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Business & Occupation Tax
2023 B&O Tax Return (Tax Return Year 2022) packets will be mailed to businesses in February 2023.
Tax Returns are due April 15 or the following business day if the 15th falls on a weekend. |
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 City does not distinguish between wholesale and retail for B&O Tax purposes. The tax is filed annually reporting gross revenue for the prior calendar year beginning January 1. 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. |
Business & Occupation Tax Return Guide & General Instructions
Every person, firm, association, or corporation that engages in business within the jurisdiction of the City of Bainbridge Island must have a valid City business license in good standing. Subsequently, every person, firm, association, or corporation that engages in business within the jurisdiction of the City of Bainbridge Island, whether or not the business is located on the island, is required to file the City's B&O Tax Return unless otherwise exempted. The City of Bainbridge Island administers one business & occupation tax: gross receipts tax. B&O Tax Returns and tax information are confidential and privileged, and cannot be disclosed except under purposes provided by law.
Notes: Businesses Exempt from City B&O Tax - BIMC 3.88, 5.05.090, 5.08 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:
Nonprofit Organization and City B&O Tax Filing - Nonprofit organizations are subject to Business and Occupation Taxes only 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, sign and date your return at the bottom where indicated, and mail the return to the address provided (see Tax Return tab below). Nonprofit organizations remain responsible for reporting all for-profit income activity. Real Estate Sales, Brokerages Earnings, and Agents' Commissions - The responsibility for the filing of B&O Tax Return is dependent upon the type of agent and any possible agreement or contract an agent has with a brokerage:
For B&O Tax purposes:
The advantage of the above for agents is agents do not have to file a return in all the different jurisdictions in which their clients reside - filing is the broker's responsibility. The advantage of the above for the brokerage is there is only one return, although brokerages must keep track of seller residences. |
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 April 15th of each calendar year. See the Fees & Penalties to calculate penalties for reports received after the due date. Failure of the taxpayer or licensee to receive a B&O Tax Return does not release the taxpayer or licensee from any tax, fee, interest, or any penalties therein, nor shall such failure operate to extend any time limit set by law. It is the responsibility of the taxpayer to inform the City about any changes or problems which impact filing.
Taxpayers are required to keep records for the most recent five-year return period. Businesses must keep open for examination by the City's Finance Director or designated agent all books, records, invoices, receipts, etc.
Note: In 2019, the City's B&O Tax Return underwent extensive revision to bring the return into compliance with the Model Ordinance as required by State law HB 1403. The City B&O Tax Return now consists of the primary Tax Return plus three (3) schedules:
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The general instructions below, presented as a series of tabs, provides a basic, working description of the City's B&O Tax Return. The instructions are intended for general information purposes only. It is current at the time of publication; however, potential future changes in the City of Bainbridge Island Municipal Code (BIMC) or State law may have an impact on the information presented. Not all possible applications of tax are included. In the event of a conflict between the information presented in this guide and an ordinance of the City, the ordinance prevails.
Additional information and specifics related to your B&O Tax Return may be obtained in the BIMC or by contacting Finance & Administrative Services. For help with any questions, please contact Finance & Administrative Services at:
Finance & Administrative Services Phone: (206) 780-8591 Email: taxes@bainbridgewa.gov |
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Current and past B&O Tax Returns packets are available below as a downloadable PDF. Updates and revisions to City tax returns are effective retroactively. Therefore, the City reserves the right to reject any submitted return that is grossly out of date, and thus, out of compliance. Accepted return packets are as follows:
2023 B&O Tax Return (RY2022) – PDF
2022 B&O Tax Return (RY2021) – PDF
2021 B&O Tax Return (RY2020) – PDF
2020 B&O Tax Return (RY2019) – PDF
Important Note: The City of Bainbridge Island B&O Tax Return is due April 15th. If the 15th falls on a weekend the return and any applicable payment is due on the next business day.
Need a copy of prior year B&O tax return(s)?
