Real estate firms and other businesses may provide property management services to owners of residential or commercial properties. They are primarily responsible for renting or leasing properties, however they may also coordinate routine maintenance and minor repairs.
Gross income for property management services is subject to business and occupation (B&O) tax under the Service and Other Activities classification.
Everyone who uses personal property in a business (in Washington) must complete a personal property tax listing form. This listing must be filed with your county assessor’s office by April 30th of each year. Examples of personal property used in conducting business include, but are not limited to:
Mortgage brokers generally work with home buyers to determine the type of mortgage they need and find a lender that matches those needs.
See our Mortgage brokers guide for information on the taxability of these services.
Real estate firms may charge brokers for providing space (desk fees) and other resources (shared expenses) such as telephones, advertising, multiple listing services, and office supplies. These charges may be a fixed amount per month or may be computed as a percentage of commissions or percentage of sales.
A real estate firm is a sole proprietorship, partnership, limited liability partnership, corporation, limited liability company, or other legally recognized business entity conducting real estate brokerage services in this state and licensed as a real estate firm.
Real estate firms are required to pay business and occupation (B&O) tax on the gross commission earned by the firm, including the commission paid to brokers (commonly referred to as agents), managing brokers, and designated brokers.
Real estate brokers (commonly referred to as agents), managing brokers, and designated brokers perform real estate brokerage services for real estate firms and are required to be licensed in this state.
Intended audience: Real estate firms, including brokers, managing brokers, and designated brokers.
Starting with excise tax returns for 2025, a new real estate commissions business and occupation (B&O) tax classification is on the excise tax return. Before 2025, real estate commissions were reported under the service and other activities B&O tax classification.
Throw-out income is a component of the receipts factor that is excluded from the denominator if both the following are true:
See the Apportionment – the basics section for more information on taxable in another state.
Example A
Company A is an in-state entity reporting under the Service & Other Activities B&O tax with the following receipts:
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