More information is available here.Washington State Property Taxes Photo credit: ©/wwing “’Affiliate’ means a person that directly or indirectly controls, is controlled by, or is under common control with another person.” “’Control’ means the direct or indirect possession of more than 50% 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.” Furthermore, the definition excludes entities that are primarily engaged in: the provision of commercial mobile services the operation and provision of access to transmission facilities and infrastructure that the person owns or leases for the transmission of voice, data, text, sound, and video using wired telecommunications networks or business as financial institutions.ġ3 The Washington State Department of Revenue will work with businesses that cannot file or pay their taxes on time due to the COVID- 19 outbreak. ““Affiliate” means a person that directly or indirectly controls, is controlled by, or is under common control with another person.” ““Control” means the direct or indirect possession of more than 80% 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.”ĩ S.B. The workforce education investment surcharge was formerly adopted in House Bill 2158, which is accessible here.Ĥ S.B. A copy of the adopted law is accessible here.Ģ See Laws 2019, ch. 14 Additionally, if the Washington State Department of Revenue establishes by clear, cogent, and convincing evidence that one or more members of the affiliated group intended to evade the surcharge, it has the right to assess against that member or all members of that affiliated group a penalty equal to 50% of the amount of the total surcharge payable. 13 Failure to report or pay the tax or surcharge may result in the assessment of a late payment penalty of up to 29% and a substantial underpayment penalty of 5%. 12 The first quarterly return is due on July 31, 2020. The Workforce Education Investment Surcharge must be reported and paid on a quarterly basis. Also, affiliated businesses with members engaging in advanced computing activities should consider whether they are subject to the Workforce Education Investment Surcharge of 1.22% if they have more than $25 billion in worldwide gross revenue. 11īusinesses that have historically reported gross receipts under the Service and Other Activities classification and have gross income in excess of $1 million in 2019 should be aware that they may be subject to the increased tax rate of 1.75%. The maximum amount of the surcharge paid by all members of an affiliated group is $9 million annually. 10 Because companies subject to the surcharge also remain subject to the 1.5% tax on receipts from Service and Other Activities, affected taxpayers will be subject to an effective tax rate of 2.72%. The surcharge is equal to the gross income of the business that is subject to the Service and Other Activities B&O tax, multiplied by a rate of 1.22%. 6492 defines “advanced computing” as “designing or developing computer software or computer hardware, whether directly or contracting with another person, including modifications to computer software or computer hardware, cloud computing services, or operating an online marketplace, an online search engine, or online social networking platform.” 8 A “select advanced computing business” means a person who is a member of an affiliated group with at least one member engaged in the business of advanced computing and the affiliated group has worldwide gross revenue of more than $25 billion during the immediately preceding calendar year. 6492 imposes the Workforce Education Investment Surcharge on select advanced computing businesses. Eliminates the workforce education investment surcharge for most taxpayers except certain advanced computing businesses
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