RCW 82.32.655
Tax avoidance.
(1) It is the legislature's intent to require all taxpayers to pay their fair share of taxes. To accomplish this purpose, it is the legislature's intent to stop transactions or arrangements that are designed to unfairly avoid taxes.
(2) The department must disregard, for tax purposes, the tax avoidance transactions or arrangements that are described in subsection (3) of this section. The department must deny the tax benefit that would otherwise result from the tax avoidance transaction or arrangement. In determining whether the department must disregard a transaction or arrangement described under subsection (3) of this section, the department may consider:
(a) Whether an arrangement or transaction changes in a meaningful way, apart from its tax effects, the economic positions of the participants in the arrangement when considered as a whole;
(b) Whether substantial nontax reasons exist for entering into an arrangement or transaction;
(c) Whether an arrangement or transaction is a reasonable means of accomplishing a substantial nontax purpose;
(d) An entities' relative contributions to the work that generates income;
(e) The location where work is performed; and
(f) Other relevant factors.
(3) This section applies only to the following transactions or arrangements:
(a) Arrangements that are, in form, a joint venture or similar arrangement between a construction contractor and the owner or developer of a construction project but that are, in substance, substantially guaranteed payments for the purchase of construction services characterized by a failure of the parties' agreement to provide for the contractor to share substantial profits and bear significant risk of loss in the venture;
(b) Arrangements through which a taxpayer attempts to avoid tax under chapter 82.04 RCW by disguising income received, or otherwise avoiding tax on income, from a person that is not affiliated with the taxpayer from business activities that would be taxable in Washington by moving that income to another entity that would not be taxable in Washington; and
(c) Arrangements through which a taxpayer attempts to avoid tax under chapter 82.08 or 82.12 RCW by engaging in a transaction to disguise its purchase or use of tangible personal property by vesting legal title or other ownership interest in another entity over which the taxpayer exercises control in such a manner as to effectively retain control of the tangible personal property.
(4) In determining whether a transaction or arrangement comes within the scope of subsection (3) of this section, the department is not required to prove a taxpayer's subjective intent in engaging in the transaction or arrangement.
(5) The department must adopt rules to assist in determining whether a transaction or arrangement is within the scope of subsection (3) of this section. The adoption of a rule as required under this subsection is not a condition precedent for the department's exercise of the authority provided in this section. Any rules adopted under this section must include examples of transactions that the department will disregard for tax purposes.
(6) This section does not affect the department's authority to apply any other remedies available under statutory or common law.
(7) For purposes of this section, "affiliated" means under common control. "Control" means the possession, directly or indirectly, of more than fifty percent of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise.
[ 2010 1st sp.s. c 23 § 201.]
NOTES:
Application—2010 1st sp.s. c 23 §§ 201 and 202: "Except as provided in section 202 of this act, section 201 of this act applies to tax periods beginning January 1, 2006." [ 2010 1st sp.s. c 23 § 1703.]
Effective date—2010 1st sp.s. c 23: "Except as otherwise provided in this act, this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect May 1, 2010." [ 2010 1st sp.s. c 23 § 1708.]
Findings--Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Structure Revised Code of Washington
Chapter 82.32 - General Administrative Provisions.
82.32.010 - Application of chapter stated.
82.32.023 - Definition of product for agreement purposes.
82.32.026 - Registration—Seller's agent—Streamlined sales and use tax agreement.
82.32.030 - Registration certificates—Threshold levels—Central registration system.
82.32.033 - Registration certificates—Special events—Promoter's duties—Penalties—Definitions.
82.32.052 - Interest and penalties—Waiver for amounts unpaid as of February 1, 2011.
82.32.055 - Interest and penalties—Waiver for military personnel.
82.32.057 - Application of interest to delinquent taxes—Extensions.
82.32.062 - Additional offset for excess payment of sales tax.
82.32.085 - Electronic funds transfer—Generally.
82.32.087 - Direct pay permits.
82.32.090 - Late payment—Disregard of written instructions—Evasion—Penalties.
82.32.105 - Waiver or cancellation of penalties or interest—Rules.
82.32.110 - Examination of books or records—Subpoenas—Contempt of court.
82.32.117 - Application for court approval of subpoena prior to issuance—No notice required.
82.32.120 - Oaths and acknowledgments.
82.32.130 - Notice and orders—Service.
82.32.135 - Notice, assessment, other information—Electronic delivery.
82.32.140 - Taxpayer quitting business—Liability of successor.
82.32.150 - Contest of tax—Prepayment required—Restraining orders and injunctions barred.
82.32.160 - Correction of tax—Administrative procedure—Conference—Determination by department.
82.32.170 - Reduction of tax after payment—Petition—Conference—Determination by department.
