// Apportionment
Washington State Apportionment
Washington uses a single-factor receipts apportionment method for multi-state businesses. If your business earns income from apportionable activities in multiple states, these rules determine how much of your income is taxable in Washington.
What is apportionment?
Apportionment is the method by which a multi-state business divides its income among the states where it operates. Washington uses a single-factor receipts method — only the receipts factor (not property or payroll) determines the portion of income taxable in Washington.
This differs from many other states that use a three-factor formula. Washington's approach was adopted to simplify compliance and reflect the economic reality of where a business's customers are located.
The rules are governed by four Washington Administrative Code sections — each addressing a different aspect of the process.
How apportionment works
Determine nexus
Under WAC 458-20-19401, substantial nexus is generally established when WA receipts exceed $100,000 in a year.
Attribute receipts
Use the cascading attribution rules in WAC 458-20-19402 to source service receipts, with special rules for royalties (19403) and financial institutions (19404).
Calculate your factor
Divide your WA-sourced receipts by your total receipts. The result is the share of apportionable income taxable in Washington.
The four apportionment rules
Each WAC section addresses a different aspect of Washington's apportionment framework.
Minimum Nexus Thresholds
Sets the substantial nexus standards for apportionable activities. Nexus is generally established when WA receipts exceed $100,000 in a year.
Read full textServices & Other Activities
The cascading attribution rules for sourcing service receipts — benefit of the service, customer location, billing address, and commercial-domicile fallbacks.
Read full textRoyalty Receipts
Sourcing rules for royalty income — where the intangible is used, marketing vs. non-marketing intangibles, and mixed-use contracts.
Read full textFinancial Institutions
Receipt-type-specific sourcing for loan interest, card fees, investment income, and other financial-institution receipts.
Read full text// Tool
Receipts Factor Calculator
Calculate Your Receipts Factor
Enter your receipts by jurisdiction. The tool automatically identifies jurisdictions under the throwout threshold and calculates your adjusted WA receipts factor.
Your gross income from apportionable activities before apportionment.
Jurisdictions with receipts below this amount are excluded from the denominator (default: $100,000).
Need help with an advanced scenario?
The calculator handles the receipts factor math. For per-customer sourcing analysis, benefit-of-the-service questions, royalty or financial-institution scenarios, and anything that requires reading the underlying rules against your facts — ask Hercules, our WA Tax Apportionment Assistant.
This tool is for informational and estimation purposes only and does not constitute tax advice. Results depend on your specific facts, nexus footprint, and how each jurisdiction's rules interact with WA's. Consult a qualified tax professional or reach out through the contact page before relying on any calculation for a filing decision.