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From June 1, 2015 through June 30, 2015, qualifying registered and unregistered businesses in Tacoma, Washington may take part in a one-time program that waives penalties and interest on local City of Tacoma business tax and license fees due April 30, 2015 or earlier. The amnesty program applies to the following taxes: Business and Occupation (B&O) Taxes; Private Utility Taxes; Admissions Taxes; Gambling Taxes; Annual Business License Fees; Regulatory License Fees; and Unreported Liabilities. The program also waives 50% of civil penalties. For unregistered businesses, the “look-back” period is limited to four years in addition to the current year. Payment of all taxes and 50% of the civil penalty, including those due on or before July 31, 2015 must be paid by July 31, 2015.  Participants in the amnesty program waive their right to seek a refund or challenge the amount paid under the program.

(06/23/2015)

Washington has enacted legislation that implements amendments to the Streamlined Sales and Use Tax (SST) Agreement. Beginning July 1, 2015, if the state’s taxability matrix (required of SST member states) is amended, sellers and certified service providers are relieved from liability to the state and to local jurisdictions to the extent that the seller or certified service provider relied on the immediately preceding version of the state’s taxability matrix. Relief is available until the first day of the calendar month that is at least 30 days after the department of revenue submits notice of a change to the state’s taxability matrix to the SST Governing Board. (S.B. 5275, Laws 2015, effective July 24, 2015; House Bill Report, April 2015)

(05/20/2015)

Washington has updated a sales and use tax rule on the state’s exemption for certain solar energy, renewable energy, and solar-heat systems. The amended rule applies to exemptions that were effective beginning July 1, 2009.  The exemption for purchases of machinery and equipment used directly in a solar energy system capable of generating 10kW of electricity or less expires June 30, 2018. The 75% refund of sales and use tax paid on solar energy systems capable of generating more than 10kW of electricity expires January 1, 2020. The 75% refund of sales and use tax paid on machinery and equipment used directly in renewable energy systems that generate at least 1kW of electricity expires January 1, 2020. A person claiming a 75% refund of taxes paid on solar energy systems generating more than 10kW or on renewable energy systems generating at least 1kW must file an electronic annual tax incentive survey with the Washington Department of Revenue. A sales and use tax exemption on purchases of machinery and equipment used to produce thermal heat using solar energy is effective from July 1, 2013 through June 30, 2018. The full and partial exemptions apply to state and local taxes as well as to labor charges to install the qualified equipment. (WAC 458-20-263, Washington Department of Revenue, effective July 28, 2014)

(05/14/2015)

The Washington Department of Revenue has issued an advisory providing the substantial nexus thresholds for business and occupation (B&O) tax purposes. When the cumulative percentage change in the consumer price index for all urban consumers changes by 5% or more from the measurement date, the department must adjust the thresholds to reflect that change. For the 2015 calendar year, the threshold amounts are: receipts threshold, $267,000; property threshold, $53,000; payroll threshold, $53,000. The thresholds remain unchanged from 2014.  (Excise Tax Advisory No. 3195.2015, Washington Department of Revenue, February 3, 2015)

(03/30/2015)

An out-of-state company established nexus in Washington in 2013 under the business and occupation tax statutory threshold because the taxpayer had payroll of more than $53,000 in the state during the year. In October 2012, the taxpayer hired an employee who lived and worked remotely in Washington. The taxpayer’s argument that a portion of the amount of payroll it paid in 2013 was attributable to 2012 was rejected. Per a rule provision, "payroll" is defined as the total compensation paid during the calendar year. The taxpayer also argued for a waiver of any tax liability because its payroll was only slightly above the $53,000 threshold. This argument was also rejected. The Appeals Division had no authority to waive tax liability for a taxpayer that meets any of the nexus thresholds in the relevant law. Even though the taxpayer ceased having an employee in Washington, nexus is established for 12 months and the B&O Tax was due for the 12 months following the cessation of nexus. (Tax Determination No. 14-0306, Washington Department of Revenue, February 26, 2015)

(03/30/2015)

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