Could a beverage distributor exclude affiliate service payments from B&O-tax gross income by characterizing the arrangement as a joint venture?

Plain-English summary

The Washington Department of Revenue held that payments from related wine distributors reimbursing a beverage wholesaler for warehousing, delivery, payroll, bookkeeping, sales, marketing, and other operating services were the wholesaler's B&O-tax gross income. Characterizing the arrangement as a joint venture or cost-sharing relationship did not exclude the payments.

The written agreement said the wholesaler would provide extensive services, keep its employees and equipment, and receive reimbursement for its costs and expenses—including reimbursement of B&O tax on those receipts. The related entities retained their own sales revenue and directed major business decisions. Although the agreement also used agency language and the taxpayer later described the arrangement as a joint venture, the disputed money was paid for services the taxpayer performed.

Washington defines gross income broadly to include compensation and other value received from business without subtracting costs. Reimbursement can be taxable even when it produces no profit. Related corporations remain separate taxpayers, and there is no general affiliate or joint-venture exemption. Even if a joint venture existed, it would be a separate person, and service payments to a venturer would remain taxable absent an express exemption. The Department therefore did not need to decide whether the parties actually formed a joint venture.

What this means for you

Related business groups

Intercompany cost reimbursement is not automatically a balance-sheet wash for Washington B&O tax. Identify the service provider, the recipient, and the consideration paid under each agreement.

Joint ventures

Distinguish profit distributions from payments for services. Washington decisions may treat genuine profit distributions differently, but a member's compensation or cost reimbursement for services remains gross income.

Contract and tax teams

Contract language matters, but labels do not override the economic and legal arrangement. Agreements that list services, preserve one party's employees and assets, and require reimbursement strongly support taxable service income.

Common questions

Q: Does zero markup keep an affiliate reimbursement out of gross income?

A: No. Washington treats money received to reimburse the costs of providing services as value from the business even when no profit is realized.

Q: Would proving a common-law joint venture have changed the result?

A: No. The determination assumed one could exist and still found no exemption for service payments between the venture, its members, or co-venturers.

Q: Are all joint-venture distributions taxable?

A: The determination distinguishes distributions of venture profit from payments for services. The disputed receipts were reimbursements for services, not profit distributions.

Q: Does affiliation merge the entities for B&O-tax purposes?

A: No. Washington generally respects each legal entity as a separate person and taxes its own business receipts unless a specific statute provides relief.

Citations and references

• RCW 82.04.080, .090, .140, and .220 (gross income and B&O tax)
• RCW 82.04.030, .066, and .270 (persons, business activity, and entity liability)
• Pullman Co. v. State, 65 Wn.2d 860, 400 P.2d 91 (1965)
• Getty Images (Seattle), Inc. v. City of Seattle, 163 Wn. App. 590, 260 P.3d 926 (2011)
• Washington Sav-Mor Oil Co. v. Tax Commission, 58 Wn.2d 518, 364 P.2d 440 (1961)
• Bravern Residential II, LLC v. Department of Revenue, 183 Wn. App. 769, 334 P.3d 1182 (2014)
• Det. No. 99-176, 19 WTD 456 (2000) (profit distributions versus service payments)

Source

• Landing page: Washington Tax Decisions ZIP files
• Original PDF: 45WTD109.pdf
• Source archive: Volume 45 ZIP (member wtdvol45/45WTD109.pdf)

Original ruling text

Det. No. 23-0042R, 45 WTD 109 (June 9, 2026)

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Cite as Det. No. 23-0042R, 45 WTD 109 (2026)
BEFORE THE ADMINISTRATIVE REVIEW AND HEARINGS DIVISION
DEPARTMENT OF REVENUE
STATE OF WASHINGTON
In the Matter of the Petition for Reconsideration )
of Assessment of
)
)
...
)
)
)

DETERMINATION
No. 23-0042R
Registration No. . . .

