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Commissions – brokers (agents)
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.
ITA
New B&O tax classification for real estate commissions
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
Throw-out income is a component of the receipts factor that is excluded from the denominator if both the following are true:
- The income is not considered taxable in another state.
- At least some of the activity is performed in Washington.
See the Apportionment – the basics section for more information on taxable in another state.
Receipts factor calculation examples
Example A
Company A is an in-state entity reporting under the Service & Other Activities B&O tax with the following receipts:
Annual reconciliation of apportionable income (ARAI)
Once you have the information necessary to determine the receipts factor for an entire calendar year, you must file an ARAI for each tax classification to correct your reporting and obtain a refund or pay any additional tax due.
Reconciling the small business credit
If your business and occupation (B&O) tax liability is below certain thresholds, you are entitled to the small business credit (SBC). The amount of SBC you may claim varies and is automatically calculated when you file electronically.
Commercial passenger fishing
Commercial passenger fishing generally refers to sport fishing (i.e., guided or charter fishing). Generally, gross income from sport fishing trips is subject to business and occupation (B&O) tax under the Retailing classification, and retail sales tax applies.
For more information, please see our Fishing charters guide.
Watercraft excise tax
Boats used part-time for commercial fishing activities are subject to the Watercraft Excise Tax. The Watercraft Excise Tax is administered by the Department of Licensing. If you have questions about the watercraft excise tax, you may call the Department of Licensing's Vehicle Vessel Division at 360-902-3770.
Sales of fishing rights (individual fishing quotas)
Individual fishing quotas (IFQs) are a type of “catch share” regulated by the U.S. Government. They are permits to harvest specific quantities of fish or shellfish.
IFQ permits held for exclusive use by a person are intangible rights. There are two different business and occupation (B&O) tax treatments for IFQs depending on whether they are leased or sold.
