Washington businesses earning apportionable income that is taxable in another state must apportion the income between Washington and other states and countries. “Taxable in another state” means that a business meets at least one of the following thresholds for 2018:
 

• Is subject to a business activities tax in another state or country on its income from apportionable activities in 2017 and/or 2018
• Is organized or commercially domiciled  in another state or country in 2017 and/or 2018
• Had more than $53,000 of payroll in another state or country in 2017, $57,000 in 2018
• Had more than $53,000 of property in another state or country in 2017, $57,000 in 2018
• Had more than $267,000 of gross receipts in the other state or country in 2017, $285,000 in 2018
• Had at least 25 percent of its total property, payroll, or receipts in another state or country in 2017 or 2018

Thresholds for previous years are found in ETA 3195.

If you are eligible to apportion your income, you may be able to take an apportionment deduction. If you do not meet any of the above thresholds, then your gross income is taxable in Washington and may not be apportioned.

In determining whether a business has exceeded a receipts threshold, apportionable income attributed to another state or country is included along with its retail and wholesale sales sourced to the same state or country.

Note: Washington based wholesalers continue to be able to take the Interstate and Foreign Sales deduction for goods delivered outside of the state without regard to whether they exceed an economic nexus threshold in the destination state or country.

How do I apportion and/or reconcile my income?