Dore, J.
The critical facts are not in dispute in these consolidated cases. J. C. Penney Company, Inc. (Penney) operates over 50 retail stores in Washington, including one in Tacoma. A Penney customer who wishes to obtain a [40]*40charge card may fill out a "Credit Agreement" application, obtained at a local store or in a Penney catalog. The completed application may be mailed directly to Penney’s regional credit office in Portland, Oregon (Portland office), or returned to the local store (which forwards one copy to the Portland office and another copy to a Washington credit bureau designated by the Portland office), or, in the case of a catalog application, sent directly to the catalog center in Wisconsin. Local stores are staffed with credit-layaway associates who answer questions about the application and otherwise aid in the filling out of the application. Local store employees are encouraged to solicit credit card applications which, the record discloses, boosts retail sales. The Portland office determines, after receiving the credit history of the applicant from the Washington credit bureau, whether the applicant will receive a charge card. If the application is approved, the Portland office establishes the customer's credit limit. The Credit Agreement is governed by Washington law.
When a Penney's charge card is offered for payment at a local store, the cashier will check for authorization through a computer terminal which is linked to the Portland office computer. If the computer refuses the purchase, the customer is directed to the credit-layaway associate who calls the Portland office and provides updated credit information, if any, supplied by the customer. The Portland office determines whether to authorize the purchase and relays this decision to the credit-layaway associate who informs the waiting customer.
A charge card holder receives a monthly statement indicating the purchases made during the prior billing period. The customer may pay the amount owed in full or may pay in monthly installments. If the latter is elected, a service charge will be assessed on the deferred balance. The billing on credit card accounts is handled through the Portland office, including assessment of the service charge. The monthly statements are mailed directly to the customer; a return envelope to the Portland office is supplied. Custo[41]*41mers may, alternatively, deliver their payments to the local store.
If a customer fails to pay the bill, the Portland office directly contacts the customer by mail or telephone. Delinquent accounts are referred to a Washington collection agency selected by the Portland office. If necessary, the collection agency may hire attorneys who litigate in the Washington courts.
The Washington State Department of Revenue (Department) imposed a business and occupation tax (B & O tax), set out at RCW 82.04.2901 on Penney for the period 1966 through 1974 seeking to tax service charge income received by Penney on credit sales to Washington residents. Penney protested. The Board of Tax Appeals (Board) reversed the Department, holding Penney's activities outside the reach of that tax. The Board also held that the assessment violated the due process and commerce clauses of the United States Constitution. The Superior Court for Thurston County affirmed the Board. This appeal followed.
The City of Tacoma (Tacoma) assessed its B & O tax, Tacoma Municipal Code 6.68.220(i)2 on Penney's service [42]*42charge income generated from January 1972 through September 1977 on activity at Penney's Tacoma store. Penney brought suit to recover the tax paid. The Superior Court for Pierce County granted Penney's motion for summary judgment directing Tacoma to refund the tax and enjoining further assessment. This appeal followed.
We reverse the courts below, reinstate the imposition of the taxes, and remand to the lower courts for a determination of the proper apportionment formula.
The B & O tax in question3 was designed to tax all business activities within the state which have not otherwise been taxed. The State imposed its B & O tax upon Penney's income derived from finance charges. Penney argues that its finance charge income is beyond the ken of the tax because all activities relating to Penney's imposition of the finance charge take place in Oregon. The State concedes it has no authority to tax income earned outside of Washington; however, it contends that Penney's activities in this state give rise to the finance charge. The parties agree as to the specific services which are provided by the local Penney stores as well as those provided through the Oregon office. Thus, a single question is posed: Which activities of Penney's give rise to the finance charge? Our answer is that all of Penney's activities relating to the sale on credit give rise to the finance charge. Some of these activities are subject to the Washington tax at issue, others are not. We elaborate below.
In order to be subject to the tax in question, Penney must, within Washington, engage in some business activity, including rendering a service, other than a sale at retail. The servicing of installment (credit) accounts was held to [43]*43be such a business activity in Rena-Ware Distribs., Inc. v. State, 77 Wn.2d 514, 463 P.2d 622 (1970), and the resulting service charge income was taxable under RCW 82.04.290. Penney views the subject cases as the "flip side" of Rena-Ware. We do not agree.
In Rena-Ware, door-to-door salesmen offered goods for sale to out-of-state persons. At the time of purchase, the buyer had the choice of paying in cash or establishing a credit account, thereby accruing a service charge. All activities relating to the credit sale — credit approval, bookkeeping and billing — were performed in Rena-Ware's home office in Washington. In discussing whether or not these local activities were taxable, the court noted that it was legislative intent, as expressed in RCW 82.04.220, to tax all business activity not yet subjected to a B & O tax. The servicing of credit accounts was a business activity which the taxpayer engaged in locally; it gave rise to a finance charge which was income; this income was not otherwise taxed.
