News from around the industry highlighting firm achivements and current events

Washington Adds Trust Decanting To The Estate Planners Toolbox

May 25, 2017

By: Eric J. Sachtjen

Previous to the enactment of Washington’s decanting statute, estate planners who wanted to modify an otherwise irrevocable trust had to rely upon other methods, such as a Trust and Estate Dispute Resolution Act (“TEDRA”) proceeding, consolidation of trusts, or a written, binding TEDRA agreement. While rules and limitations apply, Washington’s new law, which is effective July 23, 2017, authorizes trustees to amend the provisions of irrevocable trusts or “pour over” the assets of the old trust into a new trust. Paine Hamblen’s Fred Emry worked with two other Washington attorneys for three years on the drafting and passage of the new law.

Washington’s 2017 Estate Tax Exclusion

November 28, 2016

By: Eric J. Sachtjen

The Washington Department of Revenue announced the 2017 Estate Tax Applicable Exclusion Amount is $2,129,000. The Applicable Exclusion Amount is the amount that can pass free of Washington’s estate tax.

The 2017 filing threshold remains at $2,000,000 so decedents with estates above $2,000,000, but below $2,129,000, will still must file Washington estate tax returns.

Washington’s B&O Tax Applies to National Sales and Drop-Ship Sales

November 28, 2016

By: Eric J. Sachtjen

On November 23, 2016, the Washington Supreme Court held Washington’s B&O Tax Applies to National Sales and Drop-Shipped Sales.

Avnet is one of the largest distributor of electrical components and computer products. Avnet has 35 offices in the United States, including one in Redmond, Washington, where 40 employees worked. The Redmond employees performed many functions for Avnet’s Washington customers, including soliciting orders, responding to requests for quotes, receiving orders, and responding to questions, and market intelligence on Washington’s markets to Avnet’s corporate office.

Avnet earned more than $80 million of its gross receipts from “national sales” and “drop-ship sales.” Avnet didn’t pay B&O tax on its national sales or drop-ship sales.

In a “national sale” Avnet would make a wholesale sale to a customer in multiple states, including Washington. The goods would be delivered to the customer’s Washington office, but billed to the customer’s office in another state.

In a “drop-ship sale” Avnet’s out-of-state customer would place a wholesale order and direct Avnet to deliver the good to the ordering customer’s Washington customer.

The Court held the Redmond office was significantly associated with establishing and maintaining the market for its products in Washington. Therefore, Washington’s B&O Tax applied to Avnet’s Washington national sales and drop-shipped sales.

Avnet, Inc. v. Dep’t of Revenue, No 92080-0, 2016 WL 690220 (Wash. Nov. 23, 2016).