Washington Sales and Use Tax Protest / Refund Claim

WASHINGTON SALES AND USE TAX PROTEST AND REFUND CLAIM

TABLE OF CONTENTS

1. Caption and Mode Election
2. Introduction and Procedural Posture
3. Jurisdiction and Timeliness
4. Statement of Facts
5. Issues Presented
6. Argument
7. Refund Calculation Schedule
8. Relief Requested
9. Verification
10. Certificate of Service
11. Washington Practice Notes
12. Sources and References

1. CAPTION AND MODE ELECTION

STATE OF WASHINGTON

[☐ DEPARTMENT OF REVENUE — Administrative Review and Hearings Division]
[☐ BOARD OF TAX APPEALS]
[☐ THURSTON COUNTY SUPERIOR COURT (RCW 82.32.180 refund action)]

Docket / Letter ID No.: [________________________________]

Mode of Relief (select one or more):

• ☐ Petition for Administrative Review under WAC 458-20-100 (Rule 100) — challenging Notice of Balance Due dated [__/__/____]
• ☐ Notice of Appeal to Board of Tax Appeals under RCW 82.03.190 — appealing Determination No. [___] dated [__/__/____]
• ☐ Claim for Refund under RCW 82.32.060 — seeking refund of taxes paid in periods [__/__/____] to [__/__/____]
• ☐ Action for Recovery of Tax Paid under RCW 82.32.180 — original action in Thurston County Superior Court

Tax Type at Issue:

• ☐ State Retail Sales Tax — RCW 82.08
• ☐ Local Sales Tax — RCW Ch. 82.14
• ☐ Use Tax — RCW 82.12
• ☐ Deferred Sales Tax (consumer use)
• ☐ Wayfair / Marketplace Facilitator Tax
• ☐ Other: [___________________________]

Period(s) at Issue: [__/__/____] through [__/__/____]

Amount in Dispute: $[__________] (tax) + $[__________] (penalty) + $[__________] (interest) = $[__________] (total)

2. INTRODUCTION AND PROCEDURAL POSTURE

2.1. Taxpayer [TAXPAYER NAME] ("Taxpayer") respectfully submits this [Petition / Notice of Appeal / Claim for Refund] challenging the Department of Revenue's (the "Department" or "DOR") [Notice of Balance Due / Determination / denial of refund claim] issued [__/__/____] (the "Action").

2.2. The Action asserts additional Washington [retail sales / use / deferred sales] tax in the amount of $[__________] for the audit/payment periods identified above.

2.3. Taxpayer respectfully requests [reconsideration / cancellation / refund] for the reasons stated below.

3. JURISDICTION AND TIMELINESS

3.1. [Rule 100 Petition] This Petition is filed pursuant to WAC 458-20-100 within thirty (30) days of the postmark date of the Notice of Balance Due ([__/__/____]) and is therefore timely.

3.2. [BTA Appeal] This Notice of Appeal is filed pursuant to RCW 82.03.190 within thirty (30) days of the mailing date of the Department's Determination ([__/__/____]) and is therefore timely. The 30-day deadline is jurisdictional.

3.3. [Refund Claim] This Claim for Refund is filed pursuant to RCW 82.32.060 within four (4) years following the close of the calendar year in which the contested taxes were paid. The earliest payment included in this claim was made on [__/__/____].

3.4. [Superior Court Action] This Action is filed pursuant to RCW 82.32.180 within four years from the date of payment of the contested tax, and the contested tax has been paid in full.

3.5. Taxpayer [elects / does not elect] a [☐ formal / ☐ informal] hearing.

4. STATEMENT OF FACTS

4.1. Taxpayer Background

4.1.1. Taxpayer is a [corporation / LLC / partnership / sole proprietorship / individual consumer] organized under the laws of [STATE], with its principal place of business at [ADDRESS].

4.1.2. Taxpayer is registered with the Department under UBI No. [_________________] and engages in the business of [describe — retail, e-commerce, wholesale, manufacturing, services, etc.].

4.1.3. [For remote sellers] Taxpayer is a remote seller whose Washington activities [do / do not] exceed the $100,000 cumulative-gross-receipts threshold of RCW 82.08.052.

