The Department thwarted AOL's effort by issuing a refund to AOL and successfully moving to dismiss on the basis of mootness (though AOL still had nearly $50 million in outstanding assessments pertaining to the same legal issue) and the fact that the court lacked jurisdiction because there was no longer a refund claim. It then filed another refund suit on December 23, 2008. In a second attempt to reach the merits, AOL filed a return and paid retail sales tax of $5,700 for the June 2008 tax period, which was outside the earlier assessment periods. AOL appealed the dismissal to the Court of Appeals, and it affirmed the trial court's decision. The court accepted the Department's argument that AOL was required to pay all of the first assessment ($19 million) if the amended return related to a part of that assessment period (but not the second assessment of $27 million). On December 13, 2007, the Department successfully moved to dismiss the Superior Court action on the grounds that AOL had failed to satisfy the "pay to play" requirements of Washington law.
In an attempt to get to court without paying the assessments, AOL filed an amended return for the January 2000 tax period, paid $331,377 in retail sales tax and interest related to the amended return, and initiated a lawsuit in Thurston County Superior Court, seeking an order stating that the retail sales tax was not due as well as a refund of the $331,377. In June 2007, AOL recognized that it might need to litigate the legal issue, but still wanted to avoid paying the nearly $50 million to do so. On the same day AOL filed administrative appeals with the Department's Appeals Division. The Washington Department of Revenue (“Department”) had issued two assessments of Washington state retail sales tax, interest and penalties against AOL on December 15, 2006, for the periods 1998 through 20 through Mathat amounted to nearly $50 million. Its goal was subverted in both cases because of a strict "pay to play" requirement. Prior to obtaining relief at the Board of Tax Appeals (“Board”), AOL sought to have the courts address the substantive legal issue in two different lawsuits. The procedural lessons of this case may be as important in Washington tax practice as the substantive case. On May 9, 2012, the Washington State Board of Tax Appeals granted summary judgment to AOL, Inc., holding that AOL's purchases of services permitting its customers to connect with AOL's data center and the Internet were not subject to retail sales tax.
Statement Against Anti-Asian Racism and Hate
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