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New Nexus Standards for Wholesale and Retail Sales - Effective Sept. 1, 2015

New Economic Nexus Standard – Wholesale Sales

Effective Sept. 1, 2015, economic nexus standards apply to businesses making wholesale sales taxable under RCW 82.04.257(1) or 82.04.270. This means that most out-of-state businesses making wholesale sales into Washington will be subject to the wholesaling business and occupation (B&O) tax on wholesale sales into this state for the current year if they meet any of the following economic nexus thresholds during the prior calendar year:

  • More than $267,000 of gross income in Washington
  • More than $53,000 of payroll in Washington
  • More than $53,000 of property in Washington
  • At least 25 percent of total property, payroll, or income in Washington

These thresholds are adjusted periodically based on changes to the Consumer Price Index for all urban consumers.

Economic Nexus - Apportionable Income - Two Important Dates

Effective June 1, 2010, an “economic nexus” standard rather than a “physical presence” standard was created with regard to certain activities. It requires some businesses earning “apportionable income” (including activities subject to the service and other activities and royalty B&O tax classifications) from Washington customers to be subject to taxes whether or not they maintain offices in the state or have any physical presence. See Economic Nexus for more information.

Effective September 1, 2015, the economic nexus standard is extended to business engaging in wholesaling activity. Additionally, the time frame for determining whether a business has exceeded any of the economic nexus thresholds changes from the current tax year to the immediately preceding tax year. Part II of ESSB 6138.

See this page for more information on the new economic nexus standard for wholesale sales and for information on the new Click-through nexus provision for retail sales.


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