Washington Tax Decisions

A fresh fruit packer petitions for refund of use tax paid on its rental of pooled pallets, on the grounds that the pooled pallets were purchased for resale and are exempt from use tax as packing materials. We deny the petition.

An out-of-state computer software corporation petitions for correction of an assessment, claiming that the sponsorship revenue it received for holding software conferences outside of Washington is not taxable in Washington. The company also seeks a credit for collected and unremitted sales taxes that it claims it refunded to its customers and a waiver of the 5% assessment penalty. Taxpayer’s petition is granted with respect to the convention sponsorship revenue, but denied on all other issues. The matter is remanded to the Audit Division for adjustments consistent with this determination.

Taxpayer appeals the assessment of service and other activities B&O tax on income derived from the rental of indoor space in a building where a swap meet is held. We conclude that the income is derived from granting a B&O taxable license to use realty and not a B&O exempt rental of real estate. While we sustain the future reporting instructions on a prospective basis, we grant Taxpayer’s request for cancellation of the assessment based on erroneous previous written reporting instructions contained in a prior audit report.

A manufacturer protests the Department’s denial of Taxpayer’s request for refund, in which Taxpayer claimed that it overpaid BNG use tax. Taxpayer argued that it should not have included (1) certain service fees or (2) the value of “lost and unaccounted-for” natural gas in the measure for determining the amount of BNG tax owed. We deny Taxpayer’s petition.

A singles club that offers organized activities for its customers seeks reconsideration of Determination No. 14-0330, which affirmed the disallowance of a claimed deduction of [initiation] fees and dues from [its] measure of B&O tax. We deny Taxpayer’s request for reconsideration.

A business that organizes and hosts [vehicle] races protests the reclassification of rider participation/entry fee and comingled general admission/camping fees from the service and other B&O classification to the retailing business B&O and retail sales tax classifications. We affirm the assessment as issued. [U]nder RCW 82.04.050, WAC 458-20-183 [and ETA 3167.2011], the rider participation/entry fee allows for the participation in the sporting activity of [vehicle] racing and . . . is taxable as a retail activity. [Also,] the mingling of the service taxable general admission fees with the retail camping fees subjects the charge to the retail classification. The Taxpayer’s petition is denied.

An industrial engineering company protests the assessment of [deferred sales] tax on construction. . . . Taxpayer claims it should receive a credit for retail sales tax it previously paid to subcontractors for some of those materials and costs on behalf of the prime contractor. We remand Taxpayer’s petition.

A Washington corporation in the construction business protests an assessment of retail sales tax and retailing B&O tax, asserting that the Department erroneously classified Taxpayer as a prime contractor rather than as a speculative builder. Taxpayer’s petition is denied.

A road construction subcontractor appeals the assessment of use/deferred sales tax on materials purchased for public road construction and seeks waiver of the reseller permit misuse penalty. We deny the petition.