{"id":86100,"date":"2025-02-13T16:59:24","date_gmt":"2025-02-13T16:59:24","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/washington-court-ruling-tightens-restrictions-on-investment-income-deductions\/"},"modified":"2025-02-13T16:59:24","modified_gmt":"2025-02-13T16:59:24","slug":"washington-court-ruling-tightens-restrictions-on-investment-income-deductions","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=86100","title":{"rendered":"Washington Court Ruling Tightens Restrictions on Investment Income Deductions"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>Today, the Washington Supreme Court ruled in favor of the Department of Revenue in Antio LLC v. Department of Revenue regarding its interpretation of the deduction for investment income. Specifically, the court upheld the appeal court\u2019s ruling that a group of investment funds organized as limited liability companies (LLCs) could not deduct \u201camounts derived from investments\u201d when calculating their business and occupation (B&amp;O) taxes.<\/p>\n<p>In its ruling, the court adopted the definition of \u201cinvestments\u201d from the Washington Supreme Court\u2019s earlier decision in O\u2019Leary v. Department of Revenue. This definition restricts \u201cinvestments\u201d to those that are incidental to the primary purpose of the taxpayer\u2019s business. Consequently, the court determined that the LLCs were ineligible for the deduction, as their investment income constituted 100% of their gross income, rather than being incidental.<\/p>\n<p>Many companies have been deducting or excluding investment income from their taxable receipts in Washington under the Rev. Code of Wash. 82.04.4281. With this recent ruling, companies should review their investment income to see if it surpasses the court\u2019s definition of \u201cincidental,\u201d which is set at 5% of total gross receipts.<\/p>\n<p>If a company finds that its investment income exceeded this threshold at any time over the last four years, it should evaluate its method of attribution and consider whether this income should be sourced to Washington. Typically, investment income would be attributed to the company\u2019s primary place of business. However, even if that location is outside Washington, there are instances where the Department has applied methods to attribute income back to Washington.<\/p>\n<p>At Perkins, we are committed to staying abreast of the evolving tax landscape to assist you in making informed decisions for your business, whether it be accurately sourcing your income or determining the primary location of your operations. For further information or assistance in managing these transitions, please contact our state and local tax (SALT) Shareholder, <a href=\"https:\/\/perkinsaccounting.com\/leadership\/sonjia-barker\/\" target=\"_blank\" rel=\"noopener\">Sonjia Barker<\/a>, or your <a href=\"https:\/\/perkinsaccounting.com\/leadership\/\" target=\"_blank\" rel=\"noopener\">Perkins advisor<\/a>.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Today, the Washington Supreme Court ruled in favor of the Department of Revenue in Antio LLC v. Department of Revenue regarding its interpretation of the deduction for investment income. Specifically, the court upheld the appeal court\u2019s ruling that a group of investment funds organized as limited liability companies (LLCs) could not deduct \u201camounts derived from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":86101,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11759],"tags":[12843,42322,42323,907,410,19643,42324,10975,10910,42325,42326,1820,17298,18484,4005,33259,33260,42327,7356,19353,19354,12645,14139],"dealstore":[],"offerexpiration":[],"class_list":["post-86100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-accounting","tag-antio-llc","tag-bo","tag-business","tag-court","tag-deductions","tag-department-of-revenue","tag-income","tag-investment","tag-investment-income","tag-investment-income-deduction","tag-news","tag-restrictions","tag-ruling","tag-salt","tag-small-businesses","tag-state-and-local-tax","tag-supreme-court-ruling","tag-tax","tag-tax-update","tag-tax-updates","tag-tightens","tag-washington"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Washington Court Ruling Tightens Restrictions on Investment Income Deductions - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=86100\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Washington Court Ruling Tightens Restrictions on Investment Income Deductions - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Today, the Washington Supreme Court ruled in favor of the Department of Revenue in Antio LLC v. 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