Cathie Cobean, CPA, Julie Parker, EA and office manager, Jennifer Collins attended the annual Washington State Tax Conference held in Seattle on May 18, 2011.  Eight speakers spoke on a variety of state tax issues including Department of Revenue Tax Simplification Project, new tax developments, economic nexus and multistate tax update.

What is clear is that state tax issues are changing rapidly and there is a growing trend among states to expand taxing jurisdictions on business activities beyond physical presence.

Some highlights from the seminar include:

• All taxpayers are now required to file and pay taxes electronically effective 7/24/11.  This includes quarterly and annual filers.
• DOR determined that online searchable databases are digital automated services (DAS) and therefore do not qualify for the exemption for digital goods used solely for a business purpose.  The DOR began to enforce this policy 1/1/11.
• Multi-State Tax Commission suggests the following bright line nexus standards:  Meeting or exceeding any of these creates nexus for both income and sales tax.  $50,000 property, $50,000 payroll, $500,000 of sales or 25% of the total property, total payroll or total sales.
• WA Economic Nexus - Out of state businesses:  Effective June 1, 2010 "economic nexus" adopted in WA.  No physical presence is required for Nexus.  $50,000 of property or payroll located in WA; or $250,000 in receipts from WA; or 25% of total property or payroll or receipts are from WA.