Wash. Rev. Code » Title 82 · Chapter 82.04
Revised Code of Washington

Wash. Rev. Code § 82.04.460 (2026)

Apportionable income—Taxable in Washington and another state

✓ current as of May 2026
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(1) Except as otherwise provided in this section, any person earning apportionable income taxable under this chapter and also taxable in another state must, for the purpose of computing tax liability under this chapter, apportion to this state, in accordance with RCW 82.04.462, that portion of the person's apportionable income derived from business activities performed within this state.
(2) The department must by rule provide a method of apportioning the apportionable income of financial institutions, where such apportionable income is taxable under RCW 82.04.290. The rule adopted by the department must, to the extent feasible, be consistent with the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions as existing on June 1, 2010, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this section, except that:
(a) The department's rule must provide for a single factor apportionment method based on the receipts factor; and
(b) The definition of "financial institution" contained in appendix A to the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions is advisory only.
(3) The department may by rule provide a method or methods of apportioning or allocating gross income derived from sales of telecommunications service and competitive telephone service taxed under this chapter, if the gross proceeds of sales subject to tax under this chapter do not fairly represent the extent of the taxpayer's income attributable to this state. The rule must provide for an equitable and constitutionally permissible division of the tax base.
(4) For purposes of this section, the following definitions apply unless the context clearly requires otherwise:
(a) "Apportionable income" means gross income of the business generated from engaging in apportionable activities, including income received from apportionable activities performed outside this state if the income would be taxable under this chapter if received from activities in this state, less the exemptions and deductions allowable under this chapter. For purposes of this subsection, "apportionable activities" means only those activities taxed under:
(i) RCW 82.04.255;
(ii) RCW 82.04.260 (3), (5), (6), (7), (8), (9), (10), and (13);
(iii) RCW 82.04.280(1)(e);
(iv) RCW 82.04.285;
(v) RCW 82.04.286;
(vi) RCW 82.04.290;
(vii) RCW 82.04.2907;
(viii) RCW 82.04.2908;
(ix) RCW 82.04.263, but only to the extent of any activity that would be taxable under any of the provisions enumerated under (a)(i) through (viii) of this subsection (4) if the tax classification in RCW 82.04.263 did not exist; and
(x) RCW 82.04.280(1)(a) or exempted under RCW 82.04.759, but only with respect to advertising.
(b)(i) "Taxable in another state" means that the taxpayer is subject to a business activities tax by another state on its income received from engaging in apportionable activities; or the taxpayer is not subject to a business activities tax by another state on its income received from engaging in apportionable activities, but any other state has jurisdiction to subject the taxpayer to a business activities tax on such income under the substantial nexus standards in RCW 82.04.067(1).
(ii) For purposes of this subsection (4)(b), "business activities tax" and "state" have the same meaning as in RCW 82.04.462.
[ 2023 c 286 s 5; 2014 c 97 s 304; 2011 c 174 s 203; 2010 1st sp.s. c 23 s 108; 2004 c 174 s 6; 1985 c 7 s 154; 1983 2nd ex.s. c 3 s 28; 1975 1st ex.s. c 291 s 9; 1961 c 15 s 82.04.460. Prior: 1941 c 178 s 5; 1939 c 225 s 4; Rem. Supp. 1941 s 8370-8a.]

Notes:

Findings—Effective date—Expiration date—2023 c 286: See notes following RCW 82.04.759.
Contingency—Application—2010 1st sp.s. c 23 ss 102-112: See notes following RCW 82.04.067.
Effective date—2010 1st sp.s. c 23: See note following RCW 82.04.4292.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Effective date—2004 c 174: See note following RCW 82.04.2908.
Construction—Severability—Effective dates—1983 2nd ex.s. c 3: See notes following RCW 82.04.255.
Effective dates—Severability—1975 1st ex.s. c 291: See notes following RCW 82.04.050.
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RCW 82.04.460

Apportionable income—Taxable in Washington and another state. (Effective January 1, 2034.)

