Washington’s Business and Occupation (B&O) tax is a gross‑receipts tax, which means it’s based on revenue rather than profit. This can surprise new retailers, so here’s what you need to know.
Who must pay? Most businesses operating in Washington owe B&O tax. Retailers pay under the “retailing” classification.
Tax rates and credits. The rate for retailing is currently 0.471 %. There are credits and deductions for specific activities, like bad debt write‑offs and trade‑ins.
Filing frequency. The Department of Revenue assigns filing frequency (monthly, quarterly or annually) based on your business’s revenue. Submit returns through the state’s online portal.
Calculating the tax. Multiply your gross receipts by the tax rate. If you make $100,000 in sales, you owe $471. Keep detailed records of revenue streams; misclassification can lead to penalties.
Local considerations. Cities like Seattle have their own taxes, such as the Square Footage Business Tax. Understand all local obligations.
By following this “Washington B&O tax guide for retailers,” you’ll avoid surprises and stay compliant.
