Use tax on rental value

From the 2024 DOR Tax Exemption Study

Det. No. 00-210, 20 WTD 316 (2001) 318 Taxpayers object to Audit’s recomputation of taxable rent. Taxpayers argue that the $1/mo. rent paid to the Port for the residence and property was the “maximum attainable” based on information contained in the public record. Taxpayers simply state that they would not have sold their property to the Port if they had to pay a higher rent. Consequently, Taxpayers contend that their negotiated rent meets the safe-harbor provisions contained in RCW 82.29A.020 and that their $1 per month contract rent is the appropriate taxable rent. Taxpayers submitted a letter from Port officials supporting their position that $1 per month was the maximum rent obtainable under the circumstances. In the alternative, Taxpayers argue that the monthly rent computed by Audit is more than the fair market rent of other similar residential properties located in the vicinity. Taxpayers estimated that the fair market rental value of their house at the time they negotiated the sale and leaseback arrangement was approximately $800 per month. Taxpayers stated that they examined local rental rates contained in newspapers and other publications at the time and utilized that num