RCW 82.04.220; RCW 82.04.080; RCW 82.04.090: B&O TAX – MEASURE – JOINT VENTURE. Amounts received by a taxpayer from an affiliate for providing services to that affiliate is included in the taxpayer’s gross income of the business as value proceeding or accruing by reason of the business engaged in by a taxpayer. Headnotes are provided as a convenience for the reader and are not in any way a part of the decision or in any way to be used in construing or interpreting this Determination. NATURE OF THE CASE Gabriella Herkert, T.R.O. – A wholesale distributor of beer and non-alcoholic beverages protests the inclusion of certain proceeds in its measure of income for business and occupation (B&O) tax purposes. Taxpayer claims a portion of the measure of its income used by the Department to calculate taxpayer’s B&O tax liability should not have been included because taxpayer engages in providing such services as a joint venture with two related entities. We deny taxpayer’s petition. 1 ISSUE Under RCW 82.04.220 and RCW 82.04.090, what is the measure of taxpayer’s gross income? FINDINGS OF FACT
. . . (Taxpayer) distributes beer and non-alcoholic beverages on a wholesale basis in Washington.
...
In 2002, [Entity 1], and [Entity 2], (collectively, Related Entities) were formed to distribute wine in Washington and [State]. [Entity 1] operates primarily in . . . Washington. [Entity 2] operates in
[State] and . . . in Washington.

1

Identifying details regarding the taxpayer and the assessment have been redacted pursuant to RCW 82.32.410.

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Taxpayer provides warehouse facilities and other services to the Related Entities. In 2002, the Related Entities contracted these services with [Business], a predecessor in interest to Taxpayer. 2 In 2011, Taxpayer restated agreements with the Related Entities (Agreement). The Agreement memorializes the services that Taxpayer provides to the Related Entities for the operation of the Related Entities’ wine distribution business. Recital C of the Agreement states:
[Related Entities] desire to retain the services of [Taxpayer] for the operation of
[Related Entities’] Wine distribution business . . . in the state of Washington (“[Related Entities’] Business”) and to share warehousing and other services with
[Taxpayer], as described in this Agreement, on the terms and conditions set forth herein. If so requested by the [Related Entities] after the date hereof, the services to be provided hereunder shall be expanded by the [Related Entities] to include the distribution of distilled spirits alcoholic beverage products, subject to providing such advance notice as may be required to facilitate efficient implementation of services, and in such event the term the [Related Entities’] Business will include the distribution of such products. Recital D of the Agreement states:
[Taxpayer] desires to provide the services to the [Related Entities] for the [Related Entities]’ operation of the [Related Entities’] Business and to share certain warehousing and other services with the [Related Entities], on the terms and conditions set forth herein. The Agreement includes the basic provisions of the engagement (Engagement): 1.1.1 The [Related Entities] hereby appoints [Taxpayer] to provide certain services 3 to, and share certain services with, the [Related Entities] for the operation of the
[Related Entities’] Business, as more specifically set forth below (collectively, the “Services”) on the terms and conditions set forth herein, and [Taxpayer] hereby agrees to accept such appointment and to provide the Services. 1.1.2 The Services shall include all services determined by the [Related Entities] and [Taxpayer] to be necessary or reasonably desirable to operate the [Related Entities’] Business up to the levels and extent substantially equivalent to
[Taxpayer’s] past operation of the Wine business, which shall include, but not limited to, all aspects of the following: (a) Sales and marketing of Wine; The record does not include documentation showing Taxpayer succeeding [Business] in interest. However, the agreements between Taxpayer and the Related Entities are restatements of agreements previously between the Related Entities and [Business]. 3 During its hearing on reconsideration before the Administrative Review and Hearings Division (ARHD), Taxpayer contended that it did not provide any services to the Related Entities. 2

Det. No. 23-0042R, 45 WTD 109 (June 9, 2026)

(b) Warehousing and delivery services, including warehousing point of sale materials for the [Related Entities’] wine Business; (c) General and administrative services (G&A), such as administrative, managerial, operation, bookkeeping and support services, including, without limitation, preparation of budgets, projections, business plans, periodic reports, billing, invoicing, collection of receivables, maintenance of bank accounts in accordance with the direction and authorizations of the [Related Entities], and assisting in the preparation of tax returns; (d) Corporate services including provision of warehouse space, executive offices space, furniture, equipment, and general office services including telephone, telecopier, courier and utility services; and (e) Purchasing and maintenance of levels of inventory in accordance with an annual business plan, discussed at greater length in Section 2.4 below (“Business Plan”), and the instructions of the Managers of Related Entities (collectively referred to herein as the “Management Committee”). . . . .

...

Section 1.5 The [Related Entities] and [Taxpayer] agree and
acknowledge that, unless otherwise specified herein, all major decisions concerning the operation of the assets and the [Related Entities]’ Business shall be made solely by the [Related Entities] through the Management Committee, That [Taxpayer] shall be performing the Services pursuant to the directions and instructions provided by the [Related Entities], and that the [Related Entities] shall be solely responsible for the results and consequences of its decisions and actions including the method, nature and other aspects of the operation of the Assets and the [Related Entities’] Business and the profitability thereof; provided, however, that [Taxpayer] employees are authorized to make the operational decisions which are necessary to perform their responsibilities under this Agreement.

