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Set Up Washington Returns

This article applies to:Returns Central

Tell Us Where You Collect Tax

Add Washington to the places where you collect tax. This tells AvaTax to calculate tax on Washington transactions. See the Washington State Department of Revenue website for details about nexus, registration, and taxes in Washington.

Before you add Washington, you need to:

You don't have to select a tax type for Washington.

In addition to Sales Tax and Consumers Use Tax, Washington assesses a B&O Tax, which is a gross receipts tax on all Washington sales (including non-taxable sales). This tax is separate from the Washington sales tax that is calculated and shown on the the Approve returns page. The B&O tax is an expense to the business. It's not a sales tax and it's not passed on to consumers. It's shown as an adjustment to the amount due on the return when you view the details from the Approve returns page.

"Sourcing" determines the location where a sale is taxed. Washington is a destination-sourced state.

Add Your Company Locations

Washington doesn't require location reporting on the returns. Add any physical locations you have in Washington to enhance your company setup and track sales by location.

Schedule Your Returns

After you tell us where you collect tax and add locations, you're ready to schedule returns. Go to Returns in AvaTax to provide a funding power of attorney and schedule your returns

Your company name and taxpayer ID from Your Company Details show up on your returns. Make sure they match what’s on your registration information.

Use this info to schedule your returns. Keep in mind that the selections you made when you told us where you collect tax, any location codes you entered, and the forms you select are related and should tie together.

  • Select WA MultiPurpose Sales to report and remit state, local, and B&O tax.
    • If you are an SST subscriber, you can request to add the WA B&O Combined Excise return for your B&O filing requirements by submitting a support case.
  • You must register for a Washington Unified Business Identifier (UBI) account and link it to a MyDOR login
    • Enter your Washington UBI account number as the Registration ID when you schedule the return. It's a nine-digit number broken into three parts. Example: 123-456-789
    • Enter your user ID and password for MyDOR so we can file your returns for you
  • Log into your MyDOR account to confirm your filing frequency. It's important to monitor your account and update your scheduled returns for filing frequency changes, which occur frequently in Washington state.
  • Are you required to pay Litter Tax assessment with your WA Sales Tax return?
    • If you are required to file litter tax on your WA return, answering Yes to this question will enable that calculation.
    • Litter tax will be calculated by multiplying your Washington gross sales against the rate of 0.015%. (Gross Sales x 0.00015 = Litter Tax)
    • This will be added as an adjustment to the amount due on your Washington return.
      • It will not be found in reports or transactions.
    • If you use a different calculation or need a custom Litter tax amount reported, please submit a support case before the locking date of the return in question.
  • Which B&O classication would you like calculated against your Washington nontaxable sales? Please enter 1, 2, 3, 4, OR 5 to select your nontaxable B&O tax rate or select 0 if you are fully exempt from paying B&O tax altogether.
    • B&O tax rates vary by classification. By default, Washington taxable sales are calculated against Retailing at the 0.471% rate.
    • Please enter 1, 2, 3, 4, or 5 to apply one of the following tax rates to any non-taxable sales you may have during the month:
      • 1. Royalties - Line 10 (1.5%)
      • 2. Wholesale - Line 11 (0.484%)
      • 3. Services - Line 15 (1.5%)
      • 4. Services with Workforce Education Surcharge - Line 16 (1.75%)
      • 5. Retailing - Line 20 (0.471%).
      • If you are exempt from paying B&O tax in Washington state completely, enter 0 here and we will deduct out all B&O tax for Retailing and Wholesaling using the ‘No Local Activity’ deduction. 
    • If you are unsure which classification applies to you, please contact WA DOR directly to confirm. 
  • HAVE YOU GRANTED THIRD-PARTY ACCESS TO AVALARA’S BULK FILING LOGIN?
    • In order for us to access your Washington UBI Excise Account for filing we’ll need you to grant third-party access to our filing login.
    • For detailed instructions on this process, please see Add Avalara to your WA state DOR account
    • Once you have correctly granted third-party access, please enter ‘YES’ into this field to continue.
  • Reimbursement deduction on Washington return
    On reviewing your WA return, you may notice the deduction type "Advancements Reimbursements Returns & Allow". Te reason for this deduction is as follows:
    • AvaTax automatically calculates and adds this deduction due to a local jurisdiction having a negative sales amount.
      • Both B&O and sales tax sections cannot report negative sales when filing the return on the WA website.
      • The total amount of the deduction should be the sum of all negative local amounts.
        • This amount is also added to the gross sales total to ensure that the tax amounts don't change and  that a negative sales amount is not reported on the Business and Occupation (B&O) page.

