DOR Update - May 9, 2012

While we had a win against retail sales tax, the Washington State Department of Revenue (DOR) did not find in our favor regarding fishing tournaments being a contest of chance, and issued a determination that fishing tournaments cannot take the "prize and cash payout" deduction when filing their state taxes. 

Contest of Chance is defined as "Any contests.... in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor in the outcome."  Sounds like fishing to me!

This determination contradicts conversations we had with the DOR prior to filing our initial B&O taxes in 2004.  In addition, the case has become an extremely high profile case within the DOR, receiving attention at the executive level within the department.

As we still strongly believe their determination is incorrect, and  that this determination could have far reaching implications within the State of Washington for all fishing tournaments (whether bass, walleye or salmon; large events or small; for profit or not for profit) we have filed yet another appeal with the DOR.  As always, we will keep you posted on our progress.

Thank you again for all your support!  We truly appreciative that we have such a fantastic group of anglers!!!

Good News for All (previously posted)

You may have heard the rumors, now here are the facts.  In December, the Washington State Department of Revenue issued a letter stating that Northwest Bass Events (and for that matter, ALL fishing tournaments) did not fall under the tax classification of “services and other activities,” but were instead “retail sales.”  Imagine our surprise, and the surprise of everyone we spoke with in the industry!  Needless to say, we disagreed with the DOR and have spent the last several months appealing their decision… and the $60,000.00 plus bill for back retail sales tax.  Should our appeal fail every organization that conducts fishing tournaments, big or small, for profit or non-profit, would be required to collect and pay retail sales tax.  For an industry that operates on a very narrow margin, paying out nearly 90% of income directly back to the anglers, this would be devastating! 

Fortunately for Northwest Bass and all fishing tournaments in the State of Washington and around the country, our sleepless nights and  determination, aided by a realistic administrative law judge and a knowledgeable (albeit very expensive) lawyer, insured that sanity won out over the ridiculous, and the DOR has verbally agreed that fishing tournaments do NOT qualify as “retail sales.”  The season is on!!!  The DOR is still “debating” internally as to where exactly we fall under the classification of “services and other activities” and the status of our current deduction for “cash and prize payouts,” but the biggest potential devastation has been averted.  In the coming weeks, I will provide you a detailed account of our efforts, as well as the final outcome.  For now, all of us, be it the small club, a private organization running an open event, a circuit or yes, even salmon derbies, can rest easy.  No new taxes!  (Please note that I did not say Read My Lips).