2.1 No Fee. [Taxpayer] shall receive no fee or other compensation for the Services performed hereunder; however [Taxpayer] shall receive reimbursement from
[Related Entities] for (a) the costs and expenses paid or incurred by [Taxpayer] in connection with the Services as set forth herein; and (b) 100% of any and all business and occupation or similar gross receipts tax imposed on [Taxpayer’s] receipt of reimbursements from [Related Entities] in accordance with and under this Agreement.
...
[3.1.1(b)] All employees of [Taxpayer] providing the Services shall remain the sole employees of [Taxpayer] for all purposes . . . however, [Related Entities] shall reimburse [Taxpayer] for the salaries and other payroll expenses . . . of [Taxpayer’s] employees in accordance with the provisions hereof.

111

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...
[3.1.6] Ownership of Equipment. Unless otherwise agreed by the Parties on a case by case basis or as otherwise provided herein, all of the equipment, materials, supplies, and other assets currently owned by [Taxpayer], and not specifically transferred or assigned to [Related Entities] by [Taxpayer] in writing, as well as all of the equipment, materials, supplies and other assets acquired by [Taxpayer] during the term of this Agreement, in accordance with the Business Plan or with the approval of the Management Committee . . . shall be property of [Taxpayer] regardless of [Related Entities’] reimbursement to [Taxpayer] in connection therewith under this Agreement, and [Related Entities] shall not acquire ownership or other interest therein, except as provided herein. Agreement (emphasis added). Section 3.2 of the Agreement details the Related Entities’ reimbursement of Warehousing and Delivery (3.2.1); Sales and Marketing (3.2.2); Inventory (3.2.3); General and Administrative (3.2.4); and Corporate (3.25). With the exception of Inventory and third-party advertising expenses, which the Related Entities pay directly to their vendors, the Agreement provides that the Related Entities reimburse Taxpayer for its “costs and expenses.” 4 The Agreement also states: Section 9.1 The [Related Entities] hereby releases [Taxpayer] and any officer, director, agent or employee of [Taxpayer] from and against any claims or damages, including mismanagement or insufficient profits, arising out of or related to
[Taxpayer’s] performance of the Services hereunder, provided that such claims or damages do not result from or relate to any material breach of this Agreement which is not cured within the applicable cure period, if any, on the part of [Taxpayer] or of any subsidiary or affiliate of [Taxpayer] (the [Taxpayer] Party). Section 12 [Taxpayer] and the [Related Entities] acknowledges that (i) [Taxpayer] is acting under this Agreement as an agent of the [Related Entities], and (ii) to the extent authority has been granted pursuant to the terms of this Agreement,
[Taxpayer] shall have the authority to act for, bind and obligate the [Related Entities], except to the extent such action would be contrary to policies or resolutions adopted by the [Related Entities’] Management Committee. In sum, under the terms of the Agreement, Taxpayer and the Related Entities retain the revenues related to each party’s respective sale of beer, malt beverages, non-alcoholic beverages, wine and spirits. Each party pays certain business expenses, such as advertising and inventory directly to their vendors. For expenses such as warehousing, delivery, and bookkeeping, the Related Entities reimburse Taxpayer for its other expenses under the Agreement Section 2.1, for providing the services listed in the Agreement Section 1.1.2. Taxpayer only disputes inclusion of the payment During its hearing on reconsideration before ARHD, Taxpayer described its relationship with the Related Entities as a cost-sharing relationship.

