WA: Legal Roundup Division II
The Department appealed the trial court’s summary judgment in favor of the public utility districts (Clark County and Grays Harbor) wherein the trial court granted refunds (for three of the five years requested) to the public utility districts for privilege taxes assessed.
Both Clark County and Grays Harbor received revenue from basic service charges imposed. The Department assessed the privilege tax (under RCW 54.28.020(1)(a)).
The Court of Appeals applied chapter 54.28 of the RCWs and looked only to the statute’s plain words as the parties agreed the statute is unambiguous. The RCW in question declares “gross revenue” as a privilege tax imposed and thus the question surrounding this case is whether the revenue collected from the basic service charges are considered gross revenue.
The Court held, when looking at the plain language of the statute, that the language does not support a finding that the service charges encompass “gross revenue.” The Court found that "gross revenue” under RCW 54.28.020 includes revenues “derived … from the sale of electric energy distributed to consumers,” wherein the basic service charges were not from the sale of electric energy.
The appellate court affirmed the trial court’s ruling that only 3 of the 5 years were to be reimbursed, stating that, “the trial court had proper subject matter jurisdiction and it did not err when it applied a three-year statute of limitation.”