Email us at finance@bainbridgewa.gov. We’ll need your business name, DBA if you have one, UBI #, the prior year return(s) you’d like to receive, and a phone number in case we need to call you. The prior year returns will only be given out in person. You must bring photo ID and proof you work for that business.
The City of Bainbridge Island Annual Business & Occupation Tax Return is the primary document of the return. The return must be signed, dated, and returned to the City for your return to be considered complete.
IMPORTANT Information Regarding COVID-19 Subsidies and B&O Tax reporting:
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1. | Unique Business Identifier, or UBI - The UBI is your business license number with the City. The City adopted the UBI as its business license number in July 2018 as a means to streamline information between the State and the City when the City partnered with the WA-DOR Business Licensing Service. The City uses the database of WA-DOR Business Licensing Service to obtain information for distributing the City's B&O Tax Return
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2. | Businesses and Organizations Exempt from filing the City B&O Tax Return - There are a limited number of businesses and organizations exempt from filing a return under BIMC 5.05.90. Two entities require special notations: Nonprofit Organizations - If the return is for a registered nonprofit organization with the City, the organization is exempt from completing the City's B&O Tax Return. However, the organization must still file a return. If the nonprofit organization has zero for-profit revenue for the reporting year, check the box then sign and date the return where indicated. Mail the return. This completes the organization's filing for the reporting year. If the organization has any for-profit income for the reporting year, the organization must report the for-profit income. Be aware, if a nonprofit organization has for-profit revenue, #3 applies. However, if the nonprofit has over $150,000 gross for-profit revenue on the island, the organization must report using the main tax reporting form (see #5). Insurance Business - Insurance business is exempt from filing a B&O Tax Return except if involved in the following activities:
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3. | Gross Revenue in the City Less than $150,000 for Reporting Year - If the gross revenue for the reporting year of a business or a nonprofit organization with for-profit income is less than $150,000, you are exempt from completing the City's B&O Tax Return. However, the business or nonprofit must still file a return. (Go to #4.) | ||
4. | Exempt Business MUST Report Gross Revenue - If gross revenue for the reporting year is less than $150,000, check the box, report your gross revenue on the island for the reporting year on the line provided, then sign and date the return where indicated. Mail the return. This completes the business or nonprofit's filing for the reporting year. IMPORTANT: Gross revenue MUST be reported. A return claiming gross revenue on the island of less than $150,000 that does not report actual gross revenue will be rejected. | ||
5. | Gross Receipts Reporting - This section is the primary B&O Tax Return reporting form for businesses engaging in business on the island. Included in the form is the reporting from any of the adjacent schedules. To complete the form, a business reports their gross receipts (Column 2) for each business activity listed in Column 1. For each business activity, a business will report any deductions (Schedule B), exemptions (Schedule B), as well as any services that are apportioned (Schedule A). This form also allows businesses to take the Multiple Activities Tax Credit (Schedule C) on your total gross receipts. Every business engaging in the business in the City receives a one-time deduction of $150,000 on gross revenue made on the island. a. Business Activity (Lines 1-7) - The City breaks out the type of activity for which a business is engaged to support internal purposes. It is important to note that while wholesaling and retail services are separate business activities for tax reporting, in terms of gross receipts the City does not distinguish between wholesale and retail. b. Services & Other, Not apportioned and Apportioned (Lines 3-4) - Only a specific group of services are apportionable services. The distinction for apportioned and not apportioned services is between services to persons (apportionable) and services to property (not apportionable) as defined by the State. In addition, apportionable services are only apportioned if the business has a taxable presence on the island and another jurisdiction (e.g., physical location(s) elsewhere other than the island). When an apportionable business service has additional taxable presence outside of the City, apportionment calculates the portion of gross revenue that can be claimed by each jurisdiction to prevent double or overlapping taxation.
