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
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
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
Settlement Options with IRS and Washington State When Your Business Closes
When a business fails and closes it often has unpaid federal and Washington State taxes. Usually there isn’t much in the way of federal income taxes (Washington State has no income tax) but even if there are unpaid income taxes those will not normally be a serious issue if the business has operated as an… CONTINUE
Pre-Audit Consultation – Well Worth the Money
In an earlier article we discussed how our office persuaded the Washington Department of Revenue Appeals Division that our client had correctly reported its B & O tax as a wholesaler, and had no obligation to collect sales tax, even though it had not been able to obtain reseller permits from the out of state… CONTINUE
INTEREST RATES for STATE EXCISE TAXES for CALENDAR YEAR 2015
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
New Year’s Eve Court of Appeals Decision Roils Washington’s Nexus Waters
Washington law provides that for this State to assert B & O tax jurisdiction over an out of state business that makes wholesales into this State two things must occur: (1) the seller must have nexus with this State, and (2) the goods must be received by the buyer in this state. WAC 458-20-193(7). That there… CONTINUE