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B&O tax classifications specific for agriculture

The B&O tax contains classifications and preferential rates for certain activities (listed below) of the agricultural community. Farmers who perform these activities should report that income under the appropriate classification. Each classification is followed by the applicable RCW. Chapter 82.04 RCW

Special manufacturing classifications

  • Manufacturing wheat into flour; barley into pearl barley; soybeans into soybean oil; canola into canola oil, canola meal, or canola byproducts; or sunflower seeds into sunflower oil. The special manufacturing B&O tax classification only applies to the manufacturing of the whole-grain items listed above. RCW 82.04.260
  • Splitting or processing dried peas. RCW 82.04.260
  • Manufacturing seafood products that remain in a raw, raw frozen, or raw salted state at the completion of the manufacturing. RCW 82.04.260.
  • Manufacturing by canning, preserving, freezing, processing, or dehydrating fresh fruits and vegetables. RCW 82.04.260.
  • Manufacturing dairy products. The dairy products must be identified as of September 20, 2001, in 21 C.F.R. (Code of Federal Regulations), chapter 1, parts 131, 133, and 135. The special B&O tax rate includes byproducts from the manufacturing of dairy products, such as whey and casein. RCW 82.04.260.
  • Slaughtering, breaking and/or processing perishable meat products and/or selling these products at wholesale. RCW 82.04.260. This classification combines manufacturing and nonmanufacturing activities into a single taxable business activity.

Special warehousing classification

Operating a cold storage warehouse. RCW 82.04.280.

  • A "cold storage warehouse" means a storage warehouse used to store fresh and/or frozen perishable fruits or vegetables, meat, seafood, dairy products, or fowl, or any combination thereof, at a desired temperature to maintain the quality of the product for marketing.
  • A "storage warehouse" means a building or structure, or any part thereof, in which goods, wares, or merchandise are stored for compensation, except field warehouses, fruit warehouses, fruit packing plants, warehouses licensed under chapter 22.09 RCW, public garages storing automobiles, railroad freight sheds, docks and wharves, and "self-storage" or "mini storage" facilities whereby customers have direct access to individual storage areas by separate entrance.
  • "Storage warehouse" does not include a building or structure, or that part of such building or structure, in which an activity taxable under RCW 82.04.272 (persons warehousing and reselling prescription drugs) is conducted.