HomeMy WebLinkAbout05-20-2021 - Lane Powells email attachment - Appellant TracFone's Hearing Brief.pdf1
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125110.0002/8454497.1
APPELLANT TRACFONE’S
HEARING BRIEF - 1 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON
RE: TracFone Wireless, Inc. Administrative Appeal
APPELLANT TRACFONE’S HEARING BRIEF
On March 12, 2021, the Hearing Examiner issued an order granting the City’s Motion
for Partial Summary Judgment and denying TracFone’s Motion for Summary Judgment. The
City’s motion for summary judgment specifically reserved for hearing issues related to the
audit performed by the City’s contract auditor Tax Recover Services (“TRS”), as well as issues
relating to the amount of telephone utility tax, penalty, and interest due to the City. City’s
Motion for Partial Summary Judgment at 2.
The Hearing Examiner’s ruling on summary judgment held that TracFone is engaged
in the telephone business as defined by RCW 82.16.010 and, therefore, subject to Renton utility
tax on 100% of its gross income including income from sales of handsets. On April 19, 2021,
the Hearing Examiner granted TracFone’s Motion for Reconsideration of his Summary
Judgment Ruling by removing from the ruling any finding that proceeds from the sale of
handsets are subject to the utility tax under RCW 35A.82.060. While TracFone respectfully
disagrees with the Hearing Examiner’s rulings on the other issues in its summary judgment
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125110.0002/8454497.1
APPELLANT TRACFONE’S
HEARING BRIEF - 2 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
motion, it will focus its presentation at the hearing on the measure of Renton utility tax,
including errors in the methodology and calculation of the assessment, interest and penalties
prepared by the City’s outside auditor, TRS, and issued by the City. As a condition to pursuing
this appeal, TracFone was required to pay the assessment of $336,442.69, consisting of
$147,108.72 in the principal tax amount, $152,556.67 in interest and $36,777.30 in penalties.
The amount assessed was incorrectly calculated. Days after the Hearing Examiner issued its
ruling on summary judgment, TRS wrote to counsel for TracFone and the City stating that it
had made errors in the calculation of the assessment and submitted a recalculation of the
assessment which it represented had been approved by the City and that TracFone is owed a
refund for the overpayment. TracFone contends that TRS’ re-calculation also is incorrect and
will demonstrate at the hearing that the overpayment is greater than what TRS and the City are
contending.
DATED: May 20, 2021
LANE POWELL PC
By Scott M. Edwards, WSBA No. 26455 edwardss@lanepowell.com Grant S. Degginger, WSBA No. 15261 deggingerg@lanepowell.com Attorneys for TracFone Wireless, Inc.
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125110.0002/8454497.1
APPELLANT TRACFONE’S
HEARING BRIEF - 3 LANE POWELL PC
1420 FIFTH AVENUE, SUITE 4200
P.O. BOX 91302
SEATTLE, WA 98111-9402
206.223.7000 FAX: 206.223.7107
CERTIFICATE OF SERVICE
I hereby certify under penalty of perjury of the laws of the State of Washington and the
United States that, on the date listed below, I caused to be served a copy of the attached
document to the following persons via electronic mail:
Kari L. Sand Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue, Suite 3500 Seattle, WA 98164 ksand@omwlaw.com Cynthia Moya Renton City Clerk 1055 So. Grady Way Renton, WA 98057 cmoya@rentonwa.gov olbrechtslaw@gmail.com
Executed on the 20th day of May, 2021, at Seattle, Washington.
s/ Norma Tsuboi Norma Tsuboi, Legal Assistant