SALT Report 1875 – The Washington Department of Revenue updated their business guide for out-of-state businesses. The guide provides an overview of nexus creating activities, sales and use taxes, business and occupation (B&O) taxes, and licensing requirements.
Businesses that make wholesale or retail sales in Washington have substantial nexus if the person has a physical presence in the state. A person is considered physically present in Washington if the person has property or employees in the state and participates in one of the following activities:
- Soliciting sales in this state through employees or other representatives
- Installing or assembling goods in this state, either by employees or other representatives
- Maintaining a stock of goods in this state
- Renting or leasing tangible personal property
- Providing services, or
- Constructing, installing, repairing, or maintaining real property or tangible personal property in the state
Washington has implemented an economic nexus standard rather than a physical presence standard for certain business activities. Businesses that earn apportionable income, which includes activities subject to the service and other activities tax, and the royalty B&O tax from Washington customers, are subject to tax whether or not they maintain offices in the state or have any physical presence.
An out-of-state business must register with the Department if its business activities establish nexus sufficient to impose B&O tax or public utility tax; or the business collects retail sales tax, use tax, or any other taxes administered by the Department.
The Department offers a voluntary disclosure program for taxpayers that have been doing business in Washington but have not registered with the Department.
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