Just a reminder to businesses that engage in apportionable business activities in the state of Washington: You must file an Annual Reconciliation of Apportionable Income with the Washington State Department of Revenue, regardless of whether or not an adjustment to the tax amounts reported throughout the year is required. The Annual Reconciliation of Apportionable Income for the 2021 calendar year is due on or before October 31, 2022.
Apportionable business activities include income reported under any of the 19 apportionable tax classifications, the most common of which is the Service & Other Activities business and occupation (B&O) tax classification.
The Annual Reconciliation of Apportionable Income is considered a “Thirteenth Return” by Washington if the business is reporting on a monthly filing frequency. As such, failure to timely file an Annual Reconciliation of Apportionable Income by the due date will result in penalties and interest being added to any B&O tax that may be due on your reconciliation. If you file your Washington state excise tax returns electronically, you may file your annual reconciliation utilizing the Department of Revenue’s My DOR Services, or you may use the Department of Revenue’s form, Annual Reconciliation of Apportionable Income, which is available at www.dor.wa.gov. If any additional tax is due, the Department will accept payment either by an electronic funds transfer or a check. If you are due a credit, the credit will be either transmitted via electronic funds transfer or a check.
The filing of the Annual Reconciliation of Apportionable Income has become more complex in recent years with changing thresholds and additional information that is requested by the Washington Department. These changes may leave you rethinking how you are filing. For more information or assistance in completing the reconciliation process, please contact your Perkins advisor.