Washington Refund Requests for Local Brokered Natural Gas Use Tax to Be Denied.

The Washington State Supreme Court overturned the Court of Appeals decision in G-P Gypsum Corp. v. Department of Revenue, and upheld the Department of Revenue’s decision that local brokered natural gas (BNG) use tax is imposed where the gas is burned regardless of where it is first received by the taxpayer. This decision allows the Department to deny refund claims for previously paid local BNG use tax. After the Court of Appeals decision, some taxpayers stopped reporting the local portion of BNG use tax. The Department is planning to bill those taxpayers for the unreported tax. Legislation went into effect on June 10, 2010, to clarify that the local BNG use tax is imposed where a taxpayer burns or stores gas. Therefore, Court’s decision applies to the use of gas before June 10, 2010 (News Release, Washington Department of Revenue, July 29, 2010).

Posted on November 14, 2010