4.2. The Transactions at Issue

4.2.1. The transactions giving rise to the Action consist of [describe — e.g., online retail sales delivered into Washington from out-of-state warehouses; wholesale sales to in-state buyers; equipment purchases used in Washington].

4.2.2. Taxpayer [collected / did not collect] Washington retail sales tax from purchasers, on the ground that [recite legal basis: exempt sale under RCW ___; nontaxable service; out-of-state delivery; valid resale certificate; manufacturing exemption (RCW 82.08.02565); etc.].

4.2.3. The Department's adjustment recharacterizes these transactions as [taxable retail sales / taxable use / sourced to Washington under WAC 458-20-145].

4.3. Procedural History

4.3.1. Taxpayer [was audited / self-reported and paid] the tax at issue. The Notice of Balance Due / Determination was issued on [__/__/____].

4.3.2. Taxpayer [has paid / has not paid] the contested amount.

4.3.3. [For refund claims] Taxpayer paid the tax under good-faith but erroneous belief that the sale was taxable, and now seeks refund of $[__________] with interest.

5. ISSUES PRESENTED

5.1. Whether the transactions in issue are subject to Washington state retail sales tax under RCW 82.08.020.

5.2. Whether the transactions are properly sourced to Washington under RCW 82.32.730 and WAC 458-20-145 (destination-based sourcing).

5.3. Whether Taxpayer, as a remote seller, has substantial nexus with Washington under RCW 82.08.052 and the Wayfair substantial-nexus standard.

5.4. Whether the [manufacturing machinery and equipment / nonprofit / interstate-commerce / resale / casual-and-isolated-sale / other] exemption applies to the transactions.

5.5. Whether use tax under RCW 82.12.020 applies, and if so, whether Taxpayer is entitled to credit for sales/use tax paid to another state under RCW 82.12.035.

5.6. Whether the late-payment, substantial-underpayment, or failure-to-file penalty under RCW 82.32.090 should be waived for reasonable cause under RCW 82.32.105 / WAC 458-20-228(9).

5.7. Whether Taxpayer is entitled to a refund of $[__________] under RCW 82.32.060.

6. ARGUMENT

6.1. Standard of Review and Burden

6.1.1. Tax statutes imposing tax are construed strictly against the State and in favor of the taxpayer. Group Health Coop. v. Dep't of Revenue, 106 Wn.2d 391 (1986). Statutes granting exemptions are construed in favor of the taxing authority but must give effect to plain meaning.

6.1.2. The Department bears the burden of establishing the validity of any assessment that has been timely petitioned and supported by contrary evidence (RCW 82.32A.030).

6.2. Issue 1 — Nontaxable Transaction or Exemption

6.2.1. RCW 82.08.020 imposes retail sales tax on "retail sales" as defined in RCW 82.04.050. The transactions at issue are not retail sales because [explain — e.g., the items purchased are not "tangible personal property" sold at retail; the transaction is a sale-for-resale supported by a valid resale certificate under WAC 458-20-102; the transaction is the provision of a professional service excluded from RCW 82.04.050].

6.2.2. [For exemption arguments] The transaction qualifies for the [manufacturing machinery and equipment exemption under RCW 82.08.02565 / nonprofit exemption / agricultural exemption / interstate-commerce exemption / other] because [recite each statutory element].

6.3. Issue 2 — Sourcing

6.3.1. Washington adopted destination-based sourcing on July 1, 2008, conforming to the Streamlined Sales and Use Tax Agreement. Under RCW 82.32.730 and WAC 458-20-145, retail sales are generally sourced to the location where the buyer takes possession of the goods or, in shipped transactions, the destination of shipment.

6.3.2. The transactions in issue are properly sourced to [State / location], not Washington, because [describe delivery, possession, or use facts].

6.3.3. Local rates under RCW Ch. 82.14 follow the same destination-sourcing rules; the Department's reliance on origin-based assumptions is contrary to the statute and post-2008 sourcing scheme.

