Clients who are appealing a state tax audit to the Department of Revenue’s appeals division sometimes ask me whether they should pay the items in the audit report that they do not dispute. They reason that this will save interest and it may improve their position before the appeals division. Unless I am asked to… CONTINUE
Taking a Washington State Reseller Permit not the Only Way to Qualify for Wholesale Reporting
It is the position of the Department of Revenue that a taxpayer must have taken a Washington State reseller permit (or, before January 1, 2010, a resale certificate) from its customer to qualify its reporting for B & O as wholesale. Rule 102 provides that: The seller has the burden of proving that the buyer… CONTINUE
IRS 1099-K Increases Risk of Washington State Sales Tax Audit
In 2008 Congress enacted legislation requiring institutions processing credit cards for businesses that take cards in exchange for goods or services to give such businesses a IRS 1099-K form annually, and to furnish the IRS with a copy of the form. Section 6050W (which was added to the Internal Revenue Code by the Housing… CONTINUE
Confusion and Expense for Small Businesses Dealing with Washington Cities’ B & O Taxes
The Association of Washington Cities states that as of October 2007 approximately 188 cities required a local business license (including the 40 with a city B & O tax). The city B & O taxes, like the Washington Sate B & O taxes are levied at a percentage rate on the gross receipts of the… CONTINUE
Unsure if You Have to Collect Washington’s Sales Tax on Your Service Activities? – You May not be Alone.
Businesses that provide services generally know whether or not they are required to collect sales tax. But sometimes there are cases where the law is unclear whether or not sales tax must be collected. Often, in fact, the Department of Revenue may treat taxpayers within the same industry differently, ruling in some cases that a business must collect… CONTINUE
Court Rejects City of Seattle Overreaching
Many businesses are surprised not only that the City of Seattle has a tax on business receipts to begin with, but that the City of Seattle attempts to extend its taxing authority so far. This article looks at one case in which the courts drew a line – a case involving the well know… CONTINUE
The Continuing Debate Over Defining Taxable Income – Getty Images (Seattle), Inc. v. City of Seattle and Klein Honda v. State of Washington
In 1960, the US Supreme Court ruled that when Mr. Berman gave his friend, Mr. Duberstein, a Cadillac to thank him for some business referrals, Mr. Duberstein (who thought he had received a gift and did not report it as income) had to include the car in income as taxable compensation. The Supreme Court said… CONTINUE
RETAILERS: DON’T RISK LOSING THE NON-RESIDENT SALES TAX EXEMPTION
Retailers selling in areas of Washington State with high tourist traffic often make sales to nonresidents who claim they are exempt from Washington sales tax. While a retailer is not required to make a sale without charging tax, most find it is good business to do so. But, while it is easy to give the… CONTINUE