c. Deductions & Exemptions (Columns 3-4) - The City recognizes certain deductions and exemptions. Go to the Schedule B tab for detailed information. d. Multiple Activities Tax Credit (Line 8) - The Multiple Activities Tax Credit may apply for businesses engaged in activities that are subject to tax under two or more classifications. The purpose of the credit is to ensure that B&O Taxes are not paid by the same business more than once on the same amount. Go to the Schedule C tab for detailed information. e. Standard Deduction (Line 10) - Each business engaging in business on the island is allowed the $150,000 standard deduction. If the business did not gross $150,000 or more in the reporting year, go to #3. The standard deduction is only allowable once per business. This means for businesses that have more than one physical location engaging in business on the island, the deduction may only be taken for one location and no deduction is allowed for the subsequent locations. This one-time deduction applies to such entities as businesses operating under a separate holding company or similar dual operating situation.
f. Tax Rate (Line 12) - The B&O tax rate for the City is 1/10 of 1%. Be careful in calculating the tax owed. Multiply the Total Taxable Amount by 0.001. Any license fee or tax due and unpaid, and all interest and penalties thereon, are considered a debt to the City and may be collected in the same manner as any other debt. | ||
6. | Signature Required - The return must be signed and dated in order for the return to be accepted. In signing, the signatory affirms that the information provided on the return in correct to the best of their knowledge. | ||
7. | Deliver Your Return - The City gives several options for getting your B&O Tax Return to the City (Note: There is no need to return unutilized schedules): a. Third-Party Mailing Service (Seattle, WA) The City contracts with a third-party mailing service located in Seattle for the sending, receiving, and receipting the bulk of the City's B&O Tax Returns to ensure efficient and quick filing. This third-party mailing service collects tax returns at a post office box. You will note on returns mailed to you from our third-party mailing service the returns show a return address of: City of Bainbridge Island PO Box 94304 Seattle, WA 98124-6604 This is a valid mailing address for B&O Tax Returns. Please note: ****DO NOT SEND ANY NON-B&O TAX PAYMENTS WITH YOUR RETURN**** when mailing to the third-party mailing service. There is no guarantee that other payments to the City sent c/o the third-party mailing service (e.g., utility or permit payments) will be received and receipted correctly or in a timely manner. All non-tax payments are to be sent directly to the City. b. Mailing To The City Finance & Administrative Services oversees the City's B&O Tax Returns. Returns may be mailed to the City at: Finance & Administrative Services City of Bainbridge Island 280 Madison Avenue N Bainbridge Island, WA 98110 c. Email Zero-Returns If you have a zero return, that is, an exempt return or a return owing no money, the City allows businesses the option to email their return. The return must be an email attachment in PDF format. Placing "B&O Zero Return" in the subject line, email the zero return to: taxes@bainbridgewa.gov Senders will receive an automatic response email confirming receipt of their return. d. City Drop Off Returns may be brought to City Hall. Drop your tax return in the drop box located at City Hall (located across from the Town Square off Henshaw Way NE). |
1. | Unique Business Identifier, or UBI - The UBI is your business license number with the City. The City adopted the UBI as its business license number in July 2018 as a means to streamline information between the State and the City when the City partnered with the WA-DOR Business Licensing Service. The City uses the database of WA-DOR Business Licensing Service to obtain information for distributing the City's B&O Tax Return. Note: If downloading a blank form, please make certain to provide your UBI so the schedule is credited to the correct business. | |||
2. | Does Apportionment Apply to Me? - Apportionment ONLY applies to gross receipts that meet the following criteria:
If your business (a) did not gross over $150,000 in the reporting year, or (b) is not an apportionable service, and/or (c) if your business does not have a taxable presence (e.g., a physical presence) in Bainbridge Island AND another jurisdiction, and/or your apportionable revenue on the island does not exceed $2,000, Schedule A does not apply. When Schedule A does not apply:
Taxable Location In Another Jurisdiction Defined - Per WA-DOR, starting January 1, 2020, 'taxable in another jurisdiction' means the business meets ANY of the below listed requirements in the current or prior calendar year. If you do not meet any of the following requirements, then your gross revenue is taxable in Washington and is not eligible to be apportioned in other states or countries.
