Doing Business on Bainbridge Island

The City of Bainbridge Island requires that all persons doing business on Bainbridge Island be licensed by the city. Businesses with gross earnings of more than $150,000 earned on Bainbridge Island are subject to the city’s Business and Occupation Tax.

Business License Information

View the following business license information:
In mid-December 2012, this letter regarding license renewal and business and occupation tax reporting was sent to all licensed businesses with an email address on file

Business & Occupation Tax


2013 Business & Occupation Tax Report Form
   
Under Washington law (RCW35.21 as amended by 2003 HB2030), cities charging a business and occupation tax are required to adopt a model ordinance providing a degree of standardization in the definitions and practices used by Washington cities. On October 27, 2004, the City of Bainbridge Island adopted Ordinance 2004-16 and Ordinance 2004-17, covering the administrative procedures to be used in matters relating to this tax. The city's business license provisions are contained in its municipal code.

Procedures


On December 19, 2012, Ordinance 2012-20 was passed and approved by the City Council relating to business and occupation tax, repealing Chapter 5.05 of the Bainbridge Island Municipal Code and adopting a substitute Chapter 5.05 in its place. The city's procedures for charging its business and occupation taxes include the following:
  • Taxes are collected annually on or before the last day of February for the preceding calendar year.
  • Tax forms (2011) (2012) are mailed by the city to all licensed businesses with license renewals in January.
  • All businesses are charged the same tax rate (currently 0.1%) regardless of the type of business.
  • Rather than charging a tax on gross receipts, the City of Bainbridge Island allows all the deductions allowed by the State of Washington on its business and occupation tax. In addition, many types of revenue are exempt for taxation (see BIMC 5.05.090)
  • The city allows a $200,000 annual deduction from gross income generated in 2011. For gross income generated in 2012, this deduction will decrease to $150,000.
  • Businesses with common ownership are allowed to take the annual deduction only once. Businesses are considered to be under common ownership if 10% or more of the business is owned or controlled by the same person or group of persons.
  • Businesses with less than $100,000 in annual taxable revenue are not required to submit a tax return, but should indicate the amount of revenue on their business license renewal form.
  • Persons buying businesses on Bainbridge Island are responsible for any unpaid tax of the seller unless the buyer has obtained clearance from the city.
The City of Bainbridge Island believes that all of the provisions in its Business and Occupation Tax ordinances are consistent with HB2030, although the city has taken advantage of some of the optional provisions of that law to make its business & occupation tax more business-friendly.

Commercial Parking

Tax


Anyone engaged in a commercial parking business in the city is required to pay a commercial parking tax per BIMC 5.10. The commercial parking tax rate is 30% and payments accompanied by the reporting form are due in quarterly installments. Commercial parking businesses are subject to the commercial parking tax.

Helpful Resources


Please contact the Finance and Administrative Services Department with any questions about licensing requirements for doing business on Bainbridge Island at 206-780-8668.