Antio Decision
The recent Antio Decision by the Washington Supreme Court threatened to narrow the state’s Business & Occupation (B&O) tax deduction for investment income, posing new risks for private and independent K–12 schools. Institutions that rely on ancillary investment gains, such as returns from endowments, trusts, or pooled investment vehicles, were concerned they would face unexpected tax liabilities despite previous guidance suggesting eligibility for deductions. However, the legislature worked hard to pass HB 2081, which grants a broad-based investment income B&O tax deduction for nonprofits.
Sales Tax Expansion
A bill waiting to be signed by the Governor has concerned schools and CPAs. ESSB 5814 expands sales tax to several services previously not subject to tax. The language is written broadly, so the concern was that it could be interpreted to expand sales tax to school tuition.
WFIS confirmed with the Department of Revenue that they will be issuing guidance that clarifies that “live presentations” in ESSB 5814 do not include a public or private elementary or secondary school; or an institution of higher education as defined in sections 1001 or 1002 of the federal higher education act of 1965 (Title 20 U.S.C. Secs. 1001 and 1002), as existing on July 1, 2009. For purposes of this subsection (3)(b)(ix)(B), an online educational program must be encompassed within the institution’s accreditation.
