Washington Tax Decisions

A taxpayer appeals a letter ruling wherein the Department instructed the taxpayer that its sales constitute sales of prewritten computer software subject to Retailing B&O tax and retail sales tax. As set forth below, we conclude that the correct taxation classification of a particular sale is dependent on the elements of the transaction and how those elements are billed to the customer. The letter ruling issued to Taxpayer is modified accordingly.

Taxpayer objects to Department’s assessment of retail sales tax on the full contract price of a home it built for its corporate president and his wife, and further asserts that the assessment did not take into consideration all amounts of retail sales taxes that it paid to it its vendors and subcontractors. The assessment is upheld.

The chairman of a defunct nonprofit corporation petitions for cancellation of his TFAA, challenging the accuracy of the underlying corporate assessment that was never appealed. The petition is denied.

A company that claimed a B&O tax credit, but failed to timely submit the required annual tax incentive survey, appeals the denial of its request for an extension to file the survey on the basis that notification of the survey was mailed to the incorrect office and not timely routed to [the] person responsible for filing the survey and the company’s record of timely filing and paying excise taxes. Petition denied.

A Washington manufacturer, retailer, and wholesaler of pet supplies objects to the assessment of retailing B&O tax and retail sales taxes on its sales to out of state consumers and to other pet supply stores and retailers. We uphold the assessment.

A syrup manufacturer protests a syrup tax assessment alleging that it is not required to collect the syrup tax for sales to the federal government . . . in Washington. Taxpayer also contests the wholesaling B&O tax assessment arguing that it should be allowed to deduct from its gross income as volume discounts certain payments to its customers. We deny . . . the petition.

Taxpayer, the sole corporate officer of a defunct corporation, appeals a TFAA. Because we find that Taxpayer was the chief executive and chief financial officer during the time the trust fund liability accrued, the TFAA is sustained and Taxpayer’s petition is denied.

[Taxpayer] protests an assessment of deferred sales tax on charges for a water line reconstruction and for a paved section in a parking lot, claiming that the purchases qualify for the public road construction retail sales tax exception under RCW 82.04.050(10). In addition, Taxpayer claims that the Department is estopped from assessing the tax because the Department issued it a certificate stating that all taxes are paid in full. We grant the petition in part and deny in part.

The taxpayer objects to the assessment of Retailing B&O tax and retail sales tax for delivery charges it paid to third-party shippers and later billed back to buyers of its equipment. We determine that Taxpayer does not show it had no liability, either primarily or secondarily, for the delivery charges. Taxpayer’s petition is denied

[Taxpayer] appeals the assessment of service and other activities B&O tax on payments received for allowing a related entity to use real property and improvements located at [the Port]. The Department issued the assessment based on its opinion that the related entity’s use of the property and improvements constituted a taxable license to use real estate. Taxpayer contends the use constituted the tax-exempt rental of real estate . . . . We deny Taxpayer’s petition . . . .

[A technical] publication services company protests B&O tax on the grounds that none of its income should be attributed to Washington under RCW 82.04.462. The petition is denied.

Taxpayer derives income from the sale of garden supplies. Taxpayer protests the retailing B&O and retail sales tax assessed on Washington sales based on a claimed lack of nexus. Taxpayer also protests a late-payment penalty assessed on the late payment of two assessments based on a delay in receiving the assessments. Taxpayer’s petition is denied.