4

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for other expenses from Related Entities in Taxpayer’s measure of gross income in this request for reconsideration. Taxpayer did not register the purported joint venture with the Department. The purported joint venture did not file or pay excise tax. 5 The Department’s Audit Division (Audit) examined Taxpayer’s records for the period January 1, 2017, through December 31, 2017. On February 4, 2022, the Department issued [letter] assessing
$ . . . .6 The tax deficiency arose based on Audit’s conclusion that Taxpayer was providing services to the Related Entities for which Taxpayer received gross proceeds classified as service and other activities subject to B&O tax. On March 8, 2022, Taxpayer timely requested review. Taxpayer raised the same arguments Taxpayer previously made for prior periods resulting in two determinations denying Taxpayer’s petitions. Taxpayer maintained that Taxpayer and the Related Entities are members of a joint venture under common law, and that allocation of costs among joint venturers does not result in gross proceeds to Taxpayer, subject to B&O tax. Taxpayer’s arguments are substantively similar to the arguments Taxpayer raised in the prior petitions, namely, that the Agreement satisfies all of the common law elements of a joint venture. Taxpayer requests the Department “cancel the 2017 assessment of service and other B&O tax . . . . ” In the alternative, the Taxpayer asked the Department to “stay any decision in this appeal pending the outcome of the superior court appeal referenced above.” 7 On February 23, 2023, the Department denied Taxpayer’s petition in Det. No. 23-0042. Taxpayer timely requested reconsideration. Taxpayer requests that the Department stay this case pending resolution of similar litigation on the same issues in a prior period. Taxpayer contends that it is in a valid joint venture relationship with the Related Entities. 8 Taxpayer also contends that the amounts paid to Taxpayer from the Related Entities are not compensation for services provided by Taxpayer or included in Taxpayer’s measure of gross income, but, rather, are non-deductible expenses of the joint venture excluded from Taxpayer’s gross income.

Taxpayer asserted that the purported joint venture ceased to operate in 2020. Any reference to a joint venture does not include a conclusion as to whether a joint venture existed under common law. 6
[Letter’s] total assessment of $ . . . includes $ . . . in tax, $ . . . in penalties and $ . . . in interest. 7 On February 14, 2023, the Superior Court issued an oral decision in [Taxpayer] v. State of Washington Dep’t. of Revenue, . . . . The Superior Court concluded that Taxpayer provided services to a related entity under Agreement but that there was no “joint venture” exemption or deduction in the B&O tax. The Superior Court upheld the Department’s determinations for previous periods. 8 Taxpayer spent significant time during its hearing before ARHD explaining the manner in which the purported joint venture operated, including maintaining a single bank account with both co-venturers listed on checks and invoices. Taxpayer stated that the co-venturers met frequently, more often than required under the terms of their written agreement, to determine proportional allocation of mutual expenses based on product lines. Individual expenditures were charged 100% to the individual. Profit participation was determined annually. Taxpayer stated that the purported joint venture maintained a master general ledger with sub-ledgers for each participant. 5

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ANALYSIS
The state of Washington imposes B&O tax on every person “for the act or privilege of engaging in business activities” and the amount of tax is determined by the measure of the gross income of the business. RCW 82.04.220. “Business” for B&O tax purposes includes “all activities engaged in with the object of gain, benefit, or advantage to the taxpayer or to another person or class, directly or indirectly.” RCW 82.04.140. Similarly, the term “gross income of the business” is broadly defined as “the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, . . . and other emoluments however designated,” without any deduction for the costs or expenses of the business. RCW 82.04.080(1). The term “value proceeding or accruing” is defined as “the consideration, whether money, credits, rights, or other property expressed in terms of money, actually received or accrued.” RCW 82.04.090. The receipt of money or credits as reimbursement for the costs of providing services is value proceeding or accruing by reason of the transaction of business, even though no profit is realized. Pullman Co. v. State, 65 Wn.2d 860, 867, 400 P.2d 91 (1965); Getty Images (Seattle) Inc. v. City of Seattle, 163 Wn. App. 590, 606, 260 P.3d 926 (2011). Since the amount received is “value proceeding or accruing” under RCW 82.04.090, it is “gross income of the business” under RCW 82.04.080(1). In this case, the amount received is gross income of Taxpayer’s business. These statutes all advance the Legislature’s intent “to impose the business and occupation tax upon virtually all business activities carried on within the state.” Simpson Inv. Co. v. Dep’t of Revenue, 141 Wn.2d 139, 149, 3 P.3d 741 (2000) (quoting Time Oil Co. v. State, 79 Wn.2d 143, 483 P.2d 628 (1971)). “Broader language could hardly be devised to convey the idea implicit in [these] definitions that the tax applies to everything that is earned, received, paid over to or acquired by the seller.” Engine Rebuilders, Inc. v. State, 66 Wn.2d 147, 150, 401 P.2d 628 (1965). Washington’s B&O tax is pyramiding in nature. See Det. No. 10-0197, 30 WTD 61 (2011); Det. No. 88-370, 7 WTD 5 (1988); Det. No. 88-197, 5 WTD 369 (1988). While the B&O tax applies broadly, tax exemption or deductions apply narrowly. The intent to exempt gross income from taxation must be clear from the language of the statute. TracFone Wireless, Inc. v. Dep’t of Revenue, 170 Wn.2d 273, 296-97, 242 P.3d 810 (2010); see also Bravern Residential, II, LLC v. Dep’t of Revenue, 183 Wn. App. 769, 778, 334 P.3d 1182 (2014) (“Tax exemptions may not be created by implication.”). Consistent with these guiding principles, B&O tax applies “unless a specific exemption exists.” Dot Foods, Inc. v. Dep’t of Revenue, 185 Wn.2d 239, 245, 372 P.3d 747 (2016). There is no general B&O tax exemption for amounts received by a business entity from a related entity. 9 Consequently, when a business entity sells goods or provides services to a related entity for compensation, B&O tax applies. Wash. Sav-Mor Oil Co. v. Tax Commission, 58 Wn.2d 518, 523, 364 P.2d 440 (1961). In Washington Sav-Mor Oil, the taxpayer argued that wholesale sales it made to its parent, Time Oil Company, should be disregarded for purposes of the state’s B&O tax In 2013, the Legislature enacted a targeted B&O tax exemption for a business that provides qualified “paymaster services” to its affiliates. See RCW 82.04.43393. Taxpayer does not assert that any of its gross income is exempt under that statute. 9

