Washington Justices Shun Broad Reading of Business Tax Break (1)

The Washington Supreme Court on Thursday upheld the state revenue department’s interpretation of the business and occupation tax investment income deduction.

The legislature didn’t overturn high court precedent when it revised the deduction statute in 2002, so “investments” “continues to mean incidental investment of surplus funds,” Justice Susan Owens wrote for the 7-2 court.

Sixteen investment funds led by Antio LLC asked the justices to review a state appeals court ruling that they can’t take the deduction for “amounts derived from investments.” The appeals court cited the state high court’s two-page 1986 ruling in O’Leary v. Department of Revenue for ...