Does Seattle collect B&O tax? Yes.
Will I need to buy a business license if my office isn’t in Seattle? Yes, if you engage in business activities within the city, you must get a business license and pay the B&O tax.
How long is a business license valid for? Until December 31st of each calendar year and must be renewed every year.
When do I need to file? On a quarterly basis, unless assigned a monthly or annual reporting period. You are assigned this by the city.
How much is the B&O tax? The gross receipts are based on the reporting period. The current tax rates range from 0.2150% to 0.484% of taxable gross receipts, depending on the classifications.
What is the sales tax rate in Seattle?
The combined sales tax rate in Seattle is 10.25% as of March 2024. This is broken down as follows:
- Washington state sales tax: 6.5%
- King County sales tax: 0%
- Seattle city sales tax: 3.75%
It’s important to note that this is the sales tax rate. Seattle also has various other taxes, such as business and property taxes, which have different rates depending on the specific circumstances.
What about the square footage B&O tax? The square footage B&O tax applies to businesses that maintain a business location within Seattle and conduct out-of-city business activities. 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 whose locations are outside of Seattle are exempt and do not report or pay any square footage B&O tax. Meanwhile 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.
Are any businesses exempt? 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.
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Image by Cristian Grigore from Pixabay