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

82.04.080(1), making it subject to B&O tax. AMC argues that it was not the employer of those

employees, so the wage payments do not constitute AMC’s labor expenses within the statutory

definition of gross income. Alternatively, AMC asserts the payments should have been excluded

from AMC’s gross income under WAC 458-20-111 (Rule 111). AMC also contends that the
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No. 60254-7-II

Department has improperly imputed income to AMC and that the imputation of income is a

violation of due process.

Because the parties do not dispute any issues of material fact, and because the record shows

that AMC is the employer, we hold that the wages AMC paid to employees from the operating

account constituted “value proceeding or accruing by reason of the transaction of the business

engaged in,” and were properly included within AMC’s gross income. RCW 82.04.080(1). Also,

because AMC failed to establish that it acted as an agent of the property owners in making the

wage payments, Rule 111 does not apply. Finally, because the wages are “value proceeding or

accruing by reason of the transaction of the business engaged in,” we hold that the Department did

not improperly impute income and there is no due process violation. Therefore, the superior court

did not err when it denied AMC’s motion for summary judgment and granted summary judgment

in favor of the Department. We affirm the superior court.

FACTS

A. BACKGROUND

AMC is a property management company that provides comprehensive services to owners

(Owners) of multifamily housing. Those services include “budgeting, leasing, marketing, and

managing the different operational aspects” of a property, often referred to as a “‘Project.’”