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.
Locate the proper tax classification for your business activities.
In column 1, on the line for the appropriate B&O tax classification, write the gross income for your Washington business activities.
You may qualify for deductions. Write the total deductions in column 2. If you have no deductions, write "0" in column 2. If you have deductions, itemize them on the deduction detail (pages 3-4).
Subtract column 2 from column 1. Write this amount in column 3. This is your taxable amount.
- Multiply each taxable amount in column 3 by the rate in column 4 and write this amount in column 5. Total all column 5 Tax Due amounts and write this amount in the Total B&O Tax box.