Washington Tax Decisions

Taxpayer appeals the taxation of intercompany charges. Taxpayer’s petition is denied.

A LLC that sells medical marijuana and marijuana-related products protests the Department’s assessment of retail sales tax and retailing B&O tax arguing that it is a collective garden and it does not sell or provide medical marijuana to consumers in exchange for donations. Taxpayer also argues that even if there were retail sales, those sales are exempt either as sales of drugs pursuant to a prescription or as sales of medicines of a botanical origin. We deny the petition.

A wind farm seeks administrative review of a denial of its request to refund retail sales tax, asserting the tax was paid on tax exempt machinery and equipment used in generating electricity. We deny the petition.

Quarry operator protests use tax/deferred sales tax assessed on the value of M&E on the grounds that (i) its screening and washing activities take place in conjunction with crushing and blending; (ii) it satisfies the majority use test. The petition is denied.

A manufacturer of wire and cable products, protests the Department’s Audit Division’s disallowance of the M&E use tax exemption it took on reels it used to store and ship cable. We sustain the tax assessed concluding the reels are not part of the manufacturing process and do not qualify for the M&E use tax exemption.

A berry wholesaler protests the assessment of wholesaling B&O tax, interest, and resulting penalties on its Washington sales. We conclude that the Department’s assessment was proper because the taxpayer’s customers received taxpayer’s goods in Washington. We also conclude that the Department was not bound by a previous letter ruling because the facts upon which the letter ruling was based did not reflect Taxpayer’s actual business practices. Finally, we find that the Department was not barred by the statute of limitations because Taxpayer was an unregistered business. Taxpayer’s petition for correction of assessment is denied.

A cable television distribution company petitions for the refund of leasehold excise tax paid on the utility pole contract charges it paid to public entities in Washington. At issue is whether the utility pole contracts convey the requisite “possession and use” to constitute a taxable leasehold interest under RCW 82.29A.020. Taxpayer’s petition is denied.

A taxpayer protests the assessment of B&O taxes and retail sales taxes based off of bank records and argues taxes were assessed against the wrong entity. The taxpayer’s petition is denied.

An automobile dealership seeks executive level reconsideration of Determination 08-0306 in which we concluded that dealer cash incentive program awards are income to the business and subject to B&O tax under the other business or service activities classification. We affirm our decision in Det. No. 08-0306 as Taxpayer has not proved that dealer cash incentive program awards qualifies as discounts to or reductions on the selling prices of the vehicles.

A company, engaged in the manufacture and installation of custom casework, seeks reconsideration of a decision that use tax was due on value of cabinets installed rather than on the cost of component materials. We affirm our decision that, because the company was the “consumer” of the materials it manufactured for installation under RCW 82.04.190(6), it owed use tax on the value of the cabinets under RCW 82.12.010(1)(a) and WAC 458-20-17001(7)-(9) rather than just on value of the component parts. We sustain the assessment as issued and deny the Taxpayer’s petition.