• City of Tacoma QA
  • City of Tacoma Data

Apportionment and Allocation

Apportionment - Service and Other Activities

Service income is apportioned to the City by multiplying apportionable income by a fraction.  The fraction includes a numerator which is the payroll factor plus the service income factor and a denominator of 2. 


The payroll factor is:


Total payroll paid in the City during the tax period

Total payroll paid everywhere during the tax period


The service income factor is:


_Total service income of the taxpayer in the City during the tax period

Total service income of the taxpayer everywhere during the tax period


The formula looks like this:

 Total Taxable Income x (Payroll Factor + Service Income Factor)  = Tax Due


Apportionment Update

Effective January 1, 2020, the definition of "customer location" that is used to determine the service income of the taxpayer in the two-factor apportionment formula has a new definition.  Tacoma Tax Rule 194 provides more information on the new rules effective for tax periods beginning January 1, 2020.  


Sales of Tangible Personal Property/Digital Products (TMC 6A.30.077)

The activity of sales (retail and wholesale) of tangible personal property and digital products is allocated to the place where delivery to the buyer occurs.


Printing and Publishing (TMC 6A.30.078) 
Activity from printing and of publishing newspapers, periodicals, or magazines shall be allocated to the principal place in this state from which the taxpayers business is directed or managed.


Intangibles (TMC 6A.30.076)

Gross income derived from the sale of intangibles such as royalties, trademarks, patents or goodwill is assigned to the jurisdiction where the person is domiciled (the person’s headquarters is located).