Is grant income taxable?
Grant income is generally taxable income. This includes income you receive to prepare studies, white papers, reports, or other services or goods. The tax classification is based on what goods and/or services you will provide. You need to report this type of grant income on your excise tax return.
- You receive grant income to prepare a report. This income is subject to B&O tax under the Service and Other Activities classification.
- You receive grant income. You also provide certain retail goods or services in return. This income is subject to retail sales tax and retailing B&O tax.
If you receive grant income that is strictly gratuitous, such as a gift or donation, you do not owe taxes on that amount. However, there must be a donative or charitable purpose for giving the funds to qualify for this tax deduction (RCW 82.04.4282).
There are more B&O tax exemptions and deductions for certain grant income types. For more information, visit Chapter 82.04 RCW.