A Washington Superior Court held that using leased specialized railroad cars to transport products in Washington did not rise to the level of “substantial nexus.” The taxpayer, a California company, sold food products into the state by transferring its products into specially leased railroad cars that traveled to Washington. The Washington Board of Tax Appeals overturned the Department of Revenue’s business and occupation (B&O) tax assessment against the taxpayer, determining that the taxpayer lacked the substantial nexus with the state required to impose tax. On appeal, the Superior Court recognized that a taxpayer must take action to establish and maintain a market in the state in order to create nexus. The court held that the use of the leased railroad cars in the state was not sufficient to create nexus, particularly in this case where there was no evidence that the taxpayer was attempting to maintain a business in Washington. Dep’t of Revenue v. Sage V Foods, LLC, Dkt. No. 12-2-01893-3 (Wash. Super. Ct. 2013), nonprecedential order.