Ask SCORE: What is the Washington State B&O Tax?

from the Department of Revenue…

The B&O tax (short for “Business & Occupation Tax”) is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business.

Washington, unlike many other states, does not have an income tax. Washington’s B&O tax is calculated on GROSS income from activities. This means there are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business.

The Business and Occupation (B&O) tax is a gross receipts tax levied on a business for the privilege of doing business in Washington. Almost all businesses located or doing business in the state of Washington are subject to the state B&O tax. It is an out-of-pocket cost for engaging in business activities.

The classification and rate of the B&O tax are based on the type of business activity conducted in this state. A business may perform more than one type of activity. Businesses performing multiple activities may be subject to tax under one or more B&O tax classifications.

Learn more about the Washington State B&O Tax. 

Learn about your city’s B&O Tax rates. 

2 thoughts on “Ask SCORE: What is the Washington State B&O Tax?

  1. Mercae

    So when it shows .0012 it means every dollar you make x .0012 = the amount you owe for taxes? Are city and state taxes paid the same way? How do businesses pay their taxes?

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  2. Ken Sethney Post author

    The article came directly from the Washington State Department of Revenue. It includes a link at the bottom about your city’s B&O tax. As for paying taxes, we suggest that you talk to one of the accountants or bookkeepers listed on the local professionals page under “RESOURCES” in the main menu.

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