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Washington Superior Court willing to favor the state in business tax case

Four Washington Supreme Court justices in their oral arguments Tuesday seemed likely to side with the state revenue department’s interpretation of the business and occupation tax investment income deduction.

The justices are reviewing a state appeals court ruling that ruled that 16 investment funds led by Antio LLC are not entitled to take the deduction for “amounts derived from investments.” The appeals court cited the state’s high court’s two-page 1986 ruling in O’Leary v. Department of the Treasury for the proposition that deductible “investments” are incidental to the taxpayer’s business, not the reason the company is in business.

If the appeals court is limited…