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WASHINGTON: B&O Tax: Waste Tax Inapplicable to Activities Conducted Outside City

Posted on: Sunday, 7 August 2005, 03:00 CDT

A Washington city's business and occupation tax on waste collection applied only to activities conducted within the city, as specified in the city ordinance imposing the tax.

The taxpayer contracted with a shipyard for collection, transport, and disposal of shipyard wastes. Waste collection occurred within the city, while waste treatment and disposal occurred almost entirely outside the city

. Transportation occurred both within and outside the city. Under the language of the city ordinance, the tax was a percentage of the total gross income rendered within the city. The court concluded that, if the city had intended to tax all, rather than only a portion of, gross income of a waste collection business, it would not have included the modifying phrase "rendered within the city." Therefore, the measure of income to which the tax applied was limited to that portion of gross income rendered, meaning earned from services performed, within the city limits. (Burlington Environmental, Inc. v. City of Bremerton, Washington Court of Appeals, Division II, No. 31923-3-II (unpublished opinion), July 7, 2005.) Copyright CCH Incorporated: Federal and State Tax Jul 26, 2005

Source: State Tax Review

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