State tells court installation and related work predominate; cites invoices and bill-of-materials

Assistant Attorney General David Moon argued for the Washington State Department of Revenue that when a taxpayer performs installation, services directly related to that installation are treated as installation activity under the RCW language cited in argument. Moon told the court the invoices and RFP language reflect an on‑premises installed system the Port sought and that the payment schedule and bill of materials show installation and related items together constitute the dominant activity.

Moon summarized the Department’s position succinctly: “Installation services are subject to retail sales tax. And that includes not only the installation itself, but also any services that taxpayer performs that are directly related to the installation.” He pointed to the contract’s payment schedule, saying field-installation work accounted for roughly 40% of the contract’s dollar amount and that the bill of materials lists a roughly $988,000 D3 line for field device installation. Moon argued that, under the statute and legislative findings discussed in briefing, such a design-build framing typically yields installation as the predominant activity.