Furthermore, in determining whether a business has exceeded the receipts threshold, apportionable income attributed to another state or country is included along with its retail and wholesale sales sourced to the same state or country. Apportionable Business Defined - An apportionable services refers to certain professional activities as outlined in WAC 458-20-224. The distinction between apportionable and non-apportionable services is the State distinction between personal or professional services to persons and and services rendered to the personal property of persons. Examples of apportionable services includes: accountants, agents, appraisers, architects, attorneys, automobile brokers, barbers/beauty shop owners, chemists, collection agents dentists, engineers, financiers, funeral directors, refuse collectors, janitors, landscape architects lawyers, physicians, real estate agents, and teachers.By contrast, non-apportionable services are persons engaged in the business of cleaning, repairing, improving, etc., the personal property of others such as automobile repair, house repairs, jewelry repairs, appliance repair, laundry or dry cleaners. It also includes certain personal and professional services specifically included within the definition of the term "sale at retail" in RCW 82.04.050. Furthermore, it does not include persons who render services to others in the capacity of employees, which is distinguished from independent contractors per WAC 458-20-105. Intangibles, such as royalties, are not included in the apportionment calculation and are reported under Service & Other (Not Apportioned). Income from intangibles is sourced to the taxpayer's domicile (headquarters).
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3. | Why is this schedule necessary?- Apportionment has been in use for many years by various jurisdictions. Apportionment was developed in order to avoid double taxation as it allows specific types service revenue to be properly divided between a business's multiple locations ensuring only the revenue generated within the purview of a jurisdiction is taxed. | |||
4. | Apportionment Reporting Form - This is the reporting form for the apportionment of revenue. The form is broken into sections. Each section builds upon the previous section(s). No section stands alone. An example of the apportionment formula is provided. However, to complete the apportionment reporting grid, we strongly recommend you use the worksheet that accompanies the schedule. a. The worksheet to help you complete the apportionment grid is as follows. Every attempt has been made to assure that the steps to completing apportionment are clear and straightforward. Again, each section builds upon the the previous section(s); no section is intended to stand alone. The worksheet is a way to complete the apportionment formula. The purpose is to calculate the amount to be reported on Line 4, Column 5 of the B&O Tax Return. Before you begin to calculate the apportionment of your service income, gather the following information:
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5. | City Taxable Service Receipts - Line 12 of Schedule A is the apportionable amount...the only apportionable amount...to be reported on Line 4, Column 5 of your B&O Tax Return.
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1. | Unique Business Identifier, or UBI - The UBI is your business license number with the City. The City adopted the UBI as its business license number in July 2018 as a means to streamline information between the State and the City when the City partnered with the WA-DOR Business Licensing Service. The City uses the database of WA-DOR Business Licensing Service to obtain information for distributing the City's B&O Tax Return. Note: If downloading a blank form, please make certain to provide your UBI so the schedule is credited to the correct business tax return. | ||
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Section I. Deductions - The City recognizes certain deductions in computing the gross receipts tax. These deductions as outlined in BIMC 5.05.100 are as follows: a. Receipts from Tangible Personal Property Delivered out the State. In computing tax, there may be deducted from the measure of tax under retailing or wholesaling amounts derived from the sale of tangible personal property that is received by the purchaser or its agent outside the state of Washington. b. Cash Discount Taken by Purchaser. In computer tax, there may be deducted from the measure of tax the cash discount amounts actually taken by the purchaser. This deduction is not allowed in arriving at the taxable amount under the extracting or manufacturing classifications with respect to articles produced or manufactured, the reported values of which, for the purposes of this tax, have been computed according to the "value of product" provisions. c. Credit Losses of Accrual Basis Taxpayers. In computing tax, there may be deducted from the measure of tax the amount of credit losses actually sustained by taxpayers whose regular books of account are kept upon an accrual basis. d. Constitutional Prohibitions. In computing tax, there may be deducted from the measure of the tax amounts derived from business which the City is prohibited from taxing under the Constitution of the state of Washington or the Constitution of the United States. e. Other Deductions. All other items allowed by the state of Washington as deductions from the B&O Tax imposed by the State; provided, that the items being deducted have been included in the remaining incoming after having subtracted the exemptions in BIMC 5.05.090 (Ord. 2004-16 § 1, 2004) as required by RCW 35.102.040 outlining the Model Ordinance on Municipal Gross Receipts Business & Occupation Tax.