The business activity of servicing installment accounts falls naturally within this definition, and it is our conclusion that the legislature intended that this activity should be taxed under this section . . .
Rena-Ware, at 517. Thus, Rena-Ware distinguished the cash sale from the credit sale.
When cash is not paid for a purchase, a service charge, designated as such, is added to the purchase price. The service charge is the same, regardless of the amount of the unpaid balance.
Rena-Ware, at 515. If a sale is made on credit, the income derived from the service charge is taxable. The business activities which give rise to that service charge are those activities relating to the privilege of making the purchase on credit. Although, in
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Dore, J.
The critical facts are not in dispute in these consolidated cases. J. C. Penney Company, Inc. (Penney) operates over 50 retail stores in Washington, including one in Tacoma. A Penney customer who wishes to obtain a [40]*40charge card may fill out a "Credit Agreement" application, obtained at a local store or in a Penney catalog. The completed application may be mailed directly to Penney’s regional credit office in Portland, Oregon (Portland office), or returned to the local store (which forwards one copy to the Portland office and another copy to a Washington credit bureau designated by the Portland office), or, in the case of a catalog application, sent directly to the catalog center in Wisconsin. Local stores are staffed with credit-layaway associates who answer questions about the application and otherwise aid in the filling out of the application. Local store employees are encouraged to solicit credit card applications which, the record discloses, boosts retail sales. The Portland office determines, after receiving the credit history of the applicant from the Washington credit bureau, whether the applicant will receive a charge card. If the application is approved, the Portland office establishes the customer's credit limit. The Credit Agreement is governed by Washington law.
When a Penney's charge card is offered for payment at a local store, the cashier will check for authorization through a computer terminal which is linked to the Portland office computer. If the computer refuses the purchase, the customer is directed to the credit-layaway associate who calls the Portland office and provides updated credit information, if any, supplied by the customer. The Portland office determines whether to authorize the purchase and relays this decision to the credit-layaway associate who informs the waiting customer.
A charge card holder receives a monthly statement indicating the purchases made during the prior billing period. The customer may pay the amount owed in full or may pay in monthly installments. If the latter is elected, a service charge will be assessed on the deferred balance. The billing on credit card accounts is handled through the Portland office, including assessment of the service charge. The monthly statements are mailed directly to the customer; a return envelope to the Portland office is supplied. Custo[41]*41mers may, alternatively, deliver their payments to the local store.
If a customer fails to pay the bill, the Portland office directly contacts the customer by mail or telephone. Delinquent accounts are referred to a Washington collection agency selected by the Portland office. If necessary, the collection agency may hire attorneys who litigate in the Washington courts.
The Washington State Department of Revenue (Department) imposed a business and occupation tax (B & O tax), set out at RCW 82.04.2901 on Penney for the period 1966 through 1974 seeking to tax service charge income received by Penney on credit sales to Washington residents. Penney protested. The Board of Tax Appeals (Board) reversed the Department, holding Penney's activities outside the reach of that tax. The Board also held that the assessment violated the due process and commerce clauses of the United States Constitution. The Superior Court for Thurston County affirmed the Board. This appeal followed.
The City of Tacoma (Tacoma) assessed its B & O tax, Tacoma Municipal Code 6.68.220(i)2 on Penney's service [42]*42charge income generated from January 1972 through September 1977 on activity at Penney's Tacoma store. Penney brought suit to recover the tax paid. The Superior Court for Pierce County granted Penney's motion for summary judgment directing Tacoma to refund the tax and enjoining further assessment. This appeal followed.
We reverse the courts below, reinstate the imposition of the taxes, and remand to the lower courts for a determination of the proper apportionment formula.
The B & O tax in question3 was designed to tax all business activities within the state which have not otherwise been taxed. The State imposed its B & O tax upon Penney's income derived from finance charges. Penney argues that its finance charge income is beyond the ken of the tax because all activities relating to Penney's imposition of the finance charge take place in Oregon. The State concedes it has no authority to tax income earned outside of Washington; however, it contends that Penney's activities in this state give rise to the finance charge. The parties agree as to the specific services which are provided by the local Penney stores as well as those provided through the Oregon office. Thus, a single question is posed: Which activities of Penney's give rise to the finance charge? Our answer is that all of Penney's activities relating to the sale on credit give rise to the finance charge. Some of these activities are subject to the Washington tax at issue, others are not. We elaborate below.
