Washington Tax Decisions

A mortgage products and services provider protests apportionment of certain services fees to the state of Washington. Taxpayer contends that document review fees and closing charges are not “loan service fees” and should be apportioned as “receipts from services” using an alternative calculation of its costs of performance. We deny Taxpayer’s petition.

A service provider protests the reclassification of receipts from the warehousing B&O tax classification to the service and other activities B&O tax classification. We deny the petition.

A manufacturer and wholesaler of bulk sanitary products petitions for correction of an assessment of litter tax contending that sales of bulk paper products to commercial customers do not fall within the ambit of the litter tax. We grant the petition.

A property management company that failed to pay B&O tax seeks a refund of penalties because it asserts the Department should have known Taxpayer was reporting its business activities improperly and notified Taxpayer of the error. Taxpayer argues that it made the error in “good faith” and, had it been notified, it would have paid the tax on time. Taxpayer’s petition is denied.

An employer of record disputes the assessment of service and other activities B&O tax on amounts received from affiliates to compensate for the employer of record’s payment of the affiliates’ employee expenses. The employer of record asserts it qualifies as a paymaster and such amounts are excluded from gross income under WAC 458-20-111 and RCW 82.04.43393. Alternatively, should we find these payments are included in gross income, the employer of record asserts these payments should be sourced to the locations of the affiliates’ properties being managed by the employees and apportioned outside Washington. Petition denied.

Seller of vehicle extended warranty contracts protests assessment of Retailing B&O Tax and Retail Sales Tax on sales of extended warranty service contracts by dealer directly to Washington consumers as part of a vehicle purchase transaction. Taxpayer also protests sampling methodology for estimated tax liability. Taxpayer’s petition is denied.