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because taxpayer was “in reality only a part of Time Oil Company, and one cannot make a sale to oneself.” Id. at 521. The Supreme Court rejected the argument, holding that a corporation is a separate legal entity from its owners and that “courts will ignore the fiction of corporate entity only with caution, and when the circumstances justify it, and when it is used as a subterfuge to . . . perpetrate a fraud.” Id. at 523. The Court further explained that “[t]he legislature has not seen fit to exclude transactions between affiliated corporations, and we find in the facts of this case nothing which would justify the judicial engrafting of such an exclusion upon the statute.” Id. . . . . The Court of Appeals applied the same principle in Getty Images, holding that amounts the taxpayer received as reimbursement for administrative and managerial services provided to its subsidiaries was gross income of the business and subject to the City of Seattle’s local B&O tax.[10] Getty Images, 163 Wn. App. 590 at 606. The party providing those services, Getty Images (Seattle) Inc., was a separate entity from its affiliates and the “broad definition of gross income and ‘emoluments however designated’ includes the receipt of . . . funds by Getty Seattle to pay for the services provided” to its affiliates. Id. at 606-07. There is no legal or logical reason why the B&O tax principle applied in Washington Sav-Mor Oil and Getty Images would apply differently with respect to a joint venture. See, Impecoven v. Dep’t of Revenue, 120 Wn.2d 357, 361, 841 P.2d 752 (1992) (rejecting the contention that B&O tax did not apply to insurance commissions received from affiliated insurance agents merely because the parties to the transaction were a “group of individuals acting as a unit”); Cf. Bravern Residential, II, [183 Wn. App. at 779] (under Washington law, there is no recognized exception that permits a contractor to avoid sales tax and B&O tax on construction services performed on land of a “coventurer”). It is well established that a business entity, including a joint venture, is a separate “person” from its owners. Dep’t of Revenue v. Nord Nw. Corp., 164 Wn. App. 215, 230, 264 P.3d 259, 266 (2011). If a joint venture between Taxpayer and the Related Entities did exist, the unnamed joint venture would be a separate “person” under the B&O tax code. See RCW 82.04.030 and RCW 82.04.220. The joint venture engaging in business under RCW 82.04.066 would be subject to B&O tax under RCW 82.04.270. 11 Therefore, the existence of a joint venture agreement between the parties is irrelevant as it does not alter the taxability of amounts received by Taxpayer in exchange for its provision of services to the purported joint venturers. Consequently, amounts Taxpayer received for services it provided to the venture or to other co-venturers would be subject to B&O tax unless an express exemption exists. Even if we were to assume a joint venture existed, Taxpayer has not established how the income at issue would not be subject to B&O tax. In general, “[t]axation is the rule and exemption is the exception.” Budget Rent–A–Car, 81 Wn.2d 171, 174, 500 P.2d 764 (1972). Exemptions and deductions are “tax preferences” under RCW 43.136.021, and must be “[construed] strictly . . . though fairly and in keeping with the ordinary meaning of their language, against the taxpayer.”
[Group Health Coop. of Puget Sound, Inc. v. Washington State Tax Comm'n, 72 Wn.2d 422, 429,
[10 The principles applied by Court of Appeals in Getty Images to the City of Seattle's B&O tax are relevant here as the City of Seattle's definition of gross income for B&O purposes is substantively identical to the definition of gross income used in RCW 82.04.080(1) (See SMC 5.30.035(D) (incorporated by SMC 5.45.030)).] 11 The purported joint venture did not register with the Department or file and pay excise tax liability during the tax period.

