Effective July 1, 2017, the timeframe for applying the economic nexus standards for out-of-state businesses with service, royalties, and other apportionable income has changed. Businesses not organized or commercially domiciled in Washington with apportionable income attributed to Washington will be subject to business and occupation (B&O) tax under apportionable classifications.This applies in the current year if during either the current or prior calendar year they met any of the following economic nexus thresholds:
More than $267,000 of gross receipts sourced or attributed to Washington
More than $53,000 of payroll in Washington
More than $53,000 of property in Washington
At least 25 percent of total receipts, payroll or property in Washington
In determining whether a business has exceeded a receipts threshold, apportionable income attributed to Washington is included along with its retail and wholesale sales sourced to this state.
If you meet one or more of the above economic nexus thresholds, you must register your business with the Washington State Department of Revenue and report and pay Washington B&O tax.
How do I register my business in Washington?
Register your business online where you will find step-by-step instructions, information and resources.
If you have questions, call us at 1-800-647-7706 or request a binding tax ruling.