6.4. Issue 3 — Wayfair / Economic Nexus

6.4.1. RCW 82.08.052, enacted in response to South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), imposes a sales-tax collection obligation on remote sellers whose cumulative gross receipts from Washington sales exceed $100,000 in the current or immediately preceding calendar year. The 200-transaction alternative threshold was repealed effective March 14, 2019 (Laws of 2019, ch. 8).

6.4.2. Taxpayer's Washington-sourced gross receipts in the relevant calendar years were $[___] and $[___], both below the $100,000 statutory threshold. Accordingly, Taxpayer was not required to collect Washington retail sales tax during the audit period and the assessment is unsupportable.

6.4.3. Alternatively, even if the threshold was crossed, the obligation to collect commences only on the first day of the month at least 30 days after the threshold is exceeded, and the Department's assessment must be limited to that prospective period.

6.5. Issue 4 — Use Tax and Out-of-State Credit

6.5.1. RCW 82.12.020 imposes use tax on the use of tangible personal property in Washington when retail sales tax was not paid at time of acquisition. RCW 82.12.035 permits a credit for retail sales or use tax legally imposed and paid to another state.

6.5.2. Taxpayer paid sales/use tax of $[__________] to [STATE] on the same property at issue, evidenced by [purchase invoice / receipt]. Use tax due to Washington must be reduced by that amount.

6.6. Issue 5 — Penalty Waiver

6.6.1. RCW 82.32.105 and WAC 458-20-228(9) authorize penalty waiver where the taxpayer establishes circumstances beyond its control. Taxpayer's circumstances satisfy the standard because [describe — death/illness, fire/flood/casualty, written DOR advice (RCW 82.32A.020(2)), good-faith first-time error].

6.7. Issue 6 — Refund Entitlement

6.7.1. RCW 82.32.060 authorizes refund of taxes paid in excess of the amount properly due, provided a written claim is filed within four years following the close of the calendar year of payment. Taxpayer's claim is timely (Section 3.3 above) and supported by the Refund Calculation Schedule below.

6.7.2. Interest on refunds accrues from the date of overpayment under RCW 82.32.060 at the rate computed pursuant to RCW 82.32.050(2).

7. REFUND CALCULATION SCHEDULE

Plus statutory interest under RCW 82.32.060 from date of overpayment.

8. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that the [Department / Board of Tax Appeals / Court]:

• A. Cancel the Notice of Balance Due / Determination in whole, or in the alternative reduce the assessment to $[__________];
• B. Refund $[__________] of overpaid tax with statutory interest pursuant to RCW 82.32.060;
• C. Determine that Taxpayer's sales were properly sourced outside Washington and/or qualify for the claimed exemption(s);
• D. Determine that Taxpayer did not exceed the $100,000 economic-nexus threshold under RCW 82.08.052 for the periods in issue;
• E. Allow credit under RCW 82.12.035 for sales/use tax paid to other states;
• F. Waive all penalties under RCW 82.32.105 / WAC 458-20-228(9); and
• G. Grant such other and further relief as is just and proper.

9. VERIFICATION

I, [NAME, TITLE], declare under penalty of perjury under the laws of the State of Washington that I am authorized to make this verification on behalf of Taxpayer; that I have read the foregoing [Petition / Notice of Appeal / Claim / Complaint]; and that the factual statements herein are true and correct to the best of my knowledge.

Executed at [CITY], Washington, on [__/__/____].

[________________________________]

[NAME, TITLE]

10. CERTIFICATE OF SERVICE

I certify that on [__/__/____] I caused a copy of this [Petition / Notice of Appeal / Claim for Refund / Complaint] to be served on:

Washington Department of Revenue
Administrative Review and Hearings Division
PO Box 47460
Olympia, WA 98504-7460

Washington Board of Tax Appeals (if appeal stage)
PO Box 40915
Olympia, WA 98504-0915

Office of the Attorney General — Revenue and Finance Division (if superior court action)
PO Box 40123
Olympia, WA 98504-0123

[________________________________]

[NAME OF PREPARER], [TITLE]

