Business and occupation tax

The business and occupation (B&O) tax is a gross receipts tax assessed on the value of products, gross proceeds of sale, or gross income of a business. There are no deductions for labor, materials, taxes, travel expenses, or other costs of doing business.

The B&O tax rate varies depending on the business activity. There are over 30 B&O tax classifications. Generally, interior decorators, designers, and consultants report under the following tax classifications:

Service and other activities

If you provide professional or personal services, you must report your gross income under the Service and Other Activities B&O tax classification. Examples include:

  • Interior decorators and designers

  • Consultants

  • Architects

  • Engineers


If your business makes retail sales (sales of goods to consumers or sales of certain services classified by law as retail activities to consumers), you must report your gross proceeds from those sales under the Retailing B&O tax classification. Examples of retail activities include:

  • Painting, hanging wallpaper, and other decorating for consumers

  • Selling furniture, fabric, paints, etc., to consumers

  • Renting furniture and other tangible personal property to consumers


If your business sells goods or services that will be resold by the buyer in the regular course of business, you are making wholesale sales. Sales tax is not collected on wholesale sales. However, the buyer must give you a copy of their reseller permit that you must keep in your records to document the wholesale sale. You must report the gross proceeds of such sales under the Wholesaling B&O tax classification.

Examples of wholesale activities include:

  • A subcontractor performing painting, drywall, electrical, etc., services for a general construction contractor (but not a speculative builder).

  • Selling materials or items (paint, fabric, furniture, etc.) to someone that will resell them to the ultimate consumer.

Small business B&O tax credit

The Small Business B&O Tax Credit can reduce or eliminate the B&O tax liability of businesses that earn a limited amount of income.