Paymaster Services for Affiliates

From the 2024 DOR Tax Exemption Study

Det. No. 16-0094, 35 WTD 557 (December 1, 2016) 560 Important Notice: . . . This Team Member Handbook represents the policies for [Taxpayer] and its subsidiaries, affiliates and related companies. Rather than use all company names throughout this handbook, you are notified that any reference to “the Company” or [“Taxpayer”] refers also to . . . [WA LLC], and any other affiliate or subsidiary of [Taxpayer]. Your employment is with the specific LLC, which is a subsidiary of [Taxpayer]. Each subsidiary is a separate legal entity. Utilization by the Company of a common handbook and a single payroll system does not change the fact that each [Taxpayer] restaurant is separately structured and operated. (Emphasis added.) ANALYSIS Washington imposes the B&O tax on every person for the act or privilege of engaging in business activities in Washington. RCW 82.04.220. “[T]he legislative purpose behind the B&O tax scheme is to tax virtually all business activity in the state.” Impecoven v. Department of Rev., 120 Wn.2d 357, 841 P.2d 752 (1992). The tax is measured by applying particular rates against the value of products, gross proceeds of sale, or gross income of the business, as the case may