State Business and Occupation (B&O) 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 lines 1 - 5.
On the line for the appropriate B&O tax classification, write the gross income resulting from your Washington business activities in the Gross Amount box.
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, pages 3 & 4.
On page 1, subtract the Deductions from the Gross Amount and write the number in the Taxable Amount box.
- Multiply each Taxable Amount by the rate shown and write the amount under Tax Due. Add Tax Due amounts (lines 1 - 5) and write this amount on line 22.