Operating a business in Bellevue, Washington, entails several tax obligations beyond sales tax. Key taxes to consider include:
1. Washington State Business & Occupation (B&O) Tax: Washington State imposes a B&O tax on gross receipts from business activities. The tax rate varies based on the business classification. Notably, there are no deductions for labor, materials, or other operational costs. (Washington Department of Revenue)
2. Bellevue City Business & Occupation (B&O) Tax: In addition to the state B&O tax, Bellevue administers its own B&O tax, which includes:
- Gross Receipts Tax: Applied to the gross income from business activities, with rates varying by classification. (City of Bellevue)
- Square Footage Tax: For businesses with a physical presence in Bellevue, this tax is based on the square footage of the business premises. (City of Bellevue)
Businesses with annual taxable gross receipts of $205,000 or less, and taxable square footage of 250 square feet or less, may be exempt from Bellevue’s B&O tax but are still required to file a return.
3. Utility Taxes: Bellevue imposes taxes on utility services, including telephone, cellular, gas, electric, water, sewage, drainage, cable, and garbage services. Rates range from 4.5% to 10.4%, depending on the utility type.
4. Admission and Gambling Taxes: If your business involves charging admission or conducting gambling activities, Bellevue levies specific taxes:
- Admission Tax: A 3% tax on the ticket price for events or establishments charging admission.
- Gambling Tax: Applicable to activities like bingo, raffles, amusement games, punchboards, and pull-tabs, with rates ranging from 2% to 5%. (City of Bellevue)
5. Property Taxes: Businesses are subject to property taxes on real property (land and buildings) and personal property (equipment, furnishings, etc.). These taxes are assessed and collected by King County, where Bellevue is located.
6. Federal Taxes: At the federal level, businesses must account for:
- Income Tax: Based on net profits, with rates varying by business structure.
- Employment Taxes: Including Social Security, Medicare, and federal unemployment taxes.
It’s essential to consult with a tax professional to ensure compliance with all applicable tax obligations and to stay informed about any changes in tax laws.