Comments on: Washington State Business & Occupation Taxes: A Primer

By: Steve

Steve — Thu, 11 Jan 2018 22:11:59 +0000

In reply to MarkD.

I think all the work you do in Washington state is subject to B&O.

I think if you’re doing work in the UK (and then paying taxes there) on other chunks of the work, that non-Washington-state income is not subject to Washington B&O.

By: Steve

Steve — Thu, 11 Jan 2018 22:08:33 +0000

In reply to April.

B&O runs from half a percent to a percent and a half of your revenue. So even if you don’t make much profit–if you’ve got enough revenue–you can still pay significant taxes.

Tip: You should make sure you’re filing online (and not by paper) so that any small business B&O credit you’re entitled to gets figured in…

By: April

April — Thu, 11 Jan 2018 03:10:33 +0000

Hello. I am super confused 🙂 I have been running a small photography business and paying B&O tax for 5 years. I don’t make much about $10,000 a year but always seem to pay what seems like a ton in B&O around $600 each year! Since I make under a certain amount do I even need to file? Or do I just put $10,000 into the little calculator and pay the horrendous amount of $600ish?!

By: MarkD

MarkD — Wed, 10 Jan 2018 23:06:11 +0000

In reply to Steve.

Jumping on this – can you say what “Operating” means and how this applies to B&O? I have a WA business license for my pass-through LLC and I am subcontracted by a UK firm to do IT work for them – sometimes working from home in Washington and sometimes located in Europe. I invoice them monthly with no sales tax added since they are foreign entity. Would all or part of these revenue be subject to B&O if either situation is deemed to be operating here?

By: Steve

Steve — Mon, 18 Dec 2017 00:00:54 +0000

In reply to LLC considering moving to WA. I think the way it'll work based on the info you provide is you will pay B&O on anything you don't source to another state.

By: LLC considering moving to WA

LLC considering moving to WA — Sun, 17 Dec 2017 15:05:26 +0000

The 1.5% D&O tax on revenue seems quite high when typical net income/revenue are on the order of 5-10% typically, so it can be 15-30% of net. I am considering relocating the headquarters of my small professional LLC to Washington. We’d be moving up about a million in compensation but don’t have any of our revenue from Washington state clients. Our revenue comes from NW, IL, CA, PA and many other states, and some have some withholding but many do not (we operate in CA). Do we only pay D&O on the revenue that is actually received from Washington clients? Is B&O paid only on WA revenue, or is it paid on any revenue that isn’t taxed elsewhere?

By: Stephanie

Stephanie — Sun, 22 Oct 2017 01:17:36 +0000

How does it work if your business model provides both services and retail?

By: Steve

Steve — Thu, 10 Aug 2017 16:01:35 +0000

In reply to Susan Van Horne, LMT. Yes. Absolutely. And remember you're subject both to state and city B&O.

By: Susan Van Horne, LMT

Susan Van Horne, LMT — Thu, 10 Aug 2017 13:00:35 +0000

Is my Seattle based medical massage business subject to B&O taxes?

By: Steve

Steve — Wed, 14 Jun 2017 19:21:00 +0000

In reply to Marcus.

You probably don’t owe the B&O tax if your sales revenue has been really modest. There’s a threshold you have to cross.

You would be able to exclude out of state sales from sales tax and state B&O taxes… so you may not have as much of a problem as you think.

My general advice to people in a situation like yours is to first start complying with the law so any problem doesn’t get worse… and then to later look at going back and seeing whether you have issues with past years. Often, dealing with past years’ returns is not as bad as you think.