United States: Washington Tax Decision on Video Production Services, Not Digital Goods

Washington’s Division held that an affiliate’s filming, recording, and production of television programming for its parent company was not the sale of digital goods.
The content was treated as a professional service in electronic form because it primarily involved human effort performed after the parent requested the service.
As a result, the receipts were subject to Washington’s service and other activities B&O tax, not the lower-rate retailing B&O tax.
The Department’s audit adjustments were sustained, including reversal of small business credits and assessed penalties/interest; the taxpayer’s reconsideration request was denied.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.