Washington Business and Occupation Tax

With the Washington Sales and Use Tax return, most businesses have a requirement to report and remit Business and Occupation (B&O) tax. The state Business and Occupation tax is a gross receipts tax and is measured on the value of products, gross proceeds of sales, or gross income of the business. If you have the WA MultiPurpose Sales form B&O will calculate automatically using the default method described below. If you are an SST subscriber, you can request to add the WA B&O Combined Excise return for your B&O filing requirements by submitting a support case. This form will also use the default method described below. In AvaTax, you may navigate to the Tax Details and Adjustments page of a Washington form to see the Washington B&O adjustment included with your tax liabilities.

Default B&O Calculation

B&O tax rates vary by classification and your required classification to be reported depends on the type of business you participate in. Please see https://dor.wa.gov/taxes-rates/business-occupation-tax for more information about B&O tax. In AvaTax, we have determined a default calculation method that allows us to report basic B&O data: 

  • Your Washington taxable sales will be reported under the Retail classification on line 20 at 0.471%.
  • Your Washington nontaxable sales will be reported under the Wholesale classification on line 11 at 0.484%.
  • If applicable, a Small Business Credit will apply.

Automated Calculation Alternatives

We understand that our default calculation method for B&O does not apply to every business, so we have provided alternatives to change this calculation automatically based on your input. Please note that this only changes the calculation method for your Washington nontaxable sales. If you need to apply a different calculation to your Washington taxable sales, please see Manual Calculation Alternatives

When scheduling your Washington form, you will be prompted to provide a numerical value for the question, "WHICH B&O CLASSIFICATION WOULD YOU LIKE CALCULATED AGAINST YOUR WASHINGTON NONTAXABLE SALES? PLEASE ENTER 1, 2, 3, 4, OR 5 TO SELECT YOUR NONTAXABLE B&O TAX RATE OR SELECT 0 IF YOU ARE FULLY EXEMPT FROM PAYING B&O TAX ALTOGETHER." Choosing one of the options below will replace the Wholesale calculation with your selection.

  • 1. Royalties - Line 10 (1.5%)
  • 2. Wholesale - Line 11 (0.484%)
  • 3. Services - Line 15 (1.5%)
  • 4. Services with Workforce Education Surcharge - Line 16 (1.75%)
  • 5. Retailing - Line 20 (0.471%).
  • 0. If you are exempt from paying B&O tax in Washington state completely, we will deduct out all B&O tax for Retailing and Wholesaling using the ‘No Local Activity’ deduction.

Example: Using $100,000.00 as Washington taxable sales and $50,000.00 as Washington nontaxable sales. If you were to choose option 3, B&O calculation would look like the following:

100,000.00 * 0.00471 = $471.00 Retail B&O

50,000.00 * 0.015 = $750.00 Services B&O

Manual Calculation Alternatives

If the default calculation or automated calculation alternatives do not suit your business needs, our Compliance team may be able to perform manual adjustments to include your required classifications. Please contact our Support team to create a case so that we may learn more about your filing requirements. 

 

NOTES: 

  • 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.
  • At this time, filing B&O in local jurisdictions such as Seattle is supported only with the Managed Returns Premium service.
    • For more information on Managed Returns Premium services, please contact your Customer Account Manager.

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