Washington: Economic Nexus Effective June 1, 2010
Washington's new legislation created an “economic nexus” standard effective June 1, 2010. It requires some businesses earning apportionable income from Washington customers to be subject to taxes whether or not they maintain offices in the state or have any physical presence.
The nexus standard applies only to “apportionable income,” which includes income from various service activities and royalty income.
The legislation also updated the apportionment method from “cost apportionment,” to single factor sales apportionment and establishes a “trailing nexus” for one year.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.