11. WASHINGTON PRACTICE NOTES

• Destination-based sourcing. Washington has been destination-based for retail sales tax since July 1, 2008. The state and local rate are determined by the location where the buyer receives the goods. Sourcing errors are among the most common audit findings for in-state and out-of-state sellers alike.
• Economic nexus — single threshold. RCW 82.08.052 imposes a $100,000 cumulative-gross-receipts threshold (current or prior calendar year). The 200-transaction prong was eliminated March 14, 2019. Marketplace facilitators have separate collection obligations under RCW 82.08.0531.
• Reseller permit, not "resale certificate." Washington uses a state-issued Reseller Permit (formerly "resale certificate") under WAC 458-20-102. Buyer must hold a valid permit; seller's good-faith reliance is documented by retaining a copy. Single-use streamlined exemption certificates are also accepted in some contexts.
• Use tax mirror. RCW 82.12 use tax is the complement to retail sales tax: when sales tax was not paid at acquisition, use tax becomes due on first taxable use in Washington. Out-of-state credit under RCW 82.12.035.
• Refund deadlines. RCW 82.32.060 is a NONCLAIM PERIOD, not an ordinary statute of limitations. It cannot be tolled or extended absent a written assessment-period waiver. Calendar carefully.
• Pay first vs. petition first. Unlike federal Tax Court vs. district court, WA does not require pre-payment for BTA review. Pre-payment is required, however, for a superior court refund action under RCW 82.32.180.
• Marketplace facilitators. RCW 82.08.0531 makes marketplace facilitators (e.g., Amazon, eBay) responsible for collecting sales tax on behalf of third-party sellers using their platforms. Sellers should reconcile facilitator-collected tax to avoid double assessment.
• Local sales tax. RCW Ch. 82.14 imposes local sales/use tax administered by DOR using the same sourcing rules. Local-rate disputes are heard in the same Rule 100 / BTA forums.
• Penalty waiver — written advice reliance. RCW 82.32A.020(2) protects taxpayers who relied on specific written advice from the Department that proves erroneous. Verbal advice or web-page general guidance does not qualify.
• Wayfair retroactivity. The Department generally does not assess pre-October 1, 2018 periods on remote sellers based solely on economic nexus; assess relevance carefully if your audit reaches earlier years.

12. SOURCES AND REFERENCES

• RCW Ch. 82.08 (Retail Sales Tax) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.08
• RCW 82.08.052 (Remote seller — nexus) — https://app.leg.wa.gov/rcw/default.aspx?cite=82.08.052
• RCW Ch. 82.12 (Use Tax) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.12
• RCW 82.12.020 (Use tax imposed) — https://app.leg.wa.gov/rcw/default.aspx?cite=82.12.020
• RCW Ch. 82.14 (Local sales/use tax) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.14
• RCW 82.32.060 (Refund/credit) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.32.060
• RCW 82.32.180 (Recovery — superior court action) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.32.180
• RCW 82.32.730 (Sourcing) — https://app.leg.wa.gov/rcw/default.aspx?cite=82.32.730
• RCW 82.03.190 (BTA appeals) — https://app.leg.wa.gov/RCW/default.aspx?cite=82.03.190
• WAC 458-20-100 (Rule 100) — https://app.leg.wa.gov/WAC/default.aspx?cite=458-20-100
• WAC 458-20-145 (Sourcing) — https://app.leg.wa.gov/wac/default.aspx?cite=458-20-145
• WAC 458-20-178 (Use tax) — https://app.leg.wa.gov/WAC/default.aspx?cite=458-20-178
• WAC 458-20-193 (Interstate sales — nexus) — https://app.leg.wa.gov/wac/default.aspx?cite=458-20-193
• DOR Reviews and Appeals — https://dor.wa.gov/file-pay-taxes/reviews-and-appeals
• DOR Out-of-State Businesses — Reporting Thresholds — https://dor.wa.gov/education/industry-guides/out-state-businesses-reporting-thresholds-and-nexus
• WA Board of Tax Appeals — https://bta.wa.gov
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Group Health Coop. v. Dep't of Revenue, 106 Wn.2d 391 (1986)

Disclaimer: This template is provided for informational purposes only and does not constitute legal or tax advice. A qualified Washington attorney or CPA must review and customize this document before filing. Sales/use tax deadlines are jurisdictional and unforgiving; verify all citations and dates at app.leg.wa.gov and dor.wa.gov before use.