In order to be subject to the tax in question, Penney must, within Washington, engage in some business activity, including rendering a service, other than a sale at retail. The servicing of installment (credit) accounts was held to [43]*43be such a business activity in Rena-Ware Distribs., Inc. v. State, 77 Wn.2d 514, 463 P.2d 622 (1970), and the resulting service charge income was taxable under RCW 82.04.290. Penney views the subject cases as the "flip side" of Rena-Ware. We do not agree.
In Rena-Ware, door-to-door salesmen offered goods for sale to out-of-state persons. At the time of purchase, the buyer had the choice of paying in cash or establishing a credit account, thereby accruing a service charge. All activities relating to the credit sale — credit approval, bookkeeping and billing — were performed in Rena-Ware's home office in Washington. In discussing whether or not these local activities were taxable, the court noted that it was legislative intent, as expressed in RCW 82.04.220, to tax all business activity not yet subjected to a B & O tax. The servicing of credit accounts was a business activity which the taxpayer engaged in locally; it gave rise to a finance charge which was income; this income was not otherwise taxed.
The business activity of servicing installment accounts falls naturally within this definition, and it is our conclusion that the legislature intended that this activity should be taxed under this section . . .
Rena-Ware, at 517. Thus, Rena-Ware distinguished the cash sale from the credit sale.
When cash is not paid for a purchase, a service charge, designated as such, is added to the purchase price. The service charge is the same, regardless of the amount of the unpaid balance.
Rena-Ware, at 515. If a sale is made on credit, the income derived from the service charge is taxable. The business activities which give rise to that service charge are those activities relating to the privilege of making the purchase on credit. Although, in Rena-Ware, some of these activities took place out of state, there were sufficient ties with Washington to subject the service charge income to the B & O tax.
In accordance with the holding in Rena-Ware, we must, first, acknowledge that the servicing of Penney's credit [44]*44accounts is taxable activity; second, identify the activities relating to sales for credit, rather than sales made for cash; and, third, identify the situs of those activities as within or without Washington.
As described above, the activities relating to the credit sales which occur outside of Washington are generally those involving credit approval, billing and bookkeeping. The parties agree that the following credit sales activities occur in Washington:
1. 100 percent of the retail credit sales underlying the finance charges were made at Washington stores.
2. Employees of Penney's at the Washington stores assisted customers in applying for credit privileges.
3. The Portland credit office's provisional decision to not authorize a credit sale may be reversed (by Portland personnel) after an employee in the Washington store telephones Portland with additional credit information.
4. Washington Penney stores receive payments from customers on credit accounts (although the great majority of customers send such payments directly to Portland).
5. Washington companies are hired to collect delinquent accounts.
6. Washington laws concerning consumer protection and usury apply to the underlying credit sale and imposition of the finance charge.
7. Washington courts are being used to settle disputes.
It is the credit sale which places Penney in the position of potentially receiving a finance charge. The local activities which promote the sale on credit are sufficient to bring the finance charge income within the taxing statute. If all purchasers who buy on credit pay their accounts within 30 days and thereby avoid incurring a finance charge, then the measure of tax will be zero. The credit sale is the triggering business activity; the imposition of Penney's finance charge is the measuring device by which the State can assess its B & 0 tax. All activities which establish credit status for customers, as well as the credit sale itself and those services provided to customers in the Portland office, are business activities which give rise to the finance charge. Rena-Ware [45]*45did not discuss the type of credit arrangement that is before the court in the subject case. It is the local activities which must be assessed in light of the taxpayer's entire operation and business presence in the state. A traveling salesman selling cookware is hardly in the same retailers' league as is Penney. What served in Rena-Ware as local activities which subjected the finance charge income to the B & 0 tax does not preclude different local activities from serving the same purpose. Penney's presence in Washington cannot be compared to a single door-to-door salesman traveling from one town to another. Those accounting methods used by the seller in Rena-Ware are not necessarily the only activities which give rise to a finance charge in every case.
The West Virginia Supreme Court has held, on substantially identical facts,4 that Penney's finance charge income was the result of credit activity which took place in West Virginia, notwithstanding the fact that the credit approval, billing and bookkeeping relating to the finance charge occurred outside of that state. J.C. Penney Co. v. Hardesty, 264 S.E.2d 604 (W. Va. 1979). It held that the finance charge income was taxable under a West Virginia statute described as a
business and occupation tax imposed on income from finance charges . . . levied upon a service business not [46]*46otherwise specifically taxed.
Hardesty, at 618 (Miller, J., concurring). Penney attempts to distinguish Hardesty because that case was decided upon constitutional grounds, whereas the subject case involves statutory construction. This so-called distinction begs the very question before both courts. It is true that the analysis in Hardesty turns on whether the tax imposed is constitutionally permissible; however, one does not reach the constitutional question without the initial determination that the imposition of the West Virginia tax on Penney's finance charge income was proper. The credit activities which occurred in West Virginia were sufficient to give rise to that finance charge. The fact that the mechanical imposition of the service charge occurred outside of West Virginia did not sway that Supreme Court. It similarly has not influenced us.
