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

Citation: Wash. Court of Appeals published opinion — D2 60254-7-II Published Opinion.pdf
Jurisdiction: Washington (state)
Source: Official source
Original Source: https://www.courts.wa.gov/opinions/pdf/D2%2060254-7-II%20Published%20Opinion.pdf ↗

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In October 2021, AMC paid the $481,442.36 tax assessment for the audit period.

Subsequently, in June 2023, AMC filed an action in superior court seeking a refund for the tax

assessment paid. AMC alleged that the amounts it paid to the onsite employees, whom they called

Owners’ employees, did not constitute “gross income” under RCW 82.04.080. CP at 7. AMC

also alleged that the funds the Department taxed are monies that AMC paid only as an agent of the

Owners and that AMC satisfied the requirements of Rule 111.

C. CROSS MOTIONS FOR SUMMARY JUDGMENT

AMC filed a motion for summary judgment. AMC argued that the onsite employees were

employees of the Owners so the funds AMC transferred from a project’s operating account to pay

onsite employee wages did not qualify as AMC’s gross income. AMC also argued that Rule 111

applied to its circumstances because the PMAs established that AMC was an agent of the Owners.

Alternatively, AMC contended that a refund was appropriate because (1) “there was never

a transfer of funds from the Owner to AMC” and (2) AMC provided only management services;

it “did not agree to provide maintenance, lawn care, or other rental property services.” CP at 25.

Thus, according to AMC, the onsite employee wages were not compensation for rendition of

services and did not fall within the definition of gross income found in RCW 82.04.080.6 Finally,

6
The definition of “‘gross income of the business’” found in RCW 82.04.080(1) is