Affiliate Creates Nexus for Out-of-State Mail-Order Retailer

SEATTLE, Feb. 13, 2012 /PRNewswire/ -- The Washington Department of Revenue ("Department") determined that an out-of-state retailer ("Retailer") is required to collect use tax based on the activities of an in-state affiliate of the retailer. [Wash. Dept. of Rev., Decision Det. No. 10–0057 (2/20/11)].

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The Retailer, one of four wholly-owned subsidiaries, operates a mail-order catalog business outside Washington State and has no offices, employees, or inventory in Washington. One of the Retailer's sister corporations ("Affiliate Corporation") operates retail stores in Washington and carries the same type of merchandise as the Retailer.

The Affiliate Corporation purchases and distributes the Retailer's catalogs in Washington stores. In addition, the Affiliate Corporation sells the Retailer's gift cards and accepts returns of certain items purchased from the Retailer.

Due to the aggregate and substantial nature of the activities performed by the Affiliate Corporation, the Retailer has substantial nexus in Washington and is responsible for Business and Occupation Tax and Retail Sales and Use Tax.

About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect tax practice in North America and the seventh largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. In 2010, Ryan received the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 900 professionals and associates serves over 6,500 clients in 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.

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