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IN THE SUPREME COURT OF THE STATE OF WASHINGTON RICHARD and ANNETTE BOWIE d/b/a VAL-PAK OF WESTERN WASHINGTON, et al., Petitioners, v. WASHINGTON DEPARTMENT OF REVENUE, Respondent.

No. 83426-1 En Banc Filed February 10, 2011

J.M. JOHNSON, J.-- Petitioners Richard and Annette Bowie, d/b/a Val-Pak of Western Washington et al. comprise eight franchisees of Val-Pak Direct Marketing Systems Inc. (VPDMS), a Delaware corporation, with its principal place of business in Largo, Florida. Petitioners solicit

advertisements and perform tasks related to their ultimate inclusion in blue "Val-Pak Envelopes," which are distributed in Western Washington by

Bowie v. Dep't of Revenue, No. 83426-1

VPDMS. Petitioners are subject to Washington's business and occupation (B&O) tax statute, chapter 82.04 RCW, but contest the applicable tax rate during the period of 1998-2006. If Val-Pak Envelopes qualify as a

"periodical or magazine" as defined in RCW 82.04.280,1 the applicable tax rate would be 0.484 percent. Otherwise, the applicable tax rate is 1.5 percent under the "catchall" rate of RCW 82.04.290(2)2 because petitioners' business
1

The statutory language of RCW 82.04.280 in effect from 1998-2006 controls here. The statute during that period reads, in pertinent part, as follows: Upon every person engaging within this state in the business of: (1) Printing, and of publishing newspapers, periodicals, or magazines . . . the amount of tax on such business shall be equal to the gross income of the business multiplied by the rate of 0.484 percent. . . . .... As used in this section, "periodical or magazine" means a printed publication, other than a newspaper, issued regularly at stated intervals at least once every three months, including any supplement or special edition of the publication. Former RCW 82.04.280 (1998) (Laws of 1998, ch. 343,

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Washington Law