The square footage B&O tax was implemented to tax support space of offices whose business activities are not directly attributable to the generation of gross receipts to such activity. Generally, the tax applies to businesses that maintain headquarters, offices, facilities or other support groups in Bellevue where the office or facility itself does not generate revenue taxable under the gross receipts tax. If a business has both an administrative office and a sales location which generates revenue in Bellevue, they may need to report both the square footage of the administrative office and the gross receipts and/or square footage of the sales office.
Examples of businesses that pay the tax include headquarter offices and businesses that make out-of-city sales. The square footage B&O tax is reported under Tax Classification 8 (Square Footage) on the Quarterly tax return and is measured on floor area of office space computed on the nearest square foot.
The square footage B&O tax rate for 2023 is $0.3025034 ($30.25 cents) per taxable square foot per quarter or $1.2100136 ($1.21) per taxable square foot per year. This rate is adjusted each January based on the change in the Consumer Price Index to reflect the effects on inflation or deflation on the local economy.
Square Footage Tax Exemptions and Deductions:
- Offices with taxable square feet of 250 or less (Exemption).
- Offices which support business activity all or a portion of which is subject to the gross receipts tax (Deduction).
A Bellevue retailer who sells both in and out of Bellevue may deduct the percentage of office space used to support activity subject to the gross receipts tax, as noted in the following example:
|Sales||% of Total Sales|
|In-Bellevue Sales||$600,000||60% - (taxed under Retailing Gross Receipts Tax)|
|Out-of-Bellevue Sales||$400,000||40% - (deduction under Retailing Gross Receipts tax)|