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
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
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