Washington Tax Decisions

A former president . . . of a disbanded corporation petition[s] for review a TFAA against [him] . . . . The petition is denied.

An individual domiciled [out-of-state] protests the assessment of use tax on a motor vehicle purchased in Washington and registered [out-of-state]. Because the individual owned property in Washington, worked in Washington, and spent significant time in Washington during the period in which the motor vehicle was purchased, he maintained sufficient ties to Washington to categorize him as a dual resident of Washington and [another state]. Therefore, he is not eligible for the nonresident use tax exemption for the motor vehicle in question and the assessment is affirmed.

A municipal corporation protests the imposition of leasehold excise tax on street obstruction permits issued to persons needing to obstruct the public’s right of way during construction projects. Because the municipal corporation has a real property interest in the public’s right of way, and because the permits allow the permit holder to exercise dominion and control over a specific location, the street obstruction permits create a taxable leasehold interest. The petition is denied.

An out-of-state franchisor of . . . yogurt stores protests the assessment of B&O tax on grounds that the assessment discriminates against interstate commerce in violation of the Commerce Clause of the U.S. Constitution. We deny the petition.

Taxpayer seeks waiver of late payment penalties on annual returns for 2015 and 2016 asserting that the late filing was due to a former accountant’s fraudulent conduct and mismanagement. As the Taxpayer has not sufficiently substantiated the assertion of fraud or established that reasonable safeguards were in place, we find the requirements for a waiver under WAC 458-20-228 are not met and deny the Taxpayer’s petition.

A Washington construction company protests the assessment of retailing B&O tax and retail sales tax on grounds that the Department of Revenue Audit Division erroneously classified Taxpayer as a prime contractor rather than a speculative builder. Taxpayer also contends that, if it is a prime contractor, it is eligible for tax paid at source deductions. We deny the petition in part and grant the petition in part.

A business that provides “crossfit” training disputes re-classification of its income from the service and other activities B&O tax classification to the retailing B&O tax classification and the resulting assessment of [retail sales] tax. The business asserts the services it offers are primarily instructional in nature and distinguishable from retail physical fitness services offered by regular gyms. The business also requests waiver of penalties and interest because its owner was on active duty participating in an armed conflict when the tax liability accrued. The petition is denied in part and granted in part.

An out-of-state ATM card transaction processor protests the assessment of B&O tax in Washington on various grounds, including (1) that some of its gross income should have been classified under the royalties tax classification; (2) the Department’s taxation of Taxpayer’s gross income is unconstitutional; and (3) if constitutional, the Department’s taxation of Taxpayer’s gross income was based on an improper attribution method. The petition is denied.