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How is the Business and Occupation amount on the WA liability worksheet calculated?

Overview

You are reviewing your Liability Worksheet for Washington state and see B&OHoverTT.png tax. However, this is not listed in your Admin Console transactions, and you want to know how the B&O amount is assessed.

Environment

Avalara Returns

WA

Resolution

  • Washington state B&O tax is a Gross Receipts Tax measured on the value of products, gross proceeds of sale, or gross income of the business.
  • By system default, AvaTax uses Retailing and Wholesaling rates to calculate B&O.
    • The Retailing rate is used on taxable sales.
    • The Wholesaling rate is used on nontaxable sales.
    • If you require different classifications and rates to be used, please contact our Support team so that our Returns team can be notified of this.
      • We will replace the defaults with your specifications and use that each filing cycle to calculate your B&O amounts.
      • This is only applicable for Major B&O Classifications.
        • If you require Specialized B&O Classifications, it is suggested the return is handled with an alternative solution such as filing in-house as this is not yet supported by AvaTax.
  • Avalara does not have a specific filing calendar for the WA B&O taxes.
  • If you see B&O taxes listed in your liability worksheet, it is because your company coordinated with the Avalara Compliance department to allow Avalara to calculate, add the B&O amount to the WA Multipurpose liability worksheet amount, and remit the B&O taxes along with your WA Sales and Use Tax return.
  • The B&O tax is not applied to individual transactions, so it is not shown on the transactions in the Admin Console.

Note: If B&O has already been added to your worksheet and additional transactions are added after the fact, or if any of your transactions have tax amount/rate overrides, this will cause B&O to be recalculated at the time of filing your return. This will either cause a pull of additional funds or a refund at the end of the filing cycle, depending on if the B&O amount was raised or lowered.

 

Next Steps

For more information on B&O tax please see the Washington State Department of Revenue website.