Washington Tax Decisions

Owner of a firearms store and gun range petitions for correction of an assessment of retail sales tax on replica silver bullets, contending they are exempt sales of precious metal bullion. Petition is granted.

Owner of several sandwich franchise locations, which sell bagged chips both individually and as part of single price meal options with other prepared foods, challenges an assessment of retail sales tax on the sale of bagged chips. We deny the petition.

A building foundation repair contractor argues that it is not a successor, claiming it acquired less than 50 percent of the predecessor’s intangible assets. We find the contractor is a successor and uphold the assessment of successorship liability.

A chiropractor protests the assessment of retail sales tax on nutrition products that he sold to patients. Because the products were dietary supplements, which the chiropractor could not prescribe, the chiropractor’s sales of the supplements were not exempt from retail sales tax. We deny the petition.

A yacht owner protests the Department’s assessment of WET on its yacht arguing that the value the Department used in assessing WET was overstated. We deny the petition.

A private educational institution that provides educational programs solely through the internet, disputes the assessment of retail sales tax and B&O tax on certain charges to its students, arguing that fees for online educational programs are specifically excluded from the definition of “digital automated service” and not subject to taxation as retail sales. We conclude that Taxpayer’s fees for its online educational programs are not taxable as retail sales, and that Taxpayer’s library and resource fees, science lab fees, and nursing program fees are tuition fees not subject to tax as retail sales. However, Taxpayer may owe use tax on certain property it used in this state as a consumer, for which sales tax was not paid. We grant the petition, but raise the issue of possible use tax liability and remand to the operating division for further findings and adjustments.

A wildfire suppression private contractor seeks a refund of tax, penalties, and interest paid to the Department for an assessment of service and other B&O tax, claiming that its activities are properly classified under the wholesaling B&O tax classification . . . . The petition is . . . denied . . . .

Two corporate officers of a now defunct computer installation and repair business protest a TFAA issued against them as individuals, stating that the amount assessed against the defunct business was in error. We conclude that the corporate officers are responsible for the corporation’s collected and unremitted retail sales tax and may not challenge the amount assessed against the underlying corporation. The assessment is affirmed.

A securities broker-dealer entity appeals the denial of a refund request and contends that it is entitled to the lower B&O tax rate provided for “international investment management services” under RCW 82.04.290. We conclude a broker-dealer does not provide investment management services and, therefore, does not qualify for the rate. Petition denied.

A speculative and custom builder protests the assessment of the reseller permit misuse penalty with regard to items purchased for consumption by the business, arguing that it was not aware that it improperly used its permit. Taxpayer also asserts that its lack of knowledge of its retail sales tax liability and the serious illness of Taxpayer’s member’s family are circumstances beyond Taxpayer’s control for waiver of penalties and interest. We deny the petition.