Players & teams

Player fees based on ticket sales

Players may receive compensation tied to ticket sales, public appearances, or participation in events related to a match or promotional activity.

Reporting requirements

When a player or the player’s business entity receives compensation for services performed in Washington, the income is generally subject to Service and Other Activities business and occupation (B&O) tax.

How is service income attributed?

Generally, service income is attributed to Washington based on where the customer receives the benefit of the service. If the business can reasonably determine the amount of a specific benefit received in Washington, it must attribute that receipt to Washington. If the business is unable to attribute the service income based on where the customer receives the benefit of the service, see the series of steps for attributing income on the Attributing service income page.

References

• RCW 82.04.067 – Substantial nexus—Engaging in business.
• RCW 82.04.290 – Tax on service and other activities.
• RCW 82.04.460 – Apportionable income—Taxable in Washington and another state.
• RCW 82.04.462 – Apportionable income.
• WAC 458-20-19401 – Minimum nexus thresholds for apportionable activities and selling activities.
• WAC 458-20-19402 – Single factor receipts apportionment.
• WAC 458-20-224 – Service and other business activities.

Player salary and compensation

Players may receive wages, bonuses, or other compensation from their team or governing organization.

Reporting requirements

Wages paid to employees are not subject to B&O tax. However, if compensation is paid to a business entity (for example, a personal services company representing the player), that entity may be subject to Service and Other Activities B&O tax on income earned for services performed in Washington.

How is service income attributed?

Generally, service income is attributed to Washington based on where the customer receives the benefit of the service. If the business can reasonably determine the amount of a specific benefit received in Washington, it must attribute that receipt to Washington.

If the business is unable to attribute the service income to the location where the customer receives the benefit of the service, see the series of steps for attributing income on the Attributing service income page.

References

• RCW 82.04.067 – Substantial nexus—Engaging in business.
• RCW 82.04.290 – Tax on service and other activities.
• RCW 82.04.460 – Apportionable income—Taxable in Washington and another state.
• RCW 82.04.462 – Apportionable income.
• WAC 458-20-19401 – Minimum nexus thresholds for apportionable activities and selling activities.
• WAC 458-20-19402 – Single factor receipts apportionment.
• WAC 458-20-224 – Service and other business activities.

Team fees for participating in tournaments

Teams or governing organizations may receive payments for participation in tournaments, competitions, or related promotional events.

Reporting requirements

Compensation received for participating in tournaments in Washington is generally subject to Service and Other Activities B&O tax.

How is service income attributed?

Generally, service income is attributed to Washington based on where the customer receives the benefit of the service If the business can reasonably determine the amount of a specific benefit received in Washington, it must attribute that receipt to Washington.

If the business is unable to attribute the service income to the location where the customer receives the benefit of the service, see the series of steps for attributing income on the Attributing service income page.

References

• RCW 82.04.067 – Substantial nexus—Engaging in business.
• RCW 82.04.290 – Tax on service and other activities.
• RCW 82.04.460 – Apportionable income—Taxable in Washington and another state.
• RCW 82.04.462 – Apportionable income.
• WAC 458-20-19401 – Minimum nexus thresholds for apportionable activities and selling activities.
• WAC 458-20-19402 – Single factor receipts apportionment.
• WAC 458-20-224 – Service and other business activities.

Team or player fines

Leagues or governing organizations may impose fines on players or teams for rule violations or disciplinary matters.

Reporting requirements

Penalties or fines are considered gross income from engaging in business and are subject to Service and Other Activities B&O tax.

How is service income attributed?

Generally, service income is attributed to Washington based on where the customer receives the benefit of the service. If the business can reasonably determine the amount of a specific benefit received in Washington, it must attribute that receipt to Washington.

If the business is unable to attribute the service income to the location where the customer receives the benefit of the service, see the series of steps for attributing income on the Attributing service income page

References

• RCW 82.04.080 – “Gross income of the business.”
• RCW 82.04.290 – Tax on service and other activities.
• RCW 82.04.460 – Apportionable income—Taxable in Washington and another state.
• RCW 82.04.462 – Apportionable income.
• WAC 458-20-19401 – Minimum nexus thresholds for apportionable activities and selling activities.
• WAC 458-20-19402 – Single factor receipts apportionment.
• WAC 458-20-224 – Service and other business activities.