B&O tax

Overview

The B&O tax is a gross receipts tax, assessed against an entity for conducting business in Washington. It applies to the gross income of the business. No deduction is allowed for labor, materials, taxes, or other costs of doing business.

The appropriate B&O tax classification depends on the nature of the business activity. Different tax classifications with different rates apply for various business activities. Businesses performing more than one activity may be subject to tax under one or more B&O tax classifications.

The state B&O tax is reported on the Department of Revenue’s excise tax return. The department assigns a reporting frequency for filing returns based on estimated yearly tax due and type of business. A business will be required to report on a monthly, quarterly, or annual basis.

Bail bond business

Income earned by bail bond agencies is generally subject to B&O tax under the Service and Other Activities classification and/or the Insurance Producers classification as described below.

Insurance Producers
Commissions from sales of insurance products under a license issued under title 48 RCW are subject to B&O tax under the "Insurance Producers; Title Insurance Agents; Surplus Line Broker Commissions" classification. Sales of surety bonds are an example of income that is typically taxable under this classification. For additional information about the taxation of sales of insurance products, see WAC 458-20-164.

Service and Other Activities
This B&O tax classification covers business income that does not require a license from the Office of the Insurance Commissioner to earn. Sales of property bonds are an example of income that is typically taxable under this classification.

A bail bond agency that provides both types of services above must segregate and report their income appropriately.

Other business

Retail Sales: Sales or rentals of tangible personal property to consumers are subject to B&O tax under the “retailing” classification. For more information about retail sales, see RCW 82.04.050 and RCW 82.04.250.

References

RCW 82.04.220
RCW 82.04.260
RCW 82.04.280
RCW 82.04.290
WAC 458-20-224
Det No. 10-0192, 30 WTD 5 (2011)

In addition to state B&O tax, some Washington cities impose a B&O tax. The Department of Revenue does not administer the city B&O taxes. Therefore, you must contact each city or town in which you conduct business for their specific tax reporting requirements.