Business and Occupation Tax.
The business and occupation (B&O) tax is imposed on the gross receipts of business activities conducted within the state, without any deduction for the costs of doing business. Businesses must pay the B&O tax even though they may not have any profits or may be operating at a loss. A taxpayer may have more than one B&O tax rate, depending on the types of activities conducted. The B&O tax rate varies by classification such as retailing, wholesaling, manufacturing, or other specialized service.
Public Utility Tax.
The public utility tax is a tax on public service businesses, including businesses that engage in transportation, communications, and the supply of energy, natural gas, and water. The tax is in lieu of the B&O tax. There are different rates depending on the specific utility activity.
Washington Main Street Program.
The Washington Main Street Program (Program) was established in 2005 to work in partnership with business and property owners in downtown and neighborhood commercial districts in rural and urban communities. The program is implemented by the Department of Archaeology and Historic Preservation (Department) to do the following:
Organizations must be officially designated a Washington Main Street community by the Program to be eligible to receive contributions through the Main Street Tax Credit Incentive Program. The Department may designate local programs for such assistance based on certain criteria, including:
The Department may not designate a program undertaken by a local government with a population over 190,000 people at the time of designation.
Main Street Tax Credit Incentive Program.
The Main Street Tax Credit Incentive Program is administered by the Department of Revenue (DOR) and allows persons making contributions to a local program, or generally to the state Main Street Trust Fund Account, to claim a B&O tax credit or a public utility tax credit. The contribution must be made in the same calendar year that the contribution was approved. The tax credit is limited to an amount equal to:
The tax credit must be claimed in the calendar year immediately following the calendar year in which the credit was approved and the contribution was made.
The Main Street Tax Incentive Program has certain limits and is provided on a first-come basis. No person may receive a tax credit over $250,000 per calendar year. The total tax credits allowed for each designated local program may not exceed $160,000 per calendar year. The total tax credits allowed statewide may not exceed $5 million per calendar year.
For purposes of the Main Street Tax Incentive Program, the population limit of 190,000 is determined at the time that the Department designates the program. The process by which a person approved for a tax credit under the Main Street Tax Incentive Program must provide the approved contribution to the DOR is clarified as follows: