Apr 11, 2016
From KPMG TaxWatch
House Bill 2938, which was recently signed into law in Washington State, creates an exception to what constitutes physical presence to purposes of determining nexus when a taxpayer is in Washington to attend a trade show or convention. Specifically, under House Bill 2938, effective July 1, 2016, the Washington Department of Revenue cannot make a determination that a taxpayer has nexus based solely on that taxpayer having one or more representatives present in the state attending a single trade convention per year. The restriction does not apply if the taxpayer is making retail sales at the trade convention or taking orders for product to be delivered in Washington State. “Trade convention” means an exhibition for a specific industry or profession attendance at which is not marketed to the general public and the purpose for which is exhibiting, demonstrating, and explaining services, products, or equipment to potential customers. The restriction applies for purposes of B&O taxes, as well as state and local retail sales and use taxes. Per the Department’s fiscal note, the revenue impact is expected to be less than $50,000 per year. It should be noted that Washington State also has economic nexus rules for certain taxpayers for B&O tax purposes. For more information on House Bill 2938, please contact Michele Baisler at 206-913-4117.
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The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.