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

AMC argues that the superior court erred when it denied its motion for summary judgment

and granted summary judgment in favor of the Department based on the conclusions that (1) AMC

was the employer of the onsite employees, (2) the onsite employee wage payments taken from the

operating fund were part of AMC’s gross income, and (3) Rule 111 did not apply. In the

discount, delivery costs, taxes, or any other expense whatsoever paid or accrued
and without any deduction on account of losses.

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No. 60254-7-II

alternative, AMC asserts that the Department has improperly imputed income to AMC, which is a

violation of due process. We disagree.

A. STANDARD OF REVIEW

We review summary judgment decisions de novo. Royal Oaks Country Club v. Dep’t of

Revenue, 2 Wn.3d 562, 568, 541 P.3d 336 (2024). Summary judgment is appropriate when “there

is no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a

matter of law.” CR 56(c). Here, the parties do not dispute any issues of material fact. Instead,

the parties dispute the application of tax statutes and rules to the facts of this case. “When the

issue is how a tax statute applies to the facts of a case, the reviewing court treats the issue as a

question of law and reviews it de novo.” Royal Oaks, 2 Wn.3d at 568; see also Wash. Imaging

Servs., LLC v. Dep’t of Revenue, 171 Wn.2d 548, 555, 252 P.3d 885 (2011).

B. B&O TAX APPLIES

1. Legal Principles

a. Business and occupation tax

Washington levies a B&O tax “for the act or privilege of engaging in business activities”

in the state. RCW 82.04.220(1). The B&O tax applies broadly and is imposed “‘upon virtually