• Exemptions, Deductions & Credits

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    There are exemptions from the gross receipts tax and deductions allowed for certain businesses activities or sources of income. Persons who engage in business activities subject to tax under two or more classifications on the same revenues may be eligible for the multiple activities tax credit.

    Common exemptions and deductions are listed here. Please reference the City Code for further detail. If you have specific questions about these or other exemptions or deductions, please contact the Tax Division.

    Exemptions

    • 2019 taxable gross receipts equal to or less than $41,250 per quarter ($165,000 annually).
      • Annual Reconciliation Required: For example, if you are under a Quarterly reporting period exemption threshold and do not pay the tax, but you are over the annual exception threshold by year end, then the tax becomes due. If you believe you will be over the exemption threshold for the year you can pay the tax at this time.
    • Manufacturing, selling or distributing motor vehicle fuel
    • Liquor, beer and wine sales
    • Sale, lease or rental of real estate. (No exemption is allowed for license to use real estate or for amounts received as commissions.)
    • Insurance agents (brokers are subject to tax)
    • Farm products or edibles raised, produced or manufactured in Washington and sold by the farmer
    • Certain activities for nonprofit organizations holding Federal IRS nonprofit status under 26 U.S.C Section 501(c)(3), (4), or (7).
    • Casual and isolated sales, such as an accountant selling his or her office furniture
    • Day care homes in residences

    Deductions

    Deductions are to be included in the gross receipts amounts and then deducted when calculating the taxable amount on which the gross receipts tax rate applies.

    • Retail or wholesale sales delivered outside Bellevue
    • Cash discounts taken by customers
    • Credit losses or bad debts sustained by sellers