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Washington Supreme Court holds business could not dissociate in-state activities from sales to avoid B&O tax nexus

The Washington Supreme Court recently held that an out-of-state electronics distributor had substantial nexus for purposes of the state’s business and occupation tax for its sales delivered to Washington even though its in-state office did not play a significant role in those transactions. In upholding a decision by the state’s Court of Appeals, the Supreme Court ruled that the distributor satisfied the nexus requirements because the Washington office was significant in establishing and maintaining a market for its goods in the state, and creating “a climate for Washington residents to want to order from the company.” As a result, the distributor could not avoid taxation by dissociating its in-state activities from its sales delivered to Washington.