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  5. Referral Fees

Referral fees

You may refer a buyer or seller to another firm or broker. As a result, you may receive a fee when the real estate transaction closes. The referral fee you receive is subject to business and occupation (B&O) tax under the Service and Other Activities classification.

Property located outside of Washington

If you receive referral fees related to real properties located outside of Washington, you may be able to use our apportionment formula to determine how much of your apportionable income is subject to B&O tax in Washington.

References

RCW 82.04.255 Tax on real estate brokers.

WAC 458-20-19401 Minimum nexus thresholds for apportionable activities and selling activities.

WAC 458-20-19402 Single factor receipts apportionment – Generally.

Apportionment industry guide