Both Bellevue and Seattle, cities in Washington State, impose a Business and Occupation (B&O) tax on businesses operating within their jurisdictions. This tax is levied on the gross receipts of businesses, meaning it’s based on total revenue without deductions for expenses.
Bellevue Business License Tax:
- Threshold: As of 2023, businesses with annual gross receipts exceeding $195,000 are subject to Bellevue’s B&O tax. This threshold is adjusted annually based on the Consumer Price Index. (My Utility Bill)
- Tax Rate: The general B&O tax rate in Bellevue is 0.1496% of taxable gross receipts.
- Licensing: Businesses must obtain a Bellevue business license if they have a physical presence in the city or if their annual gross income from Bellevue activities is $2,000 or more. Notably, Bellevue business licenses do not expire and do not require annual renewal. However, businesses are required to notify the Bellevue Tax Division of any account changes, such as address changes or business closures. (City of Bellevue)
Seattle Business and Occupation (B&O) Tax:
- Threshold: Businesses with annual taxable gross revenue of $100,000 or more are required to pay Seattle’s B&O tax. Even if revenue is below this threshold, businesses must still file a tax return reporting their gross revenue. (Seattle.gov)
- Tax Rates: Seattle’s B&O tax rates vary by business classification. For example, as of 2019, the tax rate for retail sales was 0.219%, while the rate for service and other business activities was 0.427%. These rates are subject to change, so it’s advisable to consult the city’s official resources for the most current information. (Seattle.gov)
- Licensing: All businesses operating in Seattle must obtain a Seattle business license tax certificate. This requirement applies regardless of the business’s revenue. (Seattle.gov)
Key Points:
- Gross Receipts Tax: Both cities’ B&O taxes are based on gross income, with no deductions for labor, materials, or other operational costs.
- Separate from State B&O Tax: The city B&O taxes are in addition to Washington State’s B&O tax. Businesses must file and pay these taxes separately. (Seattle.gov)
- Filing Requirements: Even if no tax is due (e.g., revenues are below the threshold), businesses are generally required to file a return reporting their gross income.
For the most accurate and up-to-date information, it’s recommended to consult the official websites of the City of Bellevue and the City of Seattle, or contact their respective tax divisions directly.
Posted in Announcement