The City of Seattle levies and collects the Business and Occupation (B&O) tax. Businesses “engaging in business activities” within the City of Seattle are required to obtain a Seattle business license and pay the B&O tax whether or not a place of business is maintained within the city limit. Business licenses are valid until December 31st of each calendar year and must be renewed every year.
Seattle businesses are required to file the Business License Tax returns on a quarterly basis, unless assigned a monthly or annual reporting period, and pay the B&O tax with the returns. The returns are due on the last day of the next month after the period covered by the return. For example, tax returns covering the 4th quarter of 2011 are due on January 31, 2012. Your filing frequency will be determined by the City based on your application information.
The gross receipts B&O is based on gross receipts for the reporting period. The current tax rates range from 0.2150% to 0.4150% of taxable gross receipts, depending on the classifications.
The square footage B&O tax applies to businesses that maintain a business location within Seattle and conduct out-of-city business activities. Businesses whose only locations are outside of Seattle are exempt and do not report or pay any square footage B&O tax. Businesses located in Seattle that conduct all of its business activities within Seattle are entitled to claim a 100% credit and do not pay any square footage B&O tax. The square footage B&O tax is based on rentable square feet. The current tax rates are $0.39 per square foot per quarter for “business floor space” and $0.13 per square foot per quarter for “other floor space.”
Businesses with annual taxable gross receipts of less than $100,000, as well as businesses that conduct no taxable business activities, are exempt in 2012 and pay neither the gross receipts B&O tax nor the square footage B&O tax. However, such exempt businesses are still required to complete and file the returns by the applicable due dates.
As your CPAs, we would be happy to help you with your Seattle tax filings. Call Huddleston Tax CPAs for an appointment with one of our experienced local Seattle CPAs.
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