Hedge fund management fees

If my business receives a federal deferral for hedge fund management fees, do I also receive a deferral on my Washington state taxes?

No. Unlike many states with income taxes, Washington’s business and occupation (B&O) tax does not generally align with federal income tax rules, including income deferrals.

Income that your business earns from hedge fund management services that you are allowed to defer under federal income tax rules is generally subject to B&O tax when your business receives or accrues the income.

Businesses must attribute this income based upon the apportionment rules.