reflected the short pay of customer invoices by customers’ retail financing companies. Taxpayer’s petition is denied.

[Taxpayers] appeal a real estate excise tax (REET) assessment, claiming they transferred their interest in the subject real property as a tax-exempt gift. The Department of Revenue (the Department) assessed REET based on the value of Taxpayers’ relief of debt following the transfer. We uphold the assessment.

Taxpayers protest the service and other activities business and occupation (“B&O”) tax assessed on amounts collected from franchisees for local and national advertising. We conclude that the amounts are received for providing advertising services, and are not excludable from tax under WAC 458-20-111 (“Rule 111”). Taxpayer’s petition is denied.

A towing company disputes the results of an audit on the basis that its records were not correct at the time of the audit and it is in the process of reconciling income to produce correct records. Petition denied

A recipient of [a tax deferral under] the rural county sales and use tax deferral program (“Rural County Deferral”) protests the Department of Revenue’s (“Department”) assessment of the amount of the tax deferral, claiming that it is not liable for the tax because the sale of the real property where the tax deferred activity took place [was] under threat of eminent domain, or that the governmental entity that threatened eminent domain and purchased the property is the recipient’s successor, and is liable for the deferral. We deny the petition.

A flagging services company (“Taxpayer”) protests the Department of Revenue’s (“Department”) reclassification of income from the public road construction and wholesaling business and occupation (“B&O”) tax classifications to the service & other activities B&O tax classification. We deny the petition.

Taxpayer, the controller of a defunct corporation, appeals a trust fund accountability assessment (TFAA). Because we find that the Taxpayer held himself out to be and was acting in the capacity of a chief financial officer at the time a portion of the trust fund liability accrued, the assessment is sustained with respect to the unpaid sales taxes that accrued while Taxpayer was acting as chief financial officer. Taxpayer is not liable for the unpaid sales taxes that accrued after his position was terminated. Taxpayer’s petition is granted in part and denied in part.