Washington ~ Sales and Use Tax: Purchaser of Assets Was Liable For Unpaid Taxes

A taxpayer that purchased the assets of several Washington businesses was liable for use tax and/or deferred sales tax because there is a conclusive presumption that the selling price does not include retail sales tax. Washington law allows an exception in the case where the seller “advertises” the price as including the tax or that the seller is paying the tax. In the present case, the taxpayer’s agreement with the seller involved a private contract with no advertising. Furthermore, the asset purchase agreement did not contain language to indicate that it was a tax-included purchase and that the taxpayer’s share of the tax was included in the purchase price.

Though the taxpayer asserted that the department should have pursued the seller for outstanding tax liability, the department is authorized to assess either the buyer or seller for uncollected retail sales tax. Though the taxpayer and the seller may have agreed that each would be responsible for half of the retail sales taxes, the department was not a party to this contract and was not bound by it.

Determination No. 14-0409, Washington Department of Revenue, June 30, 2017, ¶204-246



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