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Washington Administrative Code (Last Updated: November 23, 2016) |
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Title 326. Minority and Women's Business Enterprises, Office of |
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Chapter 326-20. Certification. |
Section 326-20-095. Determination of firm size.
Latest version.
- (1) At the time of application for certification and recertification, a business must demonstrate to the office that it is a small business concern. The office may verify that the business continues to be a small business concern, once certified, at any time. In verifying the business's size, the office will review such financial documentation of the business as may be made available to the office; e.g., annual financial statements, federal income tax returns, state and/or local excise tax reports, and other relevant information.(2) Affiliates. Except as otherwise provided in this chapter, businesses are affiliates of each other when either directly or indirectly:(a) One controls or has power to control the other; or(b) A third party or parties controls or has the power to control both; or(c) Such an "identity of interest" exists between or among them that affiliation may be presumed.(3) Annual receipts. Where the maximum size standard is set by reference to "annual receipts," a business that exceeds the annual receipts in that standard is not eligible for certification. Annual receipts includes all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. However, the term "receipts" excludes proceeds from sales of capital assets and investments, proceeds from transactions between a concern and its domestic and foreign affiliates, proceeds from payments of notes receivable and accounts receivable, and amounts collected as an agent for another, such as gross bookings on which a commission is earned (in which case only the commission earned would constitute revenue) or such as taxes collected for remittance to a taxing authority.(4) Period of measurement.(a) The size of a business that has completed three or more fiscal years will be determined by averaging the annual receipts of the business for each of the most recent three years.(b) The size of a business that has completed less than three fiscal years will be determined by computing the average of the annual receipts from the time the business was formed as follows: Total revenues compiled over the period divided by the number of weeks, including fractions of a week, multiplied by fifty-two.(c) Method of determining annual receipts. Revenue may be taken from the regular books of account of the concern. If the office so elects or the firm has not kept regular books of account or the Internal Revenue Service has found such records to be inadequate and has reconstructed income of the concern, then revenue as shown on the Federal Income Tax return of the concern may be used in determining annual receipts along with other information the office deems relevant.(5) Number of employees. Where the size standard is "number of employees" size eligibility requires that the concern may not exceed the number of employees in that standard.(a) "Number of employees" means that average employment of the concern, including the employees of its domestic and foreign affiliates, based upon employment during each of the pay periods for the preceding completed twelve calendar months.(b) In computing average employment, part-time and temporary employees are counted as full-time employees for each applicable pay period.(c) If a concern has not been in business for twelve months, "number of employees" means the average employment of the concern, including its affiliates, during each of the pay periods during which it has been in business.