82.32.180 - Court appeal—Procedure.
82.32.190 - Stay of collection pending suit—Interest.
82.32.200 - Stay of collection—Bond—Interest.
82.32.210 - Tax warrant—Filing—Lien—Effect.
82.32.212 - Tax warrant—Notice of lien.
82.32.215 - Revocation of certificate of registration.
82.32.220 - Execution of warrant—Levy upon property—Satisfaction.
82.32.230 - Agent of the department of revenue may execute.
82.32.237 - Notice and order to withhold and deliver—Continuing lien—Effective date.
82.32.240 - Tax constitutes debt to the state—Priority of lien.
82.32.245 - Search for and seizure of property—Warrant—Procedure.
82.32.260 - Payment condition to dissolution or withdrawal of corporation.
82.32.265 - Use of collection agencies to collect taxes outside the state.
82.32.270 - Accounting period prescribed.
82.32.280 - Tax declared additional.
82.32.290 - Unlawful acts—Penalties.
82.32.291 - Reseller permit—Unlawful use—Penalty—Rules.
82.32.300 - Department of revenue to administer—Chapters enforced by liquor and cannabis board.
82.32.310 - Immunity of officers, agents, etc., of the department of revenue acting in good faith.
82.32.330 - Disclosure of return or tax information.
82.32.340 - Chargeoff of uncollectible taxes—Destruction of files and records.
82.32.350 - Closing agreements authorized.
82.32.360 - Conclusive effect of agreements.
82.32.380 - Revenues to be deposited in general fund.
82.32.410 - Written determinations as precedents.
82.32.430 - Liability for tax rate calculation errors—Geographic information system.
82.32.440 - Project on sales and use tax exemption requirements.
82.32.470 - Transfer of sales and use tax on toll projects.
82.32.480 - Washington forest products commission—Disclosure of taxpayer information.
82.32.490 - Electronic database for use by mobile telecommunications service provider.
82.32.495 - Liability of mobile telecommunications service provider if no database provided.
82.32.500 - Determination of taxing jurisdiction for telecommunications services.
82.32.505 - Telecommunications services—Place of primary use.
82.32.510 - Scope of mobile telecommunications act—Identification of taxable and nontaxable charges.
82.32.515 - Applicability of telephone and telecommunications definitions.
82.32.520 - Sourcing of calls.
82.32.525 - Purchaser's cause of action for over-collected sales or use tax.
82.32.531 - Nexus—Trade convention attendance or participation.
82.32.532 - Digital products—Nexus.
82.32.533 - Digital products—Amnesty.
82.32.534 - Annual report requirement for tax preferences.
82.32.537 - Silicon smelters—Annual survey or report.
82.32.550 - "Commercial airplane," "component," and "superefficient airplane"—Definitions.
82.32.558 - Tax deferral—Eligible projects—Application.
82.32.559 - Tax deferral—Eligible projects—Deposit of funds.
82.32.580 - Sales and use tax deferral—Historic automobile museum.
82.32.590 - Annual tax performance reports—Failure to file.
82.32.600 - Annual tax performance reports—Electronic filing.
82.32.605 - Annual tax performance report—Hog fuel.
82.32.660 - Tax avoidance—Statutory application.
82.32.670 - Tax evasion by electronic means—Seizure and forfeiture.
82.32.680 - Tax evasion by electronic means—Search and seizure.
82.32.700 - Administration of the sales and use tax for hospital benefit zones.
82.32.715 - Monetary allowances—Streamlined sales and use tax agreement.
82.32.720 - Vendor compensation—Streamlined sales and use tax agreement.
82.32.725 - Amnesty—Streamlined sales and use tax agreement.
82.32.730 - Sourcing—Streamlined sales and use tax agreement.
82.32.740 - Taxability matrix—Liability—Streamlined sales and use tax agreement.
82.32.750 - Purchaser liability—Penalty—Streamlined sales and use tax agreement.
82.32.765 - Local revitalization financing—Reporting requirements.
82.32.770 - Sourcing compliance—Taxpayer relief—Collection and remittance errors.
82.32.780 - Reseller's permit—Taxpayer application.
82.32.783 - Reseller's permit—Contractor application.
82.32.784 - Reseller's permit—Information required.
82.32.785 - Reseller's permit—Voluntary electronic verification.
82.32.787 - Reseller's permit—Request for copies.
82.32.805 - Tax preferences—Expiration dates.
82.32.808 - Tax preferences—Performance statement requirement.
82.32.850 - Significant commercial airplane manufacturing—Tax preference—Contingent effective date.
82.32.860 - Liquefied natural gas—Estimated sales tax revenue.
82.32.865 - Nonresident vessel permit.