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.
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 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.
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.
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.
Generally, commercial fishing operations must pay retail sales or use tax on purchases of watercraft, component parts, and repairs. Use tax applies when sales tax was not paid at the time of purchase.
Retail sales tax and use tax do not apply to sales of the following when primarily used in conducting commercial deep sea fishing operations:
Consumables are goods purchased for use during the normal course of business. Commercial fishers must pay retail sales or use tax on all equipment and supplies unless a specific exemption applies. This includes but is not limited to, bait, bedding, table and kitchen wares, fishing nets, hooks, lines, floats, hand tools, ice, fuel, and lubricants.
Use tax applies when retail sales tax was not paid at the time of purchase.
Income from catching fish in Washington waters (within the three-mile limit) is subject to business and occupation (B&O) tax under the Extracting classification. The taxable amount is based on the value of the fish, which is usually the selling price. Persons performing extracting activities for other extractors are subject to the Extracting for Hire B&O tax upon their gross income from those services.
Your income from sales of fish to resellers in Washington is subject to business and occupation (B&O) tax under the Wholesaling classification when the buyer provides a valid reseller permit. You do not have to collect retail sales tax on wholesale sales.
You must keep copies of reseller permits for five years.
Sales made directly to the United States government are exempt from retail sales and lodging taxes. However, sales made to employees or representatives of the federal government (including members of the military) are not exempt, even if they will receive reimbursement from the federal government.
To qualify for an exemption, the purchase must be made with one of the following payment types:
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