Any deduction you are claiming must be listed and an explanation provided. All deductions must be fully supported by the taxpayer's books and records. Finance & Administrative Services, the department overseeing the City's B&O Tax, follows a precedent of review for up to three (3) years prior to the current year's filing. | ||
3. | Section II. Exemptions - The City allows the following exemptions as outlined under BIMC 5.05.090:
Exemptions do not apply to:
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1. | Unique Business Identifier, or UBI - The UBI is your business license number with the City. The City adopted the UBI as its business license number in July 2018 as a means to streamline information between the State and the City when the City partnered with the WA-DOR Business Licensing Service. The City uses the database of WA-DOR Business Licensing Service to obtain information for distributing the City's B&O Tax Return. Note: If downloading a blank form, please make certain to provide your UBI so the schedule is credited to the correct business tax return. | ||
2. | IMPORTANT: The Multiple Activities Tax Credit will be rare on Bainbridge Island. | ||
3. | The Multiple Activities Tax Credit (MATC) may apply to businesses engaged in activities that are subject to tax under two or more classifications on the same revenue in one or more cities with an eligible gross receipts tax, or external credit. The purpose of the MATC is to ensure B&O Taxes are not paid by the same business more than once on the same amount. That is, the MATC gives a credit for the lesser of the selling taxes or manufacturing taxes on revenue that is taxed under both the manufacturing classification and the retail and wholesale classifications. Any business or person that extracts, manufactures, or prints then sells a product on Bainbridge Island that has been subject to an eligible gross receipts tax on the extraction, manufacture, or printing of a product is eligible for the credit. Any business or person that manufactures a product off of the island in another city that imposes an eligible gross receipts tax, and then sells the product on the island is eligible for the credit. In order to qualify as an eligible gross receipts tax, the tax must be imposed at the local level.
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Apportionable income means the gross income of the business taxable under the service classifications of a city’s gross receipts tax, including income received from activities outside the city if the income would be taxable under the service classification if received from activities within the city, less any exemptions or deductions available.
Compensation means wages, salaries, commissions, and any other form of remuneration paid to individuals for personal services that are or would be included in the individual’s gross income under the federal Internal Revenue Code (IRC).
Customer means a person or entity to whom the taxpayer makes a sale or renders services, or from whom the taxpayer otherwise receives gross income of the business.
Customer location means the following:
- For a customer not engaged in business, if the service requires the customer to be physically present, where the service is performed.
- For a customer not engaged in business, if the service does not require the customer to be physically present:
- The customer’s residence; or
- If the customer’s residence is not known, the customer’s billing/mailing address.
- For a customer engaged in business:
- Where the services are ordered from; or
- At the customer’s billing/mailing address if the location from which the services are ordered is not known; or
- At the customer’s commercial domicile if none of the above are known.
The customer location of a customer under (ii) and (iii) is determined based on a cascading method or series of steps. Only if the first step is unknown may the taxpayer move to the next step and so forth.
Extracting means the activity engaged in by an extractor and is reportable under the extracting classification.
Extractor means every person who from the person's own land or from the land of another under a right or license granted by lease or contract, either directly or by contracting with others for the necessary labor or mechanical services, for sale or for commercial or industrial use, mines, quarries, takes or produces coal, oil, natural gas, ore, stone, sand, gravel, clay, mineral or other natural resource product; or fells, cuts or takes time, Christmas trees, other than plantation Christmas trees, or other natural products; or takes fish, shellfish, or other sea or inland water foods or products. "Extractor" does not include persons performing under contract the necessary labor or mechanical services for others; or persons meeting the definition of farmer.
Extracting for Hire means labor or mechanical services performed under contract for an extractor. Gross income is allocated to where the activity occurs.
Gross Income of the Business means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences if indebtedness, interest, discount, rents, royalties, fees, commissions, dividends, and other emoluments however designated, all without any deduction on account of the cost of tangible property sold, the cost of materials used, labor costs, interest, discount, delivery costs, taxes, and any other expense whatsoever paid or accrued and with any deduction on account of losses.