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433 P.2d 201 (1967))] Further, “[w]hen interpreting . . . deduction provisions, ‘the burden of showing qualification for the tax benefit . . . rests with the taxpayer . . . .’” Simpson Investment Co. v. Dep’t of Revenue, 141 Wn.2d 139, 149-50, 3 P.3d 741 (2000), (quoting Group Health, [72 Wn.2d at 429 ]. See Stroh Brewing Co. v. Dep’t of Revenue, 104 Wash. App. 235, 240, 15 P.3d 692 (2001) (“[t]he taxpayer has the burden of establishing eligibility for an exemption”); see also Port of Seattle v. State, 101 Wn. App. 106, 1 P.3d 607 (2000) (“exemption statutes are construed strictly against the taxpayer, and the taxpayer has the burden of establishing any exemption”). Every taxpayer is therefore responsible for being able to demonstrate that it qualifies for each claimed deduction under a strictly construed interpretation of the rules. Taxpayer has not explained what exemption would cover reimbursements for costs in a joint venture situation. While the Department has held that distributions of profits to a member of a joint venture are nontaxable, payments for services rendered are not. See Det. No. 99-176. 19 WTD 456 (2000), citing to Det. No. 90-74, 3 WTD 431 (1990). Furthermore, based on the definition of “person” in RCW 82.04.030 and other related B&O tax statutes, Washington Courts have respected the different persons engaging in business in Washington State, even though those persons may be affiliated with each other in some manner. See, e.g., Impecoven, 120 Wn.2d 357 (independent contractor insurance agents affiliated with broker are not one “person” for B&O tax purposes and not “group of individuals acting as a unit” under RCW 82.04.030.); Nordstrom Credit, Inc. v. Dep’t of Revenue, 120 Wn.2d 935, 845 P.2d 1331 (1993) (subsidiary formed by parent to finance parent’s accounts receivable engaged in arms-length transaction with parent and was a separate “person” for B&O tax purposes); American Sign & Indicator Corp. v. State, 93 Wn.2d 427, 429, 610 P.2d 353 (1980) (“The tax liability of a corporation must be considered without regard to its relationship to a parent or subsidiary company or to the existence of common officers, employees, facilities, or stock ownership.”). Washington law treats different entities as different persons, each subject to B&O tax on their taxable activities. See RCW 82.04.220. There is no basis for concluding that payments between entities that form a joint venture together or payments from a joint venture to one of the members for services rendered to the joint venture are not subject to B&O tax. See also Bravern Residential II, LLC, [183 Wn. App. 769]. The result treats Taxpayer the same whether it is related to the entities for which it provides services, or not. If the Related Entities receive the same services from an unrelated entity as those provided by Taxpayer, and if those Related Entities pay the unrelated entity the exact amount it paid to Taxpayer, that unrelated entity would owe B&O tax on its service income. There is no legal or logical reason why the result should be different merely because the Related Entities entered into service agreements with closely related entities instead of with an unrelated third party. As our Supreme Court pointed out many years ago, “[s]tatutes providing for the raising of revenue required by the state in carrying on its functions are vital to its welfare,” and any person, whether natural or artificial, “should not be declared exempt from the payment of a tax required of business generally, unless it clearly appears that the constitution and laws of the United States (or of the state) require such exemption.” North Pac. Coast Freight Bureau v. State, 12 Wn.2d 563, [571], 122 P.2d 467 (1942) (quoting Fisher’s Blend Station v. State Tax Comm’n, 182 Wash. 163, 167, 45 P.2d 942 (1935)). There is no “joint venture” exemption or exclusion to the B&O tax, and Taxpayer is not immune from the tax even if it had formed a joint venture with the Related Entities. Having determined that the existence of a joint venture between Taxpayer and the Related Entities is not determinative of Taxpayer’s B&O tax liability, we do not consider further whether Taxpayer has

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established the existence of such a joint venture. As discussed above, amounts received by Taxpayer from the Related Entities for Taxpayer’s providing services to the Related Entities is gross income to Taxpayer. We deny Taxpayer’s petition. DECISION AND DISPOSITION Taxpayer's petition is denied. Dated this 2nd day of October 2023.