State Business and Occupation (B&O) Tax
What is the business & occupation tax?
The state B&O tax is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business.
Washington, unlike many other states, does not have an income tax. Washington's B&O tax is calculated on GROSS income from activities. This means there are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business.
Lines 1 - 5
Locate the B&O tax classification for your business on line(s) 1 - 5.
- On the line for the appropriate B&O tax classification, write the gross income from your business activities under Gross Amount.
- You may qualify for deductions. Write the total deductions in the Deductions box, on the line for the appropriate B&O tax classification. Deductions must be itemized on the deduction detail, page 3. Calculate your total deductions.
- On page 1, subtract the Deductions from the Gross Amount and write that number under Taxable Amount.
- Multiply each taxable amount by the rate shown and write the amount under Tax Due.
- Add Tax Due amounts (lines 1-5) and write the total on line 21.