Gross Proceeds of Sales means the value proceeding or accruing from the sale of tangible personal property, digital goods, digital codes, digital automated services or for other services rendered, without any deduction on account of the cost of property sold, the cost of materials used, labor costs, interest, discount paid, delivery costs, taxes, or any other expense whatsoever paid or accrued and without any deduction on account of losses.
Gross Receipts Tax means a tax measured by the amount of, or economic results of, business activity conducted in a city or county within the United States or within a foreign country. The term includes taxes measured in whole or in part on net income or gross income or receipts. “Business activities tax” does not include a sales tax, use tax, or a similar transaction tax, imposed on the sale or acquisition of goods or services, whether or not denominated as a gross receipts tax or a tax imposed on the privileged of doing business.
Gross Revenue on the Island means any revenue generated as the result of engaging in business within the jurisdictional boundaries of the City. Gross revenue means all revenue generated by the business when the business is physically located within the jurisdictional boundaries of the City. The City does not acknowledge a distinction between wholesale and retail for Business & Occupation Tax purposes.
Individual means any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee of that taxpayer.
Long-term Rental means the renter has complete dominion and control of property for thirty (30) days or longer.
Manufacturing means the activity conducted by a manufacturer and is reported under the manufacturing classification. Manufacturing is all activities wherein labor or skill is applied by hand or machinery to materials or ingredients so that, as a result thereof, a new, different, or useful product is produced for sale or commercial or industrial use. The measure of tax is the value of products, including byproducts, which is allocated to where the manufacturing activity takes place, irrespective of where the goods are sold. The value to products is generally determined by the selling price.
Manufacturer and "To Manufacture" means every person who, either directly or by contracting with others for the necessary labor or mechanical services, manufactures for sale or for commercial or industrial use from the person's own materials or ingredients any products. When the owner of equipment or facilities furnishes, or sells to the customer prior to manufacture, materials or ingredients equal to less than twenty percent (20%) of the total value of all materials or ingredients that become a part of the finished product, the owner of the equipment or facilities will be deemed to be a processor for hire, and not a manufacturer.
"To manufacture" means all activities of a commercial or industrial nature wherein labor or skill is applied, by hand or machinery, to materials or ingredients so that as a result thereof a new, different or useful product is produced for sale or commercial or industrial use, and shall include:
- the production of special made or custom made articles;
- the production of dental appliances, devices, restorations, substitutes, or other dental laboratory products by a dental laboratory or dental technician;
- crusting and/or blending of rock, sand, stone, gravel, or ore, and
- the producing of articles for sale, or for commercial or industrial use from raw materials or prepared materials by giving such materials, articles, and substances of trade or commerce new forms, qualities, properties or combination including, but not limited to, such activities as making, fabricating, processing, refining, mixing, slaughtering, packing, aging, curing, mild curing, preserving, canning, and the preparing and freezing of fresh fruits and vegetables.
"To manufacture" shall not include the production of digital goods or the production of computer software if the computer software is delivered from the seller to the purchaser by means other than tangible storage media, including the delivery by use of a tangible storage media where the tangible storage media is not physically transferred to the purchaser.
Person means any individual, receiver, administrator, executor, assignee, trustee in bankruptcy, trust, estate, firm, co-partnership, joint venture, club, company, joint stock company, business trust, municipal corporation, political subdivision of the State of Washington, corporation, limited liability company, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, non-profit, or otherwise and the United States or any instrumentality thereof.
