Washington Tax Decisions

Beverage manufacturer petitions for refund of sales tax on its rental of pallets, on the grounds that they were purchased for resale as packing materials under WAC 458-20-115. The petition is denied.

[A husband and wife are the former members of a now defunct LLC. The wife protests a TFAA against her and the marital community of her and her husband, contending that she was not involved in the day-to-day affairs of the business, was not responsible during the disputed period for collecting and remitting retail sales taxes, and that she did not willfully fail to pay those taxes.] We conclude that the former member was not personally liable for the TFAA because she did not have control or supervision of the collected funds or the responsibility of filing returns or paying the taxes to the Department during the period at issue, but that her husband and the marital community are liable. We grant the petition in part and deny it in part.

A married couple domiciled [out-of-state] seeks a refund of use tax paid on a vehicle purchased and registered [out-of-state], and subsequently brought into Washington during weekend excursions to a vacation home. The petition is granted.

Timberland owner disputes an assessment of FET, contending that he did not harvest as much timber as the estimated assessment reflects. Because the owner failed to provide suitable records to substantiate the amount of tax due, we deny the petition.

[Taxpayer] appeals the assessment of manufacturing B&O tax and retail sales tax on sales of yacht design and engineering services. Taxpayer contends the sales income was properly reported under the service and other activities B&O classification. We conclude that the income at issue is properly included in the gross proceeds of sales and selling price and is subject to manufacturing B&O tax and retail sales tax. Taxpayer’s petition is denied.

A sole proprietor of an auto body shop protests the assessment of successorship liability. We find the taxpayer is not a successor and conclude that he is not liable for the tax in the outstanding warrants filed against the defunct business. Taxpayer’s petition is granted.

A company operating a restaurant protests an assessment estimating unreported cash sales, asserting that the records provided were sufficient and all sales were reported. We affirm the assessment because the Audit Division has established that business records were insufficient and reasonably exercised its authority to arrive at an estimate of cash sales. We deny the Taxpayer’s petition.

Taxpayer requests refund of the extension interest and late-payment penalty paid on a tax assessment that was paid late. Taxpayer maintains that the assessment would have been paid timely and no extension interest or late-payment would have been assessed had the audit report and assessment been sent by United States Postal Service (“USPS”) rather than transmitted over the internet to his secure Department of Revenue [(Department)] account. Taxpayer’s petition for refund is denied.