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:
- Is subject to a business activities tax in another state or country on its income from apportionable activities during the current year
- Is organized or commercially domiciled in another state or country during the current year
- Had more than $53,000 of payroll in another state or country during the prior year
- Had more than $53,000 of property in another state or country during the prior year
- Had more than $267,000 of gross receipts in the other state or country during the prior year
- Had at least 25 percent of its total property, payroll, or receipts in another state or country during the prior year.
If you are eligible to apportion your income, you may reduce the amount of Washington tax you owe. If you do not meet any of the above thresholds, then your gross income is taxable in Washington and may not be apportioned.
These thresholds are effective from 2015 until revised. See ETA 3195 for previous years and more information.
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.