By Garry Fujita

Washington-based businesses tend to focus on Washington’s business taxes, because those taxes are typically the most relevant.  However, as businesses grow into interstate business activities, they can become subject to another state’s income tax jurisdiction … like California.  If a business is taxable in another state, then that state will typically apportion the interstate revenue to itself in a proportion that is determined by a formula.  This formula is a proxy for your activities in that other state that contributed to your interstate income.  The U. S. Constitution allows states to demand a tax that is fairly related to a taxpayer’s business activity in that state. Continue reading →

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