Ryan, LLC Reports Washington Supreme Court Denies Review of B&O Tax Assessment on Intercompany Transfers

SEATTLE, May 4, 2012 /PRNewswire/ -- The Washington Supreme Court denied a petition for review of Getty Images, Inc. v. Seattle, which held that the City of Seattle had properly assessed Business and Occupation (B&O) tax on intercompany fund transfers.

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Getty Management, a California-based subsidiary of Getty Seattle, contracted to provide administrative and management services for related companies. Getty Seattle entered into an agreement with Getty Management to provide the services, in exchange for $1 million per year. Getty Seattle's costs to perform the services exceeded $1 million, and Getty Seattle used funds from a common concentration account of the Getty Images companies to cover its costs. Getty Seattle booked the transferred funds as payables to Getty Management, and Getty Management included the amounts in its income. Getty Seattle reported and paid B&O tax only on the $1 million but not on the funds transferred to cover costs.

The Washington Court of Appeals held that regardless of the fixed-price of the administrative services agreement between Getty Management and Getty Seattle, the transferred funds were considered gross income and upheld the City of Seattle's assessment of additional B&O tax.

SOURCE Ryan, LLC

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