Washington Justices Consider Sales Tax on Free Mobile Service

Several justices of the Washington Supreme Court struggled at oral argument Thursday to understand the contours of a federal program to provide wireless service to low-income consumers and whether it should be subject to sales tax.

Assurance Wireless USA LP argues it’s entitled to the sales tax portion of a $3.9 million tax bill it paid the state on funds it received for participating in the Federal Communication Commission’s Lifeline program. The company, formerly known as Virgin Mobile, wants the high court to review an appeals court ruling that those funds constitute taxable sales.

Assurance’s attorney, Eric Tresh of Eversheds ...