Physical Presence Nexus means the physical presence as a nexus standard, which need only be demonstrably more than the slightest presence. This nexus standard is used to determine the necessity of City business licensing and B&O taxation. Per RCW 82.04.067(1)(c)(ii) and WAC 458-20-193, activities which establish a physical presence nexus within the City include but are not limited to:
- having an employee working in the State and, subsequently, in the City
- having property in the State, and, subsequently, in the City
- having a stock of goods in the State, and, subsequently, in the City, including inventory held by a marketplace facilitator or another third-party representative
- renting or leasing tangible personal property in the State, and, subsequently, in the City
- having an agent or third-party representative engage in activities that are significantly associated with establishing or maintaining a market in the State and, subsequently, in the City
- soliciting sales in the State and, subsequently, in the City, through employees or other representatives
- installing or assembling goods in the State and, subsequently, in the City, either by employees or other representatives
- constructing, installing, repairing, or maintaining real property or tangible personal property in the State and, subsequently, in the City, either by employees or other representatives
- providing services in Washington and, subsequently in the City, such as accepting returns or providing product training, either by employees or other representatives
- delivering goods into Washington and, subsequently, in the City, other than by mail or common carrier, including using the seller's own vehicles
- having an exhibit at a trade show to maintain or establish a mart for in the State and, subsequently, in the City, except as provided in Special Notice titled Trade Convention Exception from Nexus for Retail Sales
Primarily assigned means the business location of the taxpayer where the individual performs his or her duties.
Processing for Hire means the performance of labor and mechanical services upon materials or ingredients belonging to others so that as a result thereof a new, different or useful product is produced for sale or commercial or industrial use. The gross income is allocated to the location where the processing activity takes place.
Reporting Period means a twelve-month period beginning the first day of January of each year (annual).
Retailing means sales of tangible personal property, digital goods, lodging, and labor and services with respect to installing, repairing, altering, imprinting or improving of tangible personal property of or for consumers. Retailing is the activity of engaging in making sales at retail and is reported under the retailing classification.
Retail Service means the sale of or charge made for personal, business, or professional services including amounts designated as interest, rents, fees, admission, and other service emoluments however designated, received by persons for a variety of services performed for consumers, such as: amusement and recreation services, title insurance and escrow services, credit bureau services, landscape maintenance, renting or leasing tangible personal property, physical fitness services, dating services, tattoo and tanning, and service charges associated with tickets to professional sporting events.
Service-taxable Income or Service Income means gross income of the business subject to tax under either the service or royalty classification.
Services and Other Activities means gross income from every business activity for which no other specific tax classification applies. This activity covers a variety of professional services, such as lawyers, doctors, architects, financial institutions, accountants, and consultants. Income may be allocated to the City using a two-factor apportionment formula as computed on Schedule A.
Short-term Rental means the renter has dominion and control (within specified parameters) for less than thirty (30) days.
Tax period or Tax Year or Taxable Year means the the calendar year during which tax liability is accrued. If taxes are reported by a taxpayer on a basis more frequent than once per year, taxpayers shall calculate the factors for the previous calendar year for reporting in the current calendar years and correct the reporting for the previous year when the factors are calculated for that year, but not later than the end of the first quarter of the following year.
Tax Return means the document(s) a person is required by the City to file to satisfy or establish a tax or fee obligation that is administered or collected by the City and that has a statutorily defined due date.
Taxable Presence in Another Jurisdiction means the business meets any of the following requirements in the current or prior calendar year as of January 1,2020:
- Is subject to a business activities tax by another state or country on income received from engaging in apportionable activity.
- Has a physical presence nexus in the other state or country.
- Has more than $100,000 in gross receipts sourced or attributed to the other state or country whereby exceeding the receipts threshold means apportionable income attributed to another state or country is included along with its retail and wholesale sales sourced to the same state or country.
- Is organized or commercially domiciled in the other state or country
Temporary Stationary Business means any business carried on at the same fixed location within the City for not more than one day per week and not more than four consecutive weeks in one calendar year or any business carried on at the same fixed location in the City for not more than four consecutive days in one calendar year. (BIMC 5.40, Ord. 2003-22 § 8, Ord. 82-21 § 1, 1982)
Value of Products
Wholesaling means sales or services rendered to persons who are not consumers. This business activity applies when such sales or services would otherwise be taxable as a "retail sale" or "retail service" if sold to or performed for consumers. Wholesaling is engaging in the activity of making sales at wholesale, and is reported under the wholesaling classification.