Business & Occupation Tax
The State of Washington, unlike many other states, does not have an income tax. As an incorporated city, one way the City of Bainbridge Island raises revenue is through its Business & Occupation (B&O) Tax levied on businesses engaging in business in the City. Businesses with gross revenue in the City of more than $150,000 are subject to the City’s Business and Occupation Tax set at 1/10 of 1% (0.001). The City’s B&O Tax is a gross receipts tax; that is, the tax is measured on the value of products, gross proceeds of sales, or gross income of the business in the City. Being a gross receipts tax means there are no deductions for labor, materials, or other costs of doing business. The tax is filed annually reporting gross revenue for the prior calendar year. This B&O Tax is separate from and in addition to the Washington State B&O Tax.
|Definition of "Gross Revenue on the Island": Under Bainbridge Island Municipal Code (BIMC) 5.05.050, the B&O Tax is levied on every person engaging in business activities within the City. The definition of "engaging in business" can be found at BIMC 5.05.030. For B&O Tax purposes, BIMC 5.05.050.A.4 defines "total gross revenue on the island" as the "gross proceeds of sales of the business without regard to the place of delivery of articles, commodities or merchandise sold."|
Note: The City’s B&O Tax is a gross receipts tax meaning there are no deductions for labor, materials, or other costs of doing business.
Nonprofit Organization and City B&O Tax Filing
Nonprofit organizations are subject to Business and Occupation Taxes as a result of undertaking for-profit activities. If the nonprofit does not undertake for-profit activities, check the appropriate box at the top of the B&O Tax Return and mail the return to the address provided. Nonprofit organizations remain responsible for reporting all for-profit income activity.
Businesses Exempt from City B&O Tax Filing
BIMC 5.05.090 states that the City’s B&O Tax does not apply to certain business activities to which tax liability is imposed by other means. Business activities not subject to B&O Tax are:
- Telephone and Electric Light and Power
- Utilities engaged in carrying on the following business for hire or for sale of a commodity or a service: water, sewer service, storm drain service, provision of television, radio, computer data, or any other electronically transmitted information.
- Commercial Parking Business
Business & Occupation Tax Report
The City mails a personalized B&O Tax Report to our businesses on or around the first week of January of each year. A generic report is provided below for your convenience. B&O Tax Reports and tax payments are due by the last day of February each calendar year. See the Fees & Penalties to calculate penalties for reports received after the due date.
If you have questions about the City’s B&O Tax, please contact the Finance Department at (206)780-8668.
Please Note: The City of Bainbridge Island B&O Tax Report is due February 29, 2020. City cannot accept tax money for the 2019 reporting year before January 1, 2020.