(1) Except as otherwise provided in this section, any person earning apportionable income taxable under this chapter and also taxable in another state must, for the purpose of computing tax liability under this chapter, apportion to this state, in accordance with RCW 82.04.462, that portion of the person's apportionable income derived from business activities performed within this state.
(2) The department must by rule provide a method of apportioning the apportionable income of financial institutions, where such apportionable income is taxable under RCW 82.04.290. The rule adopted by the department must, to the extent feasible, be consistent with the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions as existing on June 1, 2010, or such subsequent date as may be provided by the department by rule, consistent with the purposes of this section, except that:
(a) The department's rule must provide for a single factor apportionment method based on the receipts factor; and
(b) The definition of "financial institution" contained in appendix A to the multistate tax commission's recommended formula for the apportionment and allocation of net income of financial institutions is advisory only.
(3) The department may by rule provide a method or methods of apportioning or allocating gross income derived from sales of telecommunications service and competitive telephone service taxed under this chapter, if the gross proceeds of sales subject to tax under this chapter do not fairly represent the extent of the taxpayer's income attributable to this state. The rule must provide for an equitable and constitutionally permissible division of the tax base.
(4) For purposes of this section, the following definitions apply unless the context clearly requires otherwise:
(a) "Apportionable income" means gross income of the business generated from engaging in apportionable activities, including income received from apportionable activities performed outside this state if the income would be taxable under this chapter if received from activities in this state, less the exemptions and deductions allowable under this chapter. For purposes of this subsection, "apportionable activities" means only those activities taxed under:
(i) RCW 82.04.255;
(ii) RCW 82.04.260 (3), (5), (6), (7), (8), (9), (10), and (13);
(iii) RCW 82.04.280(1)(e);
(iv) RCW 82.04.285;
(v) RCW 82.04.286;
(vi) RCW 82.04.290;
(vii) RCW 82.04.2907;
(viii) RCW 82.04.2908;
(ix) RCW 82.04.263, but only to the extent of any activity that would be taxable under any of the provisions enumerated under (a)(i) through (viii) of this subsection (4) if the tax classification in RCW 82.04.263 did not exist; and
(x) RCW 82.04.260(14) and 82.04.280(1)(a), but only with respect to advertising.
(b)(i) "Taxable in another state" means that the taxpayer is subject to a business activities tax by another state on its income received from engaging in apportionable activities; or the taxpayer is not subject to a business activities tax by another state on its income received from engaging in apportionable activities, but any other state has jurisdiction to subject the taxpayer to a business activities tax on such income under the substantial nexus standards in RCW 82.04.067(1).
(ii) For purposes of this subsection (4)(b), "business activities tax" and "state" have the same meaning as in RCW 82.04.462.
[ 2014 c 97 s 304; 2011 c 174 s 203; 2010 1st sp.s. c 23 s 108; 2004 c 174 s 6; 1985 c 7 s 154; 1983 2nd ex.s. c 3 s 28; 1975 1st ex.s. c 291 s 9; 1961 c 15 s 82.04.460. Prior: 1941 c 178 s 5; 1939 c 225 s 4; Rem. Supp. 1941 s 8370-8a.]

Notes:

Contingency—Application—2010 1st sp.s. c 23 ss 102-112: See notes following RCW 82.04.067.
Effective date—2010 1st sp.s. c 23: See note following RCW 82.04.4292.
Findings—Intent—2010 1st sp.s. c 23: See notes following RCW 82.04.220.
Effective date—2004 c 174: See note following RCW 82.04.2908.
Construction—Severability—Effective dates—1983 2nd ex.s. c 3: See notes following RCW 82.04.255.
Effective dates—Severability—1975 1st ex.s. c 291: See notes following RCW 82.04.050.
Notes of Decisions
Cited in 17 cases (7 in the last 5 years), 1954–2026 · leading case: Nordstrom Credit, Inc. v. Dep't of Revenue, 845 P.2d 1331 (Wash. 1993).
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Nordstrom Credit, Inc. v. Dep't of Revenue, 845 P.2d 1331 (Wash. 1993). · cites it 4× “RCW 82.04.460 further provides: (1) Any person rendering services taxable under RCW 82.”
Crown Zellerbach Corp. v. State, 278 P.2d 305 (Wash. 1954). “RCW 82.04.460 provides: “Any person rendering services and maintaining places of business both within and without this state shall, for the purpose of computing tax liability under this chapter, apportion to this state that portion of his gross income which is derived from…”
Pac. First Fed. Sav. & Loan Ass'n v. State, 598 P.2d 387 (Wash. 1979). · cites it 10× “Because half the liquid investment funds originated in Oregon, Pacific employed an apportionment formula provided under RCW 82.04.460. Accordingly, it reported and paid tax to the State of Washington on only one-half of the gross income derived from the liquid fund investments.”
Pac. First Fed. Sav. & Loan Ass'n v. State, 598 P.2d 387 (Wash. 1979). · cites it 11× “Because half the liquid investment funds originated in Oregon, Pacific employed an apportionment formula provided under RCW 82.04.460. Accordingly, it reported and paid tax to the State of Washington on only one-half of the gross income derived from the liquid fund investments.”
Pub. Util. Dist. No. 2 v. State, 510 P.2d 206 (Wash. 1973). · cites it 2× “2d 305 (1954), this court reviewed an attack upon a taxing statute (then RCW 82.04.460) which made "no distinction between sales within the state and sales outside the state", and which provided for fair and equal treatment of interstate and intrastate sales through an "adequate…”
KMS Fin. Servs., Inc. v. City of Seattle, 146 P.3d 1195 (Wash. Ct. App. 2006). “Rather, RCW 82.04.460 provides for separate accounting, if it can be accurately done, or, in the alternative, the cost accounting method where the taxpayer must identify its in-state costs and compare those to all costs for the purpose of cost apportionment.”
Express Scripts, Inc., V State Of Wa Dept. Of Revenue (Wash. Ct. App. 2019). · cites it 7× “220 imposes the B&O tax, and RCW 82.04.460 pertains to how entities taxable in both Washington 3 Ch.”
Citibank South Dakota, V. State Of Washington Dep't Of Revenue (Wash. Ct. App. 2023). · cites it 3× “Those rules are stated in WAC 458-20-14601,4 which provide the apportionment 3 Citibank argues that it did not meet the physical presence requirement because under former RCW 82.04.460(1) (2004), it was required to maintain a place of business within Washington.”
Valente Solutions, Llc V. State Of Wa, Et Ano. (Wash. Ct. App. 2025). · cites it 3× “2d at 891 (citing RCW 82.04.460(1)). “In 2010, the Washington Legislature adopted a ‘single factor’ receipts apportionment scheme for service income.”
Lendingtree, Llc v. Dept. Of Revenue (Wash. Ct. App. 2020). · cites it 2× “23; RCW 82.04.460, .462; WAC 458-20-19402. Under this method, the taxpayer multiplies its “apportionable income,” or gross income, by the “receipts factor.”
Walter Dorwin Teague Assocs., Inc., V State Of Wa, Dept. Of Revenue (Wash. Ct. App. 2021). · cites it 2× “Under RCW 82.04.460(1), “any person earning apportionable income .”
DISH Network, LLC v. Dep't of Revenue (Wash. Ct. App. 2023). · cites it 2× “RCW 82.04.460(1). Apportionment of income is based on the portion of income derived from services rendered within the state.”
Show all 17 citing cases →
— Wash. Rev. Code § 82.04.460(1) — 7 cases
Express Scripts, Inc., V State Of Wa Dept. Of Revenue (Wash. Ct. App. 2019). “220 imposes the B&O tax, and RCW 82.04.460 pertains to how entities taxable in both Washington 3 Ch.”
Citibank South Dakota, V. State Of Washington Dep't Of Revenue (Wash. Ct. App. 2023). “Those rules are stated in WAC 458-20-14601,4 which provide the apportionment 3 Citibank argues that it did not meet the physical presence requirement because under former RCW 82.04.460(1) (2004), it was required to maintain a place of business within Washington.”
DISH Network, LLC v. Dep't of Revenue (Wash. Ct. App. 2023). “RCW 82.04.460(1). Apportionment of income is based on the portion of income derived from services rendered within the state.”
Pac. First Fed. Sav. & Loan Ass'n v. State, 598 P.2d 387 (Wash. 1979). “Because half the liquid investment funds originated in Oregon, Pacific employed an apportionment formula provided under RCW 82.04.460. Accordingly, it reported and paid tax to the State of Washington on only one-half of the gross income derived from the liquid fund investments.”
Lendingtree, Llc v. Dept. Of Revenue (Wash. Ct. App. 2020). “23; RCW 82.04.460, .462; WAC 458-20-19402. Under this method, the taxpayer multiplies its “apportionable income,” or gross income, by the “receipts factor.”
— Wash. Rev. Code § 82.04.460(2) — 2 cases
Nordstrom Credit, Inc. v. Dep't of Revenue, 845 P.2d 1331 (Wash. 1993). “RCW 82.04.460 further provides: (1) Any person rendering services taxable under RCW 82.”
Citibank South Dakota, V. State Of Washington Dep't Of Revenue (Wash. Ct. App. 2023). “Those rules are stated in WAC 458-20-14601,4 which provide the apportionment 3 Citibank argues that it did not meet the physical presence requirement because under former RCW 82.04.460(1) (2004), it was required to maintain a place of business within Washington.”
— Wash. Rev. Code § 82.04.460(4)(a) — 3 cases
Arup Labs., Inc, V State Of Wa Dept Of Revenue (Wash. Ct. App. 2020).
Arup Labs., Inc, V State Of Wa Dept Of Revenue (Wash. Ct. App. 2020).
Valente Solutions, Llc V. State Of Wa, Et Ano. (Wash. Ct. App. 2025). “2d at 891 (citing RCW 82.04.460(1)). “In 2010, the Washington Legislature adopted a ‘single factor’ receipts apportionment scheme for service income.”
— Wash. Rev. Code § 82.04.460(4)(a)(i) — 1 case
Valente Solutions, Llc V. State Of Wa, Et Ano. (Wash. Ct. App. 2025). “2d at 891 (citing RCW 82.04.460(1)). “In 2010, the Washington Legislature adopted a ‘single factor’ receipts apportionment scheme for service income.”
— Wash. Rev. Code § 82.04.460(4)(a)(vi) — 1 case
Walter Dorwin Teague Assocs., Inc., V State Of Wa, Dept. Of Revenue (Wash. Ct. App. 2021). “Under RCW 82.04.460(1), “any person earning apportionable income .”
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