Washington Issues Guidance on Termination Fees

Friday, May 22nd, 2015

 
 
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The Washington Department of Revenue released a publication discussing the taxability of termination fees. These fees are taxed the same way as the other payments made under the agreement. For example, early termination fees for cell phone service contracts are subject to tax because telecommunications services are taxable. To the contrary, early termination fees for breaking a real property lease are not taxable, because real property leases are not subject to sales tax.

http://dor.wa.gov/Content/GetAFormOrPublication/PublicationBySubject/TaxTopics/TerminationFees.aspx


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