Wash. Court of Appeals published opinion — D2 60254-7-II Published Opinion.pdf

Citation: Wash. Court of Appeals published opinion — D2 60254-7-II Published Opinion.pdf
Jurisdiction: Washington (state)
Source: Official source
Original Source: https://www.courts.wa.gov/opinions/pdf/D2%2060254-7-II%20Published%20Opinion.pdf ↗

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consideration, whether money, credits, rights, or other property expressed in terms of money,

actually received or accrued.” RCW 82.04.090. “Under this broad definition [of gross income],

a service provider may not deduct any of its own costs of doing business, including its labor costs,

from its gross income.” Pilcher v. Dep’t of Revenue, 112 Wn. App. 428, 436, 49 P.3d 947 (2002),

review denied, 149 Wn.2d 1004 (2003).

Courts presume taxes are valid. Irwin Nats. v. Dep’t of Revenue, 195 Wn. App. 788, 804,

382 P.3d 689 (2016), review denied, 187 Wn.2d 1017, cert. denied, 583 U.S. 871 (2017). A

taxpayer seeking a refund of B&O taxes that it paid bears the burden of proving the Department

incorrectly assessed the tax. Wash. Imaging Servs., 171 Wn.2d at 555; Protective Admin. Servs.,

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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 60254-7-II

Inc. v. Dep’t of Revenue, 24 Wn. App. 2d 319, 325, 519 P.3d 953 (2022) (“A taxpayer must prove

that the tax paid was incorrect and prove the correct amount of tax in order to establish that they

are entitled to a refund.”); RCW 82.32.180. Whether a party is entitled to a tax refund is a question

of law we review de novo. Protective Admin. Servs., 24 Wn. App. 2d at 325.

b. Rule 111

WAC 458-20-111, known as Rule 111, excludes certain “‘pass through’” payments from

a taxpayer’s gross income in cases when the taxpayer “assumes solely agent liability.” Rho, 113

Wn.2d at 567; WAC 458-20-111. Rule 111 provides, in relevant part:

The word “advance” as used herein, means money or credits received by a
taxpayer from a customer or client with which the taxpayer is to pay costs or fees
for the customer or client.