Understanding Washington State's Business and Occupation (B&O) Tax
The Washington State Business and Occupation (B&O) tax is a gross receipts tax. This means it's levied on the gross revenue of most businesses for the privilege of doing business in Washington. Unlike sales tax, which is paid by the consumer, the B&O tax is the responsibility of the business itself.
The B&O tax rate varies significantly depending on the type of business activity. Businesses may be subject to multiple B&O tax rates if they engage in various activities. Some specific activities are also subject to an additional surcharge (e.g., public utility taxes).
How the Calculator Works
This calculator estimates your Washington State B&O tax based on your reported gross revenue and your primary business activity classification.
Gross Revenue: This is the total amount of money your business receives from sales of goods or services before any deductions.
Business Activity Classification: Washington State categorizes businesses into different groups, each with a specific B&O tax rate. Common classifications include:
Manufacturing: Applies to businesses that produce or process articles of tangible personal property.
Wholesaling: Applies to businesses that sell tangible personal property to other businesses for resale.
Retailing: Applies to businesses that sell tangible personal property to consumers.
Services (General): Applies to a broad range of service activities not specifically classified elsewhere.
Services (Professional): Applies to specific professions like accounting, law, medicine, engineering, etc.
Other Taxable Businesses: Covers various other taxable activities.
Non-Taxable Businesses: Certain activities, like most passive investments or services provided outside of Washington, may be non-taxable.
The tax is calculated by multiplying your gross revenue by the applicable tax rate for your business activity. For example, if your business generates $100,000 in gross revenue and falls under the "Retailing" classification with a tax rate of 0.471%, your estimated B&O tax would be $100,000 * 0.00471 = $471.
Important Notes:
This calculator provides an *estimate* only. Actual tax liability may vary due to specific deductions, credits, local taxes, or other complex tax regulations.
The rates used are general B&O rates and do not include specific surcharges or taxes (like the Public Utility Tax, environmental taxes, etc.).
Consult with a qualified tax professional or refer to the Washington State Department of Revenue for precise tax information and filing requirements.
Businesses with gross income below certain thresholds may be exempt from paying B&O tax, but still need to register and file.
var taxRates = {
"manufacturing": {"rate": 0.00471, "description": "Manufacturing (0.471%)"},
"wholesaling": {"rate": 0.00471, "description": "Wholesaling (0.471%)"},
"retailing": {"rate": 0.00471, "description": "Retailing (0.471%)"},
"services_general": {"rate": 1.5, "description": "Services – General (1.5%)"},
"services_professional": {"rate": 1.5, "description": "Services – Professional (1.5%)"},
"other_taxable": {"rate": 1.5, "description": "Other Taxable Businesses (1.5%)"},
"non_taxable": {"rate": 0.0, "description": "Non-Taxable Businesses (0.0%)"}
};
function updateTaxRateDescription() {
var selectedActivity = document.getElementById("businessActivity").value;
var rateInfo = taxRates[selectedActivity];
if (rateInfo) {
document.getElementById("taxRateDescription").value = rateInfo.description;
}
}
function calculateTax() {
var grossRevenueInput = document.getElementById("grossRevenue");
var grossRevenue = parseFloat(grossRevenueInput.value);
var selectedActivity = document.getElementById("businessActivity").value;
var resultDisplay = document.getElementById("result").querySelector("span");
if (isNaN(grossRevenue) || grossRevenue < 0) {
resultDisplay.textContent = "Invalid Revenue";
resultDisplay.style.color = "#dc3545";
return;
}
var rateInfo = taxRates[selectedActivity];
if (!rateInfo) {
resultDisplay.textContent = "Invalid Activity";
resultDisplay.style.color = "#dc3545";
return;
}
var taxRate = rateInfo.rate;
var estimatedTax = grossRevenue * taxRate;
resultDisplay.textContent = "$" + estimatedTax.toFixed(2);
resultDisplay.style.color = "#28a745"; // Success green
}
function resetCalculator() {
document.getElementById("grossRevenue").value = "";
document.getElementById("businessActivity").selectedIndex = 0;
updateTaxRateDescription();
document.getElementById("result").querySelector("span").textContent = "$0.00";
document.getElementById("result").querySelector("span").style.color = "#28a745";
}
// Initialize the description on page load
window.onload = updateTaxRateDescription;