A national title insurer figured that moving its work out of state moved its tax bill too. Washington's appeals court just said otherwise.
On July 14, 2026, the Washington Court of Appeals reversed a trial court and sided with the state's Department of Revenue in a long-running dispute over how title insurance and escrow sales get taxed. The takeaway for insurers is blunt: where you process the work doesn't decide where the sale is taxed. Where the property sits does.
Chicago Title Insurance Company runs a national title insurance and escrow business built around the sale or refinancing of real property. For years the work happened at local branch offices, in person, because the property records it needed were kept at the county level. Then technology changed the model. Tapping electronic databases, the company began running its "Direct" operations remotely through two out-of-state divisions - ServiceLink in Pennsylvania and Fidelity National Agency Solutions in Texas, with offices in California and New Jersey. Neither has an office in Washington.
Beginning in 2010, Chicago Title moved its non-commercial Direct operations into affiliated agencies, a shift substantially completed in Washington by July 2011. Its reported Washington income then dropped, hitting zero in 2012. A company vice president later testified that Chicago Title "chose not to collect and remit sales tax on its sales of title insurance and escrow services to Washington property owners" during the audit years because "[n]one of the work was being prepared in Washington."
The Department read it differently. In 2015 it audited the company for 2009 through 2012 and assessed $8,310,134 in unpaid retail sales, business and occupation, and use taxes, plus penalties and interest. Chicago Title said it took in $104,498,075 from Direct operations tied to Washington property over that period. The company paid, then sued - and in 2024 a trial court sided with it and ordered a refund of $10,909,764.10.
The appeals court undid that. Under Washington's sourcing statute, a sale ties to the seller's business location only when the buyer receives the service there in person. No buyer ever set foot in the out-of-state offices. So the court asked where buyers made "first use" of the service, and answered: where the property is - Washington.
The judges sent the case back to the trial court, where a separate math question they declined to settle still waits. For title insurers running remote, multistate operations, the lesson lands fast: reshuffling the back office won't shift the tax situs away from the property's home state.