Department of State Revenue v. J.C. Penney Co., _ Ind. App. _, 412 N.E.2d 1246 (1980), also relied on by Penney, is distinguishable. Penney is a nonresident of Indiana; the service charge income is considered an intangible in Indiana. The presumption (as reflected in the Department of Revenue's regulations, see Department of State Revenue v. J.C. Penney Co., supra at 1251-52) that income of a nonresident received from intangibles is not taxable under the gross income tax. In order to rebut this, it must be shown that such intangible obtained legal situs within Indiana by being an integral part of the in-state business. The Indiana court concluded that the generation of service charges did not meet this test. In other words, the legal situs of the intangible remained out of state and not subject to tax.
The Indiana Court of Appeals held that
the facts in this case support the trial court's conclusion that Penney's local credit service activities were remote and minimal in comparison to the overall interstate character of the transaction.
(Italics ours.) Department of State Revenue v. J.C. Penney Co., supra at 1252. In describing the state law on activity [47]*47considered integral to a business, the court quoted from Department of State Revenue v. Convenient Indus, of America, Inc., 157 Ind. App. 179, 299 N.E.2d 641, 647 (1973) as follows, in part:
"Here, the minimal activities taking place within the State of Indiana with respect to the 'service fee' . . . and with respect to the 'advertising fee' . . . attributable to only a fractional portion of the fee, fall far short of the degree of activity contemplated by the Indiana Gross Income Tax."
(Italics ours.) Department of State Revenue v. J.C. Penney Co., supra at 1251. As explained earlier, the Washington legislature, through RCW 82.04.290, intended to catch all business activity not yet taxed. The degree of activity is what the Indiana court balanced. The question in Washington is whether there is any business activity at all; if interstate in nature, the proper apportionment will be made. We cannot construe the facts before us to support a finding that Penney does not engage in any business activity in Washington which gives rise to a finance charge. Reliance on the Indiana court's conclusion, that insufficient activity was shown to subject the income to that tax, is, therefore, misplaced.
There is no doubt but that Penney engages in interstate commerce. Because we are upholding the imposition of this tax, the question of the alleged violation of the due process and commerce clauses of the United States Constitution must be reached.
The due process clause requires that there be a nexus between the taxing state and the activity sought to be taxed. Mobil Oil Corp. v. Commissioner of Taxes, 445 U.S. 425, 63 L. Ed. 2d 510, 100 S. Ct. 1223 (1980). If the local activities are dissociated from the business activity which is the subject of the tax, then the local tax cannot stand. Norton Co. v. Department of Revenue, 340 U.S. 534, 95 L. Ed. 517, 71 S. Ct. 377 (1951). As demonstrated above, the imposition of the finance charge involves a great deal of Washington activity relating to establishing credit accounts [48]*48and handling local problems relating to that credit account. These in-state activities of Penney are not sufficiently dissociated from its finance charge income to violate the due process clause.
The due process clause also requires that there be a relationship between the income attributable to the State and the intrastate values of the enterprise. The question here is one of apportionment. The State concedes that apportionment is proper. When properly apportioned, the tax will not offend the due process clause.
The commerce clause will not be violated if a state tax which falls on interstate commerce is "designed to make the commerce bear a fair share of the cost of the local government whose protection it enjoys". National Bellas Hess, Inc. v. Department of Revenue, 386 U.S. 753, 18 L. Ed. 2d 505, 87 S. Ct. 1389 (1967). Once again, the question is one of apportionment. As stated above, appellants concede that apportionment is required because some of the activity relating to the finance charge takes place outside of Washington.
There is an allegation that impermissible multiple taxation will result if the Washington tax is upheld, because Penney's service charge income may be taxed by Oregon. The burden is on the taxpayer to show that it is the victim of multiple taxation. The taxpayer has not met this burden; absent the mere assertion that Oregon "may" impose such a tax, there is nothing in the record to support such a claim. In any event, if a multiple tax is shown, the local tax need not fail; rather, apportionment can cure the defect. Department of Revenue v. Association of Wash. Stevedoring Cos., 435 U.S. 734, 55 L. Ed. 2d 682, 98 S. Ct. 1388 (1978).
The lower courts are reversed and the causes remanded for a determination of the proper apportionment formula, the assessment of taxes, and entry of judgment in accordance with the provisions of this opinion.
Rosellini, Stafford, Utter, Hicks, Williams, and Dim-mick, JJ., concur.