Skip to main content
For business and occupation (B&O) tax purposes, apportionment refers to the use of a formula to allocate a business’ income to the appropriate taxing jurisdictions.
If you are a business that is taxable in Washington and another state, you must use our apportionment formula to determine how much of your apportionable income is subject to B&O tax in Washington.
Taxable in another state means your business meets any of the following requirements in the current or prior calendar year:
- Is subject to a business activities tax by another state or country on income received from engaging in apportionable activity.
- Has physical presence nexus in another state or country.
- Has more than $100,000 in gross receipts sourced or attributed to another state or country.
- Is organized or commercially domiciled in another state or country.
In determining if your business has exceeded the $100,000 receipts threshold, you must include gross income from all tax classifications, including the apportionable income attributed to each state or country.
If you do not meet any of the above requirements, your gross income is taxable in Washington and is not eligible to be apportioned to other states or countries.
If you are eligible to apportion your receipts, you must report gross apportionable income and then take an Apportionment (Interstate & Foreign Sales) deduction based on the results of the apportionment formula.
If you are an out of state business, see our out of state businesses reporting thresholds and nexus guide.
Additional resources
References
RCW 82.04.067 Substantial nexus – Engaging in business
RCW 82.04.460 Apportionable income - Taxable in Washington and another state
RCW 82.04.462 Apportionable income
WAC 458-20-19402 Single factor receipts apportionment
WAC 458-20-19403 Apportionable royalty receipts attribution
WAC 458-20-19404 Financial institutions - Income apportionment
