Washington Tax Decisions

An interpreter . . . service (Taxpayer) protests the denial of its requests for refund for taxes it claims it overpaid by not properly reducing its reported gross income by amounts it paid to individual interpreters for interpreter services. Taxpayer claims that such amounts were not part of its income because Taxpayer served as agent for the individual interpreters in collecting payment from the various organizations. We deny Taxpayer’s petition.

A construction company petitions for refund of use tax paid on its acquisition of six vehicles, asserting the transfer of such vehicles was a non-taxable transfer of capital assets between wholly-owned subsidiaries of the same corporation. Petition denied.

Retail services provider argues that (i) the Department’s assessment is barred by the statute of limitations; (ii) the installation of promotional displays inside retail stores is not a retail sale on the grounds that its customers are not “consumers”; [(iii)] the performance of architectural site surveys is a professional service not subject to retail sales tax; and (iv) travel expense reimbursements are not subject to retail sales tax. The petition is denied.

A building contractor protests retail sales tax assessed when it over-billed its Washington customers for sales tax by including its business and occupation (B&O) tax in the sales tax billed to its customers. [The] contractor must remit over-collected sales tax as retail sales tax (not B&O tax) to the Department of Revenue (Department). The contractor must also include permit fees for which it was financially liable in its measure of tax, even though the owner was liable to pay the contractor for the fees. We deny the taxpayer’s petition.

A firm providing both architectural design and construction services protests reclassification of design work from the service and other B&O classification to the retailing business B&O and retail sales tax classifications on projects where it also acted as contractor. Because there is evidence that the parties contemplated that the Taxpayer would provide both services, we affirm the classification of the design work as a retail service. The Taxpayer’s petition is denied.

A company protests B&O tax assessed on payments it received from affiliates for payroll. Because it had no liability other than as agent of the affiliates, we grant the petition subject to verification.

A political subdivision of the State of Washington (Taxpayer) protests a tax assessment, in which Taxpayer was assessed service and other B&O tax on “tip fees” collected from individuals that paid the fee to deposit their solid waste at a central transfer station owned and operated by a third party, but leased by Taxpayer. Taxpayer argues that its activity in relation to the central transfer station was an “exclusively governmental activity” and, therefore, exempt from B&O tax. We conclude that the activity at issue is an “enterprise activity” subject to B&O tax. Accordingly, we deny Taxpayer’s petition.

A seller of interactive web-based computer programs, that assists lenders in evaluating the credit risks of potential borrowers, objects to the assessment of retail sales taxes and penalties. We deny Taxpayer’s petition.

A taxpayer bank petitions for the correction of an assessment of service and other activities B&O taxes on “shared-loss” payments it received from the FDIC. The FDIC took over three failing banks and sold those banks to Taxpayer under an agreement where the FDIC would compensate Taxpayer when a certain threshold number of loans Taxpayer acquired from the failing banks went into default. Taxpayer argues that the shared-loss payments it received from the FDIC were not taxable in Washington. Taxpayer’s petition is denied.

A taxpayer appeals a delinquent payment penalty resulting from sending payment timely, but to another Washington Government Agency. We grant Taxpayer’s refund request.

Taxpayers’ petition for the correction of a REET assessment claiming that the change in ownership in LLCs, which resulted from the redemption of other members’ ownership interests, did not constitute a REET-taxable transaction. Taxpayer’s petition is denied.

Is an out-of-state lessee liable for use tax under RCW 82.32.730(10) when the leased property is primarily located outside of Washington?