Active non-reporting

Businesses that meet certain criteria may be eligible for active non-reporting status. If your business is assigned active non-reporting status, you are considered to be actively doing business in Washington, but you are not required to file tax returns. To qualify, your business must meet all of the following criteria:

• Business activity does not require the collection of retail sales tax.

• Gross proceeds of sales, gross income, or value of products for all business and occupation tax classifications is less than $28,000 per year; or $46,667 per year for persons generating at least fifty percent of their taxable amount from activities taxable under RCW 82.04.255, 82.04.290(2)(a), and 82.04.285.
  Note: Income from tax exempt activities such as farming, nonprofit fundraising and rental of real estate, or business income received by enrolled tribal members when conducting business on the reservation of which they are a member, is not included in either the $28,000 or the $46,667 amounts.

• Gross income of the business for all public utility tax classifications is less than $24,000 per year.

• The business does not owe any other tax or fee to the Department of Revenue.

 

How can I change my filing status to active non-reporting?

If your business is currently assigned a monthly, quarterly, or annual filing status and you think your business would qualify for active non-reporting, please contact us.

 

What should I do if I exceed the limit?

It is your responsibility to maintain proper financial records and notify the Department if your business exceeds the $28,000 or $46,667 business and occupation and/or $24,000 public utility threshold for active non-reporting status.  If at any time your gross income exceeds this threshold, a tax return must be filed and any tax due paid.  Late filing and payment will cause penalties and interest to be assessed.

Call the Business Registration section at (360) 705-6211 or contact your local Department of Revenue field office if your account exceeds the thresholds.  Your account will be assigned a reporting frequency and you will be sent tax returns to report your taxes.

Do I have other responsibilities?

Businesses have a number of rights and responsibilities in regard to their tax obligations.  One of your most important responsibilities is to notify the Department of changes that require an update on your account.  In addition to the change noted above, other changes may include:

• new mailing address or business location

• new telephone number

• new partners or corporate officers

• closing date if you cease to do business in Washington State

You can notify the Department of any changes to your business' status

• online

• by calling our Telephone Information Center at 1-800-647-7706 or

• by contacting a local field office. 

See Taxpayer Rights and Responsibilities.

What is considered a retail sale?

Businesses that make retail sales must file tax returns.  Example of retail sales include:

• repairing, installing, altering, decorating, cleaning, constructing, or improving real or personal property for customers

• providing specific personal services, including:

  • fitness testing and training

  • aerobic classes

  • tanning and tattoos

  • steam and Turkish baths

  • escort and dating service

• providing specific consumer services, including:

  • landscape maintenance

  • horticultural services

  • clearing land and moving earth

  • service charges for professional sports tickets

  • rental and leasing of personal property

  • rental of equipment with operator

  • towing and automobile parking

  • lodging (less than 30 days)

  • amusement activities such as golf, billiards, bowling, etc.

  • charges for abstract and title insurance, escrow and credit bureaus, and tenant screening

Businesses performing any of these transactions are required to be registered, and collect and remit retail sales tax on their tax returns.  If you have any questions about whether you should collect retail sales tax or if you feel you do not qualify for the active non-reporting status, please contact us immediately. You will be assigned a reporting frequency and begin receiving tax returns.

What if I owe use tax?

To pay use tax:

• Online: Try our free, secure online application. It guides you through simple filing steps and gives you several payment options.

• By paper: Complete and mail a Consumer Use Tax Return. (pdf)

Who should I contact for more information?

Washington Department of Revenue
Business Registration Section
PO Box 47476
Olympia, WA  98504-7476

(360) 705-6211