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Q:  What deductions can I take against the B&O tax?

A:  Please see our Deduction Definitions page for a complete list of deductions, definitions, and steps for reporting deductions. The deduction amount must first be reported on your excise tax return as part of your gross income and then taken as a deduction.

    Some examples of deductible business activities are:

    • Advancements/Reimbursements
      Amounts received as advancement or reimbursement when the customer or client alone is liable to pay for the procurement of goods and services. The taxpayer making the payment cannot have primary or secondary liability, other than as agent, to pay for the goods and services.
    • Bad Debts
      Amounts previously reported and determined to be uncollectible. The debt must also be written off for IRS purposes.
    • Interstate and Foreign Sales
      Goods sold and delivered to customers outside of Washington, or transportation of persons or goods across state or international boundaries. Documentation is necessary.
    • Returns/Allowances/Cash discounts
      The amount of the selling price on which sales tax has been returned or credited to the purchaser if the gross amount has already been reported for tax purposes.
More information
Deduction definitions
Excise tax returns
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