John H. Sellen Constr. Co. v. Department of Revenue
In John H. Sellen Constr. Co. v. Department of Revenue, 87 Wn.2d 878, 558 P.2d 1342 (1976), the taxpayers each invested a portion of their gross income in short-term investments that yielded income.
The Department of Revenue took the position that these taxpayers owed B&O tax on the investment income. The taxpayers disagreed with the Department's position, contending that any investment income they earned was deductible from their gross income for purposes of computing the B&O tax.
The Court agreed with the taxpayers, concluding that they were not "financial businesses" and that, as a consequence, the investment income earned by them, which represented only a small percentage of their gross revenues, was not subject to the B&O tax.
The Court said:
If we adopt appellant's interpretation of RCW 82.04.430(1), then few taxpayers, if any, making incidental investments of surplus funds could receive the deduction. Appellant equates investing any income with being a financial business and, in effect, this renders the statute a nullity. By interpretation we should not nullify any portion of the statute. Sellen, 87 Wn.2d at 883.