Blog Archives: Joe Haberzetle

One of the perennial challenges faced by taxing authorities is identifying and contacting individuals and businesses who are unaware (or purposefully ignorant) of the tax filing obligations they may have. In an effort to encourage unregistered taxpayers with outstanding excise tax liabilities for prior periods to come forward and voluntarily register with the Washington Department of Revenue (DOR), the DOR offers a Voluntary Disclosure Agreement (VDA) Program that includes the following benefits:

  • a limited “look back” period on previous liabilities of four years plus the current year (the period open under the traditional statute of limitations for taxpayers registered with the DOR);

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Owners and managers of multiple entity businesses holding California real estate investments may be surprised to learn that laws written almost 100 years ago can have a dramatic impact on their taxes.

In the 1930s, California implemented special reporting rules for multiple entity business models.  The rules, reportedly targeting the movie industry because profits from film production were being increasingly realized outside the state, required that all businesses collectively operating a “single trade or business” be taxed as a single entity.

This treatment is often referred to as unitary or combined reporting.  More than half of all states that impose an income tax now require some form of combined reporting,

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Among the issues Washington will vote on in the November election is whether the state should enact the Carbon Emission Tax Act via Initiative 732. The Initiative proposes a tax on the sale or use of carbon. If it passes, Washington will be the first state in the nation to impose a carbon tax.

Overview of the Proposed Carbon Tax

Initiative 732 is modeled after British Columbia’s 2008 Carbon Tax Act. The objective of the carbon tax is to change behaviors by taxing activities that contribute to global climate change. Specifically, the goals of Initiative 732 are to encourage businesses to develop and use alternative energy solutions,

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But There Are Some Winners, Too

By now you’ve probably read or heard about the brinksmanship leading up to the enactment of the State of Washington’s operating budget for the 2015 – 2017 biennium. The $38.2 billion budget was passed by the legislature in the wee hours of the morning of June 30, and signed into law by Governor Inslee that night, narrowly avoiding the state government shutdown that would have otherwise resulted.

Among the headline features of the new budget are tuition reductions of 15 – 20% at the state’s public universities and increased funding for K-12 education, which will allow for reduced class sizes in grades K-3 and expanded full-day kindergarten.

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Washington business and occupation (B&O) tax is generally imposed on the gross revenues of a business, without deductions for operating expenses. Because expenses cannot be deducted, a potential for multiple layers of tax obligations exists for business models that involve more than one entity, and the property management industry is no exception.

Hotel, senior living and similar property owners commonly hire third-party managers to manage and operate their facilities. Both the property owner and the property manager have B&O tax obligations on their gross receipts for properties located in Washington State. The property owner may have B&O tax liability on some or all of the gross receipts generated by the property.

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