Washington Appeals Board Finds Taxpayer Received Rent Payments, Not Taxable License Payments

The Washington Board of Tax Appeals (BTA) granted the taxpayer’s motion for summary judgment for a refund of taxes paid. The Department of Revenue (DOR) conducted an audit and assessed taxes for failing to report a portion of income from franchisees that the taxpayer deemed attributable to a lease. The auditor concluded the payments were for the grant of a license to use real property and not a lease of real property. The taxpayer paid the assessment and filed an appeal with the BTA, arguing that the store agreements were clear in their intention to create a landlord-tenant relationship. The ...