Walthew v. Department of Revenue

This case was heard on direct appeal under RAP 4.2. The Department of Revenue appeals the trial court's decision that the Walthew firm (taxpayer) is not required to pay the state business and occupation tax on client reimbursements for payments made by the taxpayer to court reporters, physicians, and process servers. The issue before the court is one of statutory interpretation. Does the definition of gross income under RCW 82.04.080 include client reimbursements to lawyers on advances made to third party providers, when the lawyer is acting as agent *185for the client, and the client remains…