Nexus for July 1, 2017 through Dec. 31, 2017

The following nexus thresholds apply to sales delivered or sourced to Washington and income apportioned to Washington for the period starting July 1, 2017 through Dec. 31, 2017. If your business meets any of the following thresholds, your business must register and report for this period.

Changes that impact this period

Effective July 1, 2017, the following changes took place:

• Economic nexus standard extends to the retailing B&O tax classification.
• The timeframe for establishing economic nexus changes from the prior year to the prior or current year.
• Trailing nexus changes (See WAC 458-20-193(106)).
  

Retail sales tax

• Physical presence in 2016 or 2017.
  

Retailing B&O tax

You meet at least one of the following thresholds in 2016 or 2017:

• Physical presence.
• More than $267,000 of gross receipts sourced or attributed to Washington.
• At least 25 percent of your total receipts is in Washington.

If the business did not have nexus with Washington in 2016, but it meets the gross receipts threshold in 2017, the business only owes B&O tax on receipts that exceed the $267,000 threshold.

Example: An out-of-state business had no physical presence in Washington and did not exceed an economic nexus threshold in 2016. In 2017, the total of its income sourced or attributed to Washington is as follows:

The business’s 2017 income exceeded the receipts threshold of $267,000 in the current year. The business owes B&O tax on $33,000, which is the income received or accrued after July 1, 2017, that exceeds the $267,000 threshold.

If this business had exceeded the $267,000 threshold in 2016, it would owe B&O tax on the $200,000 received/accrued after June 30, 2017.

If this business had physical presence in Washington in 2016, it would owe B&O tax on the full $300,000 for 2017.

Wholesaling B&O tax

You meet at least one of the following thresholds in 2016 or 2017:

• You are an individual that is a resident of this state or an entity that is organized or commercially domiciled in Washington.
• More than $267,000 of gross receipts sourced or attributed to Washington.
• More than $53,000 of payroll in Washington.
• More than $53,000 of property in Washington.
• At least 25% of your total receipts, payroll, or property is in Washington.

Service and other activities (and other apportionable activities) B&O tax

You meet at least one of the following thresholds in 2016 or 2017:

• You are an individual that is a resident of this state or an entity that is organized or commercially domiciled in Washington.
• More than $267,000 of gross receipts sourced or attributed to Washington.
• More than $53,000 of payroll in Washington.
• More than $53,000 of property in Washington.
• At least 25% of your total receipts, payroll, or property is in Washington.

More information

• If you did not have nexus with Washington in 2016, and meet any of the thresholds in 2017, you must begin reporting after the threshold is met.
• In determining whether a business has exceeded a receipts threshold, apportionable income attributed to Washington is included along with retail and wholesale sales sourced to this state.
• Excise Tax Advisory (ETA) 3195.2020.