Washington Tax Decisions

A grocery store business protests an assessment of retail sales tax, retailing B&O tax, and evasion penalty, asserting that the auditor overestimated its retail sales based on its bank records and that it did not intentionally underreport its tax liability. The taxpayer’s petition is denied.

An out-of-state online retailer of brand name apparel and accessories (and its successor) appeals assessments of retailing B&O and retail sales tax, asserting that the Washington activities of its wholesaling affiliate are insufficient to establish taxable nexus. Held: A wholesaling affiliate’s promotion to third-party retailers of the same brand name products sold by an online retailer affiliate, wholesale product packaging containing the online retailer affiliate’s website, and the existence of a retail “store locater” on the online retailer affiliate’s website, are insufficient activities to create taxable nexus for the online retailer. The taxpayer’s petition is granted.

A Washington LLC that provides services in and outside Washington objects to the Department calculation of “throw-out income” for purposes of apportioning its income. Taxpayer’s petition is denied.

The operator of a motel disputes the disallowance of its claimed partial exemption from retailing B&O tax and retail sales tax for gross income that Taxpayer claims it received from “nontransient” tenants. Taxpayer also claims that it does not owe TPA charges for certain transactions. Based on additional records provided by Taxpayer, we remand the assessment for possible adjustment of the retailing B&O and retail sales tax assessed on room rentals. We deny Taxpayer’s petition with regard to collected and unremitted TPA charges.

The purchaser of the assets of Washington businesses objects to the imposition of use tax/deferred retail sales tax. The assessment is upheld.

Taxpayer, a supplier of telecommunications equipment, protests the assessment of wholesaling B&O tax. Taxpayer claims that the Department failed to properly deduct income from wholesale transactions of sales performed outside of Washington, and that it is entitled to deduct certain discounts from its taxable sales income. We conclude that the taxpayer has failed to provide adequate documentation of its claims that its Washington sales are overstated, and further conclude that the discounts it seeks are not bona fide and are not deductible. Taxpayer’s petition is denied and the assessment is upheld.

An out-of-state company that generates revenue from digital media programmatic ad buying (classified as internet advertising services) objects to the Department’s use of internet user population, rather than general population, to represent the relative population in its customers’ market in proportionally attributing its Washington receipts. . . . . The taxpayer’s petition is . . . denied in part.

[Taxpayer] petitions for review of the Department’s denial of its request for a waiver of the interest and penalties assessed on its late payment of a tax assessment. Taxpayer asserts that the fact that the USPS did not postmark its payment on the same day it was placed in the mail is a circumstance beyond its control that caused its late payment. Taxpayer’s petition is denied.