As experts in state and local taxes, our team members often write or contribute to industry articles. We will share excerpts from these publications on our blog for the benefit of our customers and are always available to discuss specifics and answer questions.
Summary
In this article, originally published by Tax Analysts, KOM Consulting Senior Tax Manager Caleb Allen and Patrick Murphy, tax policy manager in the Interpretations and Technical Advice Division of the Washington State Department of Revenue, discuss an updated Washington apportionment rule and review previous versions of the rule to better understand how and why the state made its changes. Washington’s 2010 implementation of receipts attribution based on the benefit of the service has been challenging for the DOR and taxpayers to administer. The main challenge has involved subsection 303(c) of the former rule, addressing attribution of receipts from business services not related to real property or tangible personal property. Taxpayers and the department have frequently disagreed about what the customer’s related business activities are and where they occur. Addressing this issue, the DOR has created a new analytical framework in new rule 19402.
“Washington’s New B&O Tax Apportionment Rule,” Tax Notes State, July 8, 2024, cover and pp. 83-89.
Next Steps
Businesses may want to evaluate their current attribution methods implemented under the former rule in preparation for the annual apportionment reconciliation due later this yearon October 31. Our team can make sure apportionment methods are in line with this new rule and advise changes as necessary.
Contact
Please contact Caleba@KOMconsulting.com, Mike@KOMconsulting.com, or JohnK@KOMconsulting.com for more information.