Private preschools and kindergartens

Tuition

Nursery schools, preschools, and private kindergartens do not have to pay business and occupation (B&O) tax on income earned from caring for children under eight years old who are not in first grade or above.

You must include these amounts in gross income reported under the Child Care classification and then take an “Other” deduction with a description such as “Privately operated kindergartens, preschools, etc.”

You may not deduct amounts received for children eight years or older or enrolled in or above the first grade.

Sales of tangible personal property

Income received from sales of tangible personal property (such as books, school supplies, and uniforms) or any separate charges to students for such items is subject to B&O tax under the Retailing classification, and you must collect retail sales tax.

If the school does not separately charge for such items, then the school is considered the consumer of the items provided to the students and must pay retail sales tax or use tax on them.

References

• RCW 82.04.4282 Deductions – Fees, dues, charges
• WAC 458-20-167 Educational institutions, school districts, student organizations, and private schools