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Businesses outside of Washington

If your business earns income attributable to Washington that would be taxable under an apportionable B&O classification and meets one of the following thresholds within a calendar year, you have economic nexus with Washington:

  • More than $53,000 of payroll in Washington
  • More than $53,000 of property in Washington
  • More than $267,000 of gross income from apportionable activities attributed to Washington
  • At least 25 percent of your total property, payroll, or income in or attributed to Washington

If you have economic nexus, you must register your business with the Washington State Department of Revenue and report and pay Washington B&O tax.

These thresholds are effective for periods starting in 2013. Please use these figures until revised. See Excise Tax Advisory (ETA) 3195.2015 for prior years.

How do I register my business in Washington State?

Register your business online where you will find step-by-step instructions, information and resources, or call 1-800-647-7706.

New Economic Nexus Standard – Wholesale Sales

Effective Sept. 1, 2015, economic nexus standards apply to businesses making wholesale sales taxable under RCW 82.04.257(1) or 82.04.270. This means that most out-of-state businesses making wholesale sales into Washington will be subject to the wholesaling business and occupation (B&O) tax on wholesale sales into this state for the current year if they meet any of the following economic nexus thresholds during the prior calendar year:

  • More than $267,000 of gross income in Washington
  • More than $53,000 of payroll in Washington
  • More than $53,000 of property in Washington
  • At least 25 percent of total property, payroll, or income in Washington

These thresholds are adjusted periodically based on changes to the Consumer Price Index for all urban consumers

Economic Nexus - Apportionable Income - Two Important Dates

Effective June 1, 2010, an “economic nexus” standard rather than a “physical presence” standard was created with regard to certain activities. It requires some businesses earning “apportionable income” (including activities subject to the service and other activities and royalty B&O tax classifications) from Washington customers to be subject to taxes whether or not they maintain offices in the state or have any physical presence. See Economic Nexus for more information.

Effective September 1, 2015, the economic nexus standard is extended to business engaging in wholesaling activity. Additionally, the time frame for determining whether a business has exceeded any of the economic nexus thresholds changes from the current tax year to the immediately preceding tax year. Part II of ESSB 6138.

See this page for more information on the new economic nexus standard for wholesale sales and for information on the new Click-through nexus provision for retail sales.


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