Business and Occupation Tax.

Washington's major business tax is the business and occupation (B&O) tax.  The B&O tax is imposed on the gross receipts of business activities conducted within the state, without any deduction for the costs of doing business.  Businesses must pay the B&O tax even though they may not have any profits or may be operating at a loss.

A taxpayer may have more than one B&O tax rate, depending on the types of activities conducted.  Major B&O tax rates are 0.471 percent for retailing; 0.484 percent for manufacturing and wholesaling; and 1.5 percent (businesses with taxable income of less than $1 million) or 1.75 percent (businesses with taxable income of $1 million or more) for services and for activities not classified elsewhere.  There are many specialized B&O tax rates and preferential rates that apply to specific business activities.

In addition, a taxpayer may be eligible to utilize other tax preferences, including credits and deductions, to reduce their tax liability.  For example, a taxpayer engaging in activities subject to different B&O tax rates may be eligible for a Multiple Activities Tax Credit.  A taxpayer may also be eligible for a small business credit that will either eliminate or reduce their B&O tax liability.  The credit is $160 per month for taxpayers that report at least 50 percent or greater of their total B&O taxable amount under service and other activities, real estate brokers, and contests of chance and $55 per month for all other businesses, multiplied by the number of months in the reporting period.  The amount of the credit available phases out based on the business's gross receipts.

A business does not have to file an annual B&O tax return if the business does not owe other taxes or fees to the Department of Revenue (DOR) and has annual gross proceeds of sales, gross income, or value of products for all B&O tax classifications of less than $125,000 per year.

Retail Sales and Use Tax.

Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services.  A retail sale is a sale to the final consumer or end user of the property, digital product, or service.  If retail sales taxes are not collected when the user acquires the property, digital product, or service, then use tax applies to the value of property, digital product, or service when used in this state.  The state, all counties, and all cities levy retail sales and use taxes.  The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 0.5 percent to 4.1 percent, depending on the location.

Coins and Precious Metal Bullion.

Generally, a person does not owe wholesaling B&O tax, retailing B&O tax, or retail sales tax on gross income from the sales of precious metal bullion and monetized bullion.  Precious metal bullion is any processed, smelted, or refined precious metal valued on its content, not form.  Precious metals include gold, silver, platinum, rhodium, and palladium.  Monetized bullion is a coin or other form of money made from metal and used as an exchange medium under the laws of a government.

Retailing B&O tax is owed, and the sales tax must be collected and reported, on sales of coins that cannot be used as money.  Sales of bullion that will be used to manufacture items such as jewelry or works of art are subject to wholesaling B&O tax if a reseller permit is provided.  Retailing B&O tax and retail sales tax applies to sales of such items to consumers.

If a person receives commissions from the sales of precious metal bullion and monetized bullion paper currency, the person must pay service and other activities B&O tax.

The B&O tax exemption on the sale of precious metals and bullion is repealed.  In addition, the retail sales tax exemption for the sale of precious metals and bullion is repealed.