Business Taxes

The state of Washington does not have a corporate, unitary, or personal income tax. However, Washington businesses are subject to three major taxes.

 

Commercial property tax

Property taxes are administered by the counties, and have state and local components. Rates vary by location and are based on the assessed value of property. Common property tax exemptions include: business inventories; intangibles such as currency, bank deposits, stocks, and bonds; household goods and personal items; certain agricultural, timber, mineral, or metallic products in other states to be transported out of Washington. Snohomish County Assessor’s Office: http://assessor.snoco.org: 425-388-3433

 

Business and Occupation Tax (B&O)

The B&O tax is based on gross receipts. There are several classifications for the B&O tax each with its own rate, based on the type of business activity. Virtually all businesses in WA are subject to B&O tax, including corporations, limited liability companies (LLCs), partnerships, and sole proprietorships, whether nonprofit or for profit. Farming and the sale or rental of real estate that are major activities exempt from B&O tax. Contact WA State Dept. of Revenue.

 

Retail Sales and Use Tax

Businesses in Washington collect and remit retail sales tax on the sale of tangible personal property and certain services. The state sales tax rate is 6.5 percent. Local governments also levy a sales tax. The combined sales tax rates range from 7.0 to 8.9 percent of the selling price, depending on location. Check the WA State Dept. of Revenue and Snohomish County Assessor’s Office.

Use Tax is due on the value of tangible personal property, and some amusement and recreation services, used in the state when retail sales tax has not been paid. For example, use tax is generally due on fixtures and equipment included in the purchase of existing business.

Most frequent exemptions to retail sales and use taxes include:
  • Groceries
  • Prescription drugs
  • Sales to the federal government
  • Newspapers
  • Machinery and equipment used directly in a manufacturing operation
  • Labor and services involved in the installation and repair of the manufacturing machinery and equipment noted above.
  • Miscellaneous Taxes

 

The WA State Dept. of Revenue  collects other state business taxes some of which are below. Contact the WA State Dept. of Revenue for a complete list.

  • Public utility tax
  • Carbonated beverage tax
  • Fish tax
  • Timber tax
  • Tobacco products tax
  • Litter tax
  • Refuse (solid waste) collection tax
  • Hazardous substance tax