WAC 194-04

458-20-19404 Financial institutions - Income apportionment Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010. The Department has adopted the following emergency rule to explain how these requirements apply: WAC 458-20-19404 (Rule 19404) Financial institutions – Income apportionment Changes from the previous emergency rule filed January 28, 2011 under WSR 11-04-068 were made as follows: Rule 19404 – Changes to same language as proposed final rule.

Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010. The Department has adopted the following emergency rules to explain how these requirements apply: WAC 458-20-19402 (Rule 19402) Single factor receipts apportionment – Generally WAC 458-20-19403 (Rule 19403) Single factor receipts apportionment – Royalties WAC 458-20-19404 (Rule 19404) Financial institutions – Income apportionment

Financial institutions -- Income apportionment Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010. The Department has adopted the following emergency rules to explain how these requirements apply: WAC 458-20-19402 (Rule 19402) Single factor receipts apportionment – Generally WAC 458-20-19403 (Rule 19403) Single factor receipts apportionment – Royalties WAC 458-20-19404 (Rule 19404) Financial institutions – Income apportionment

Financial institutions -- Income apportionment Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010. The Department has adopted the following emergency rules to explain how these requirements apply: WAC 458-20-19402 (Rule 19402) Single factor receipts apportionment – Generally WAC 458-20-19403 (Rule 19403) Single factor receipts apportionment – Royalties WAC 458-20-19404 (Rule 19404) Financial institutions – Income apportionment

Financial institutions-Income apportionment Effective June 1, 2010, chapter 23, Laws of 2010 1st sp. sess. changed Washington's method of apportioning certain gross income from engaging in business as a financial institution. RCW 82.04.460 requires to based on the Model regulation for the apportionment of income of financial institutions adopted by the Multistate Tax Commission (MTC).

Financial institutions - Income apportionment;

WAC 458-20-19404 Financial institutions – Income apportionment – This rule addresses how gross income from engaging in business as a financial institution is apportioned when the financial institution engages in business both within and outside the state. Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010. The Department has adopted the following emergency rules to explain how these requirements apply.

WAC 458-20-19401 Minimum nexus thresholds for apportionable activities, WAC 458-20-19402 Single factor receipts apportionment – Generally, WAC 458-20-19403 Apportionable royalty receipts attribution, WAC 458-20-19404 Financial institutions – Income apportionment and WAC 458-20-19405 CPI-U adjustments to minimum nexus thresholds for apportionable activities The amendments to these rules: Repeal Rule 19405 and put this language into a new Excise Tax Advisory (ETA); Delete multiple references to Rule 19405 in Rules 19401 through 19404; and Recognize provisions of SSB 6333, Sec.

Financial institutions-Income apportionment. Part I of Chapter 23, 2010 Laws 1st Special Session (2ESSB 6143) changed the apportionment and nexus requirements for apportionable activities, effective June 1, 2010.

New "Economic Nexus" in Washington State May Impact "Foreign Corporations"

New "Economic Nexus" in Washington State May Impact Financial Institutions Including Out-of-state Banks and Credit Card Issuers

New Apportionment Method

Tax Attorneys and CPAs New "Economic Nexus" in Washington State May Impact Your Clients

Registered Out-of-state Businesses Currently not Reporting Income from Service Activities - New Apportionment for Certain Income

B&O Tax Reporting Requirement Continues After Business Activity Stops (Trailing Nexus)

RULE 19401; RULE 19402; RULE 19404; RCW 82.04.067(1)(c)(iii): B&O TAX – SUBSTANTIAL NEXUS – RECEIPTS FROM THIS STATE. To determine what constitutes “receipts from this state” for determining substantial nexus, the states apportionment rules govern. For loan servicing fees, the fees are attributed to Washington under Rule 19404 if the borrower on the loan being serviced is located in Washington.