Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-19401 - Minimum nexus thresholds for apportionable activities and selling activities

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
(a) The state of
			 Washington imposes business and occupation (B&O) tax on persons that have
			 "substantial nexus" with this state. For apportionable activities and for
			 selling activities taxable under
			 RCW
			 82.04.250(1),
			 82.04.257(1)
			 or
			 82.04.270,
			 substantial nexus does not require a physical presence in this state, as that
			 phrase is described in
			 RCW
			 82.04.067(6).
(b) This rule only applies to periods after
			 May 31, 2010, and applies as follows:
(i) In
			 2015, Washington changed the thresholds for substantial nexus described in
			 subsection (3)(a)(iii) of this rule.
(ii) Prior to September 1, 2015, these
			 thresholds only applied to apportionable activities, and did not apply to
			 wholesaling or retailing activity.
(iii) Effective September 1, 2015, Washington
			 expanded the scope of these tests to apply to wholesaling activity.
(iv) Effective July 1, 2017, Washington
			 expanded the scope of some of these tests to apply to retailing activity
			 taxable under
			 RCW
			 82.04.250(1) or
			 82.04.257(1).
(c) Effective July 1, 2017, the
			 thresholds are measured based on a person's payroll, property, and receipts in
			 the current or immediately preceding calendar year. For the period from
			 September 1, 2015, to June 30, 2017, the thresholds were measured based on a
			 person's payroll, property, and receipts in the immediately preceding calendar
			 year. See subsection (9) of this rule for additional information. For periods
			 from June 1, 2010, to August 31, 2015, the thresholds were based on the
			 person's payroll, property, and receipts in the current calendar year. See
			 subsection (10) of this rule for additional information.
(d)
Other rules that may apply.
Readers may also want to refer to other rules for additional information,
			 including those in the following list:
(i) WAC
			 458-20-193
			 Interstate sales of tangible personal property. This rule describes the
			 taxation of interstate sales of tangible personal property.
(ii) WAC
			 458-20-194
			 Doing business inside and outside the state. This rule describes separate
			 accounting and cost apportionment and applies only to tax liability incurred
			 from January 1, 2006, through May 31, 2010.
(iii) WAC
			 458-20-19402
			 Single factor receipts apportionment - Generally. This rule describes the
			 general application of single factor receipts apportionment and applies only to
			 tax liability incurred after May 31, 2010.
(iv) WAC
			 458-20-19403
			 Apportionable royalty receipts attribution. This rule describes the application
			 of single factor receipts apportionment to gross income from royalties and
			 applies only to tax liability incurred after May 31, 2010.
(v) WAC
			 458-20-19404
			 Financial institutions Income apportionment. This rule describes the
			 application of single factor receipts apportionment to certain income of
			 financial institutions and applies only to tax liability incurred after
			 December 31, 2015.
(vi) WAC
			 458-20-19404A
			 Financial institutions Income apportionment. This rule describes the
			 application of single factor receipts apportionment to certain income of
			 financial institutions and applies only to tax liability incurred between June
			 1, 2010, and December 31, 2015.
(e) Examples included in this rule identify a
			 number of facts and then state a conclusion; they should be used only as a
			 general guide. The tax results of all situations must be determined after a
			 review of all the facts and circumstances. For the examples in this rule, gross
			 income received by the taxpayer is from engaging in apportionable activities or
			 from making wholesale or retail sales. Also, unless otherwise stated, the years
			 in the examples are time periods that occur after June 30, 2017.
The minimum nexus thresholds described in this rule and used in
				examples are unadjusted for consumer price index changes applicable for years
				after 2017.