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Q:  What B&O tax credits are allowed?

A:  Credits are amounts that have been paid to the Department of Revenue and are not due or are granted by the Legislature for specific purposes. Credits are subtracted from the B&O tax due on your excise tax return. Credit Definitions provide detailed instructions for reporting credits on the tax return.

    The major B&O tax credits are:

    • Rural Area Application for B&O Tax Credit on New Employees
    • High Technology B&O Tax Credit
    • Small Business B&O Tax Credit – is available for businesses whose total B&O tax liability is below:
      • $71 for Monthly taxpayers
        $211 for Quarterly taxpayers
        $841 for Annual taxpayers

        The small business B&O tax credit is determined after other B&O tax credits have been applied. It may not exceed the amount of B&O tax due, nor may any unused portion be carried into the next reporting period. To determine your credit refer to a monthly, quarterly or annual Small Business B&O Tax Credit table.
    • Multiple Activities Tax Credit (MATC) – is available to certain manufacturers, extractors, and sellers doing business in Washington. Businesses are eligible for this credit against the state B&O tax for gross receipts taxes paid in another jurisdiction or for taxes paid on multiple activities within Washington.
    • Credits for overpayment of taxes – If you overpay your taxes due to an error, you may be issued a Credit Memorandum for the overpaid amount. The credit can be used for any taxes due (B&O, sales, or use taxes) for any tax period after it is issued, for up to five years. When using a Credit Memorandum, attach a copy of the notice to the tax return.

More information
Excise tax returns
Credit definitions
Rural Area Application for B&O Tax Credit on New Employees
(pdf)
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