Please refer to the following tables for an example of taxes owed by three different child care businesses. Because it does not cover every situation, please call the Department of Revenue if you have any questions.
Child Care A: A small, in-home day care. The child care business makes approximately $2,000 per quarter for two preschool-aged children and $500 per quarter for two children over eight years old. The business does not make retail sales. The home is being purchased by the child care business.
Child Care B: A Pasco child care facility with 25 children, including those requiring all-day care and after-school care, ranging from six months to 10 years old. The day care makes approximately $4,500 from children under eight and $5,250 from older children each month. The owner purchased a $500 piece of playground equipment in Oregon without paying Washington sales tax. The business is purchasing the land and building.
Child Care C: A nonprofit church child care operator provides care in a facility qualifying for exemption from property tax. The business makes $12,000 per year for the care of children over eight and $2,000 per year for the care of younger children. The business does not make retail sales.
|Child care A||Child care B||Child care C|
|Need to register with the Department of Revenue?||No. The business makes approximately $2,500 per quarter or $10,000 per year in gross income. This is less than the $12,000 per year minimum gross amount.||Yes. The child care facility's gross income is approximately $9,750 per month or $117,000 per year, exceeding the minimum gross amount.||No. Income from day care provided in a property tax exempt church facility is exempt from B&O tax. Registration with other state agencies may be required.|
|Pay Business and Occupation (B&O) tax?||No. This business is not required to be registered with the Department of Revenue.||No. The tax due qualifies for the Small Business B&O Tax Credit. The business must still report the tax due before the credit is taken against the amount owing.||No. Income from day care provided in a property tax exempt church facility is exempt from B&O tax.|
|Pay retail sales or use tax?||Yes. Retail sales or use tax must be paid on all goods, except unprepared food products, used by the business.||Yes. Retail sales or use tax must be paid on all goods, except unprepared food products, used by the business. Use tax is due on the equipment bought without paying Washington sales tax.||Yes. Retail sales or use tax must be paid on all goods, except unprepared food products used by the child care facility.|
|Pay property tax on buildings and real estate?||Yes. The home is being purchased.||Yes. The business is buying its facility.||No. The business filed an application with Revenue's Property Tax Division and was granted an exemption.|
|Pay personal property tax?||Yes, on the equipment, furniture, etc., used in the business. However, the business, as a sole proprietorship, may be eligible for a $3,000 head of household exemption.||Yes. The business is responsible for personal property tax on items used in the business.||No. The business filed an application with Revenue's Property Tax Division and was granted an exemption.|