United States

Washington DOR announces 2015 factor presence thresholds


On Feb. 3, 2015, the Washington Department of Revenue issued an Excise Tax Advisory to inform taxpayers that the state’s factor presence nexus thresholds will remain at $53,000 of in-state property, $53,000 of in-state payroll or $267,000 of in-state sales for the 2015 calendar year for businesses that report under apportionable business and occupation tax classifications, such as service providers and licensors of intangible property.

Pursuant to the Revised Code of Washington section 82.04.067(1)(c), as effective June 1, 2010, a nonresident individual or a business entity organized or commercially domiciled outside of Washington that engages in activities listed in Washington Administrative Code 458-20-19401(2)(a) within the state is deemed to have Washington nexus for business and occupation tax purposes if the individual or business entity has any of the following:

  • More than $50,000 of in-state property
  • More than $50,000 of in-state payroll
  • More than $250,000 of in-state sales
  • At least 25 percent of total property, total payroll or total receipts in Washington

According to Revised Code of Washington section 82.04.067(5), the department is required to review the cumulative percentage change in the consumer price index (CPI) each year in December and must adjust the thresholds provided in section 82.04.067(1)(c) if the change in CPI from the later of June 1, 2010, or the date that the thresholds were last adjusted is greater than 5 percent. Based on this annual calculation, the thresholds were last changed to $53,000 of in-state property, $53,000 of in-state payroll and $267,000 of in-state sales for the 2013 calendar year. Per the 2014 calculation, the department determined that the change in CPI since Jan. 1, 2013, was 2.5 percent, and therefore, no additional adjustment to the thresholds was required.

Although no change was made to the thresholds for the 2015 calendar year, nonresident individuals and business entities organized or commercially domiciled outside of Washington that have apportionable business activities within the state should be aware that the currently applicable thresholds are greater than the thresholds provided in the statutory language and should adjust their nexus determinations accordingly.

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