Washington B&O law
Review the questions and answers below to better understand your compliance responsibilities related to Washington State Business & Occupation Tax.
- What is the business and occupation (B&O) tax?
The Washington State B&O 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 the 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.
- What is the B&O tax rate?
The B&O tax rate varies by classification. Once you know which classification your business fits into, you can find the rate that corresponds to your classification on the WA list of B&O tax rates.
- If I am a qualified SST seller, am I required to pay B&O Tax?
It depends. As of Jan. 1, 2020, a business must register to report B&O tax and submit applicable sales tax if the business meets any of the following thresholds in the current or prior year:
- Has physical presence (nexus) in Washington
- Has more than $100,000 in combined gross receipts sourced or attributed to Washington
- Is organized or commercially domiciled in Washington
- If I am not a qualified SST seller, am I required to pay B&O Tax?
Yes. A business with non-qualified SST status either has a fixed place of business in a state, more than $50,000 worth of property, or more than $50,000 in payroll. Any one of those three activities would trigger nexus for a business in the state of Washington.
- Will the B&O tax be filed on my SST Simplified Electronic Return (SER)?
No, the B&O is a tax on gross receipts. The SER only reports on sales and use tax.
- How do I pay the B&O tax?
The B&O tax is reported and paid on the excise tax return or by electronic filing to Washington state. This needs to be paid by the 20th of each month to match to the electronic Streamlined Sales Tax Simplified Electronic Return, which is filed monthly.
- Can Avalara file the B&O tax on my behalf?
Yes. You can engage Avalara to file and remit the B&O Tax Return monthly for a filing fee.
- Where can I find out more information on the B&O tax?
In order to properly set up your B&O return, Avalara needs your login ID and password to Washington's Department of Revenue (DOR) website.
- If you have a login and a password for Washington state's DOR website, please add them to the SST application.
- If you don't recall your login and password, retrieve your login ID or retrieve your password.
- If you're not registered to file Washington B&O taxes but want Avalara to file on your behalf, we'll contact you after the SST registration is complete to assist you.
- You also need your Account/UBI number and Pre-assigned Access Code (PAC). This code can be found on your Washington DOR welcome letter to new businesses. Here's an example.