In 2010, the Washington legislature passed significant B&O tax changes including the adoption of economic nexus and market sourcing for service activities, as well as the imposition of B&O tax on directors’ fees. However, the largest revenue raiser came from a temporary increase of the service B&O tax rate from 1.5% to 1.8% from May 1, 2010 through June 30, 2013. While there were concerns that the 2013 legislature would extend the “temporary” increase, it did not. As a result, the service B&O tax rate reverted to 1.5% beginning on July 1, 2013.

© 2013 Perkins Coie LLP