[WSBAPT] B&O Tax on ERISA Plans and Trusts?

[msilver at wolfenet.com]

Hi John,  let me know, please, pretty please, where you come out on this.
And what is the rate, service and other?  

 

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>
On Behalf Of John J. Sullivan, Esq.
Sent: Thursday, January 19, 2023 8:44 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] B&O Tax on ERISA Plans and Trusts?

 

I wonder if anyone has had experience recently with the DOR asserting that
contributions to and earnings of ERISA regulated benefit (and retirement
plans) are subject to B&O tax because SCOTUS jurisprudence no longer takes
the position that ERISA preempts it from taxing such plans? I had a case
that goes back almost seven years that we finally settled, but the DOR has
just notified the public of their revocation of the old WTD from the 1990's
regarding ERISA preemption. My case did not involve a retirement or 401(k)
plan. As we pointed out in the course of the negotiations, revocation
exposes every pension, retirement, profit-sharing and benefit plan in the
state to B&O tax at the "Service & Other" rate on all contributions and
earnings of the plan/trust. We argued this would depress the ability to
provide the benefits the plans are intended to provide. 

 

Just curious whether the DOR is finally testing the waters with this newly
discovered power.  

 

"Det. 91-309, 11 WTD 497 (1992). Based on authority at that time, The 

determination concluded that the Employee Retirement Income Security Act 

(ERISA) broadly preempted Washington's ability to impose the business and 

occupation tax on any contributions to, distributions from, and investment
income 

generated by ERISA qualified plans. Since the WTD was published, case law
has more narrowly construed ERISA preemption provisions. The Department
finds that ERISA does not preempt a law of general application like
Washington's B&O tax from applying to welfare benefit plans. ERISA may
continue to pre-empt ERISA pension plans." 

 

 
<https://dor.wa.gov/sites/default/files/2022-07/ETA3133.2022_FINAL.pdf?uid=6
3c6dddd36ef4>
https://dor.wa.gov/sites/default/files/2022-07/ETA3133.2022_FINAL.pdf?uid=63
c6dddd36ef4 

 

Best regards, 

John J. Sullivan 

Attorney 

 

Lyons | Sullivan 

10655 NE 4th Street, Suite 704 

Bellevue, WA  98004 

425.451.2400 tel 425-451-7385 fax 

 <http://www.dljslaw.com/> www.dljslaw.com 

 

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