The Washington Court of Appeals held that a Honda automobile dealership was subject to state business and occupation (B&O) tax on more than $1 million in “dealer cash” payments the dealership received over a four-year span from manufacturer American Honda as part of an incentive program. The court dismissed two arguments the dealership presented in an attempt to obtain a tax refund. First, the court concluded that the dealership participated in a taxable “business activity” discrete from the dealership’s normal business of selling cars at retail by accepting American Honda’s offer to apply for dealer cash, selling particular models during specific times, documenting those sales, applying to the manufacturer for dealer cash, and then accepting payment of the dealer cash from American Honda. Second, the court held that dealer cash was not a tax-exempt rebate, adjustment or discount, because the dealership’s purchases of vehicles from American Honda were not made “subject to” the dealer cash payment. This opinion follows and upholds previous decisions on this issue against the dealership taxpayer by the Board of Tax Appeals and the Thurston Superior Court. Steven Klein Inc. v. State of Washington, Dep’t of Revenue, 336 P.3d 663 (Wash. Ct. App. 2014).