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The economic nexus standard applies only to apportionable income, which includes income derived from various service activities and royalty income. Under the new economic nexus standards, new apportionment method uses only the sales factor for these businesses

Single-factor apportionment

A single-factor apportionment formula based on sales is adopted for apportionable income. Taxable income is determined by multiplying a taxpayer’s apportionable income times the receipts factor.

The receipts factor is a fraction:

  • The numerator is the total gross apportionable Washington income during the tax year.
  • The denominator is the total gross apportionable worldwide income during the tax year.


Washington income
(Worldwide income) – (Throwout income)

Throwout Income

Gross income from engaging in an apportionable activity is excluded from the denominator of the receipts factor if both:

  1. the income is sourced to a state where the taxpayer is not subject to tax or the taxpayer does not have nexus and
  2. at least some of the activity is performed in Washington.

Reconciling your apportionable income

Once a taxpayer has the information necessary to determine the receipts factor for an entire calendar year, it must file a reconciliation and either obtain a refund or pay any additional tax due. The reconciliation is due by October 31st of the following year. A reconciliation can be filed electronically through your My Account home page.

  1. Sign into My Account.
  2. On the left hand navigation bar select File a return.
  3. Click on Reconciliation of Apportionable Income.

If you are unable to complete the online form, you may complete the paper form.

What is apportionable income?

Apportionable income is earned from engaging in the following activities:

  • Service and other activities,
  • Royalties,
  • Travel agents and tour operators,
  • International steamship agent, international customs house broker, international freight forwarder, vessel and/or cargo charter broker in foreign commerce, and/or international air cargo agent,
  • Stevedoring and associated activities,
  • Disposing of low-level waste,
  • Insurance producers, title insurance agents, or surplus line brokers,
  • Public or nonprofit hospitals,
  • Real estate brokers,
  • Research and development performed by nonprofit corporations or associations,
  • Inspecting, testing, labeling, and storing canned salmon owned by another person,
  • Representing and performing services for fire or casualty insurance companies as an independent resident managing general agent licensed under the provisions chapter 48.17 RCW,
  • Contests of chance,
  • Horse races,
  • International investment management services,
  • Aerospace product development,
  • Printing or publishing a newspaper (but only with respect to advertising income),
  • Printing materials other than newspapers and publishing periodicals or magazines (but only with respect to advertising income), and
  • Cleaning up radioactive waste and other by-products of weapons production and nuclear research and development, but only with respect to activities that would be taxable as an “apportionable activity” if this special tax classification did not exist.