August, 2021. I have not seen DOR do a worse job of explaining any sales tax law than how the sales tax applies to federal construction contracts, especially contracts for military construction. And that can create traps for developers and contractors, especially sub contractors. This situation is particularly surprising… CONTINUE
PROVING WHOLESALES IN AUDIT WITHOUT RESELLER PERMIT
This is an UPDATE to the article I posted October 16, 2014, entitled “Taking a Washington State Reseller Permit not the Only Way to Qualify for Wholesale Reporting.” In that article I discussed that the DOR’s published rule, WAC 458-20-102, provides an alternative method for a seller to prove to DOR that sales… CONTINUE
Update on Washington State & FBA Nexus and Amazon Announcement to Start Collecting Washington Sales Tax on Third Party Online Sales
We have received a lot of calls over the past few months from out of state online retailers who were contacted by Washington’s Department of Revenue (DOR). DOR asserted that these retailers must start collecting Washington state sales tax (WSST) on their sales made to customers residing in Washington state if they owned inventory stored… CONTINUE
IRS Collection Letters are Confusing (and probably intended to be)
Under law adopted by Congress about 20 years ago the IRS must follow a lock step procedure before it can begin enforced collection actions such as garnishment on wages, bank accounts, receivables and seizure of all other types of property. One of the most urgent type of call our office gets is one from an… CONTINUE
Careless Payments Cost Business Washington Sales Tax
How the money runs can alter whether a payment that is ordinarily not subject to retail sales tax becomes subject to the tax. Architecture and design fees, for example, are normally classified for B & O purposes under the service classification and service providers do not have to collect retail. But where, for example, a… CONTINUE
Rare Taxpayer Win on Washington State Successorship Liability
In a recent blog posted to this site (May 6, 2016) we discussed the risk in purchasing a business without understanding Washington’s successor liability law. A new Department of Revenue appeals decision released June 24, 2016, is a surprising taxpayer success, and one which should be read and studied by anyone facing a possible successor situation. While… CONTINUE
Buying or Selling a Small Business? Don’t Overlook Washington’s Iron Fisted Successor Liability
Many years ago we represented several local waste disposal businesses that were bought out by large national firms. The price was negotiated by the parties, and the contracts were largely written by national law firms and given to the seller and to me for review and comment. When we got to the question of Washington… CONTINUE
How Washington Revenue Imposes Sales Tax on Architectural and Design Services
Unlike the Federal income tax Washington’s tax system is not based on a uniform tax on net income derived from all sources: it is a gross receipts tax with rates dependent on what classification an activity fits into. Moreover, a business may perform several different activities which fall into different classifications, taxable at different rates,… CONTINUE
Washington “Zapper” Criminal Prosecution – Use of Zapper May Have Tipped off Auditors to Unreported Cash Sales
The Department of Revenue announced on its website on February 5, 2016, that the state had filed charges against the owner of Facing East, a Bellevue restaurant, alleging among other charges the use of sales suppression software to hide cash transactions, and “pocketing nearly $395,000 in sales tax collected from her patrons.” Revenue has for… CONTINUE
Washington State Seen as Prosecuting for Failure to Remit Smaller Amounts of Sales Tax.
We reprint in full below a report of a criminal conviction published on the Department of Revenue’s website. We do so because the amount of restitution ordered, some $41,000, indicates that the amount of sales tax collected but not remitted was fairly small (we have participated in audits where no criminal charge occurred even though… CONTINUE
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