The gross receipts B&O tax is primarily measured on gross proceeds of sales or gross income for the reporting period. For purposes of the gross receipts tax, business activities have been divided into several classifications discussed below.
Businesses conducting multiple activities will report in more than one tax classification and may qualify for a multiple activities tax credit. The current gross receipts tax rate of 0.1496 percent applies to all gross receipts tax classifications.
Gross Receipts Tax Classifications:
Wholesaling
Sales of products or services to another person or business who intends to resell your product or service to a consumer. The B&O tax is calculated on the wholesale selling price.
Retailing/Retail Service
Businesses that sell products and retail services to consumers are defined as retailers. Retail services include installation, repair, cleaning, altering, improving, constructing, or decorating real or personal property for consumers. The B&O tax is calculated on gross receipts.
Services and Other Activities
Businesses that provide personal and professional services, such as lawyers, doctors, accountants, architects, financial institutions, real estate brokers, and businesses that are not specifically taxable under any other classification will report under Service & Other Activities.
If any of these businesses serve customers within the City of Bellevue and/or in other Washington cities, they will calculate how that service income should be apportioned.
The apportionment of service income allows businesses to divide their taxable revenue and their taxes proportionately among the Washington cities in which they do business. Businesses that report revenue under the classification of "Service and Other (Apportioned)" and will calculate the apportionment of this revenue using Service Income Apportionment Worksheet (Schedule A).
Manufacturing/Processing for Hire
Manufacturing is the business of producing articles for sale from raw or prepared materials by giving these matters new forms or qualities, such as fabricating, processing, refining, mixing, packing, canning, etc.
Processing for hire means the performance of labor and mechanical services upon materials or ingredients belonging to others so that as a result a new, different or useful product is produced for sale or commercial or industrial use. B&O tax is calculated on gross receipts.
Extracting/Extracting for Hire
Extracting is the taking of natural products, such as logging, mining, quarrying, etc. B&O tax is calculated on the value of products extracted, determined by selling price.
Extracting for hire means a person who performs under contract necessary labor or mechanical services for an extractor. B&O tax is calculated on gross receipts.