case studies

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A property management firm with multiple legal entities operating in the state of Washington was looking at possible assessments in excess of $4 million based on a variety of issues, including intercompany transactions as well as activity classification and deductibility issues for excise tax purposes. If the deductions were denied, the activity would be subject to retail sales tax. If it was a retail sale, a substantial portion of the activity would be sourced to Washington and subjected to retail sales tax. We worked with the state of Washington Department of Revenue and resolved all issues with only minor assessment and appealed the retail classification issue. 

A livestock wholesaler in Washington was audited by the state of Washington Department of Revenue (Department).  The Department asserted that the livestock auction sales resulted in taxable sales in Washington and proposed an assessment in excess of $1 million.  We reviewed the taxpayer's activities, records and conducted on-site investigations of taxpayer's processes.  We determined that the auction sales complied with the rules for treating a sale as an exempt international sale.  After presenting our findings to the Department, we were able to get the Department's assessment fully abated by establishing that the sales did not occur in Washington.  

A product distributor located in Washington was audited by the state of Washington Department of Revenue (Department) and the city of Seattle.  The Department asserted that products transported through the state of Washington en route to Asia were subject to excise tax.  The city similarly asserted that these same transactions were subject to city excise tax.  We evaluated the laws and rules and determined that the sales should not be taxed by either the state or city.  We established to the state's satisfaction that these sales were exempt international sales and further confirmed that the Department does not tax the activity of certain federally recognized domestic international sales corporations.  Further, we established that the activities attributable to Seattle were nominal, resulting in a substantial reduction of proposed city business license tax.  

We reviewed the activities of a multistate financial institution operating in numerous states and determined that as a result of recent changes to the relevant laws and rules, the taxpayer had overpaid sales/use taxes with regard to its digital products procurement.  We worked with the taxpayer to compile the necessary records to establish that the purchases were exempt from sales tax, sourced to a different location or taxed at lower rates.  We then computed the refunds and submitted multiple refund claims to the various tax authorities where tax was overpaid.  We pursued the refund claims through the audit and appeals processes.  Ultimately, we were able to obtain confirmation from the taxing authorities that taxpayer was entitled to multimillion-dollar tax refunds in the form of payments and credits. 

We reviewed the activities of a multistate retailer operating stores in Washington and determined that as a result of excise tax classification issues, taxpayer had overpaid taxes with regard to its promotional activities as well as printing and publishing activities, along with other miscellaneous tax overpayments.  We were able to work with the taxpayer to compile the necessary records to compute the refund and submit the refund claim to the state of Washington Department of Revenue (Department).  We pursued the refund claim through the audit and appeals processes.  Ultimately, we were able to reach a settlement with the Department that resulted in a multimillion-dollar tax benefit to the taxpayer. 

We reviewed the activities of a multistate financial institution operating in Washington and determined that as a result of excise tax classification issues, taxpayer had overpaid taxes with regard to investment management services activities.  We worked with the taxpayer to compile the necessary records to establish that the services constituted international investment management service activities taxed at a reduced excise tax rate, computed the refund and submitted multiple refund claims to the state of Washington Department of Revenue (Department).  We pursued the refund claims through the audit, appeals and litigation processes.  Ultimately, we were able to reach a settlement with the Department that resulted in a multimillion-dollar tax refund to the taxpayer. 

Multiple property management firms each with multiple legal entities operating in the state of Washington were looking at restructuring their activities to address possible pyramiding of their gross receipts tax obligations.  We evaluated taxpayers' operations and advised regarding the application of permitted Professional Employment Organization (PEO) structuring.  We advised that the application of this particular structure could mitigate significant excise tax on staffing expenses.  We worked with taxpayer to draft a letter ruling for submission to the state of Washington Department of Revenue (Department).  We worked with all parties and outside counsel to refine the ruling for submission to the Department.  We submitted the ruling and after several discussions with Department personnel, we received a favorable tax ruling confirming eligibility for the PEO tax deduction.

We reviewed the activities of a multistate retailer/wholesaler operating via the internet in numerous states, including Washington, and determined that as a result of the U.S. Supreme Court decision in Wayfair, the business had a sales tax filing obligation in numerous jurisdictions.  We reviewed taxpayer's records and assessed the potential historic liability as well as possible state income tax risk.  We summarized the registration process in each jurisdiction, including establishing the Wayfair effective date adopted by each jurisdiction, and initiated contact with the various states to commence the registration and reporting process.  We represented taxpayer through the registration process and advised the taxpayer regarding commencing its periodic tax reporting process in each jurisdiction.  We also advised taxpayer regarding establishing an exemption for its wholesale sales. 

We represent a taxpayer that has been engaged in substantial activity in the state of Washington for a number of years.  The business manages multiple properties for a variety of property owners.  The state of Washington Department of Revenue (Department) audited the taxpayer and asserted that tax was due in relation to certain advances and reimbursements made by property owners.  We advised the business that the transactions in question likely qualify for the excise tax exclusion for advances/reimbursements.  On behalf of the taxpayer, we advanced this position to the Department.  The auditors disagreed and we appealed the matter within the Department.  Ultimately, the Department took the position that the exclusion did not apply.  So, we assisted the business with pursuing the matter in Thurston County Superior Court.  The matter is now pending before the state of Washington Court of Appeals.

We represent a multistate financial institution with regard to evaluating the filing obligations of various subsidiaries.  We determined that certain subsidiaries had state of Washington tax registration and excise tax filing obligations.  We then analyzed the potential tax liability and evaluated the benefit of coming forward via tax amnesty or pursuant to a voluntary disclosure agreement (VDA).  We contacted the state of Washington Department of Revenue and pursued amnesty for a number of subsidiary entities, advising the taxpayer throughout the amnesty process.  Subsequently, we represented the taxpayer in bringing forward additional subsidiary entities via the VDA process.  In total, we assisted the taxpayer in bringing forward approximately twenty different subsidiaries.  

We represent a business regarding its excise tax and sales tax obligations.  We've advised the business regarding various multistate tax audits and its ongoing excise and sales tax reporting obligations.  In particular, we've advised the business regarding its sales tax obligations relative to digital products.  As part of this work, we evaluate contracts and invoices and assess the characterization of the purchases of various products to determine the taxability.  We communicate with vendors and taxing authorities when issues arise in order to resolve any tax questions.  The sales taxation of digital products is a complex area of taxation. 

When the state of Washington legislature was in the process of promulgating a new apportionment statute, we were invited to provide testimony outlining some of the key considerations that should be understood in adopting a new apportionment framework for purposes of state of Washington excise tax.  The legislature ultimately adopted a statute consistent with the framework utilized in many other states for income tax purposes.  This approach enables businesses to better align and allocate their activities consistently across multiple jurisdictions.