Just a reminder to businesses that engage in apportionable business activities in the state of Washington: You must file an Annual Reconciliation of Apportionable Income with the Washington State Department of Revenue, regardless of whether or not an adjustment to the tax amounts reported throughout the year is required. The Annual Reconciliation of Apportionable Income for calendar year 2018 is due on or before October 31, 2019.

Apportionable business activities include only the activities subject to the following B&O tax classifications:

  • Service and Other Activities
  • Royalties
  • Travel Agents Commission/Tour Operators
  • International Charter Freight Broker, International Steamship Agent, International Customs House Broker, International Freight Forwarder, International Air Cargo Agent
  • Stevedoring
  • Radioactive Waste Disposal
  • Insurance Producers; Title Insurance Agents; Surplus Line Brokers
  • Public or Nonprofit Hospitals
  • Real Estate Brokers
  • Research and Development Performed by Nonprofit Corporations or Associations
  • Inspecting, Testing, Labeling, and Storing Canned Salmon Owned by Another Person
  • Parimutuel Wagering/Horse Races
  • Gambling Contests of Chance (less than $50,000 a year)
  • Representing and Performing Services for Fire or Casualty Insurance Co. as an Independent Resident Managing General Agent
  • International Investment Management Services
  • Licensed boarding homes
  • Non-Manufacturing Aerospace Product Development
  • Printing or Publishing Newspapers (only with respect to advertising income)
  • Printing and Publishing Periodicals or Magazines (only with respect to advertising income)
  • Cleaning up radioactive waste for U.S. Government

Failure to timely file an Annual Reconciliation of Apportionable Income will result in penalties and interest being added to any tax assessment that may be due on your reconciliation.  If you file your Washington state excise tax returns electronically, you may file your annual reconciliation utilizing the Department of Revenue’s online services, or you may use the Department of Revenue’s form, Annual Reconciliation of Apportionable Income, which is available at www.dor.wa.gov.  If any additional tax is due, the Department will accept payment either by an electronic funds transfer or a check.  If you are due a credit, the credit will either transmitted via electronic funds transfer or a check.

Effective January 1, 2020, the economic nexus threshold is reduced to $100,000 of combined gross receipts per calendar year.

For more information or assistance in completing the reconciliation process, please contact Rachel A. Le Mieux, CPA, CMI, SALT Partner at (206) 382-7711, or Sonjia Barker, CPA, SALT Senior Manager at 206-382-7808.

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Peterson Sullivan is a Seattle-based CPA and advisory firm known for the expertise we bring to publicly traded and closely held middle-market companies, nonprofit organizations, and high-net-worth individuals throughout the Pacific Northwest and around the world.
PS Wealth Advisors, LLC is a registered investment adviser in the state of Washington. The adviser may not transact business in states where it is not appropriately registered or exempt from registration. Individualized responses to persons that involve either the effecting of transactions in securities or the rendering of personalized investment advice for compensation will not be made without registration or exemption.