Assets used in a trade or business to the extent those assets are depreciable

From the 2024 DOR Tax Exemption Study

Det. No. 12-0191, 32 WTD 188 (September 9, 2013) 190 ANALYSIS The Washington Business and Occupation (B&O) tax is broadly defined as including all activities engaged in with the object of gain, or benefit, to the taxpayer. RCW 82.04.220. RCW 82.04.140. RCW 82.04.290 states that persons engaged in any business activity, other than or in addition to those for which a specific rate is provided in Chapter 82.04 RCW, are taxable under the service and other activities tax classification. For income taxable under the service and other activities classification, the tax is levied on the gross income of the business. Id. "Gross income of the business" means: the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, . . . gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest, discount, rents, royalties, . . . . RCW 82.04.080. (Emphasis added) In Washington, there are two different tax treatments of IFQs depending on whether they are leased or sold. Income from the outright sale of an IFQ, as occurred here, is considered the sale of an intangible asset under the RCW 82.04.290 service and