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Business and Occupation Tax

Effective 1/1/2016

First filing due 4/30/2016

for 1st Quarter 2016

Outreach and Education

In early December, the City mailed out the Business and Occupation Tax guide to all businesses currently licensed within the City. If you do not currently hold a City of Renton business license, but would like to be on the mailing and distribution list, please send your name, business name, and mailing address to tax@RentonWa.gov and we will include you on our B&O mailing distribution list.

Beginning in early February 2016, the City has scheduled several Business and Occupation Tax training/informational sessions.  These sessions will provide more detailed information to the businesses affected by the new Business and Occupation Tax and how it will be implemented.  Since space will be limited at each session, please register for a session that works best for you: City of Renton Business and Occupation Tax Session Registration.

Overview

Businesses with gross receipts of $1.5 million or more per year, earned within the City of Renton, will be required to file and pay B&O tax. Businesses that are required to pay B&O tax do not pay the Per Employee Fee.  For more information, please see the City of Renton Business and Occupation Tax Guide or Renton Municipal Code (RMC) Chapter 5-25 (Business and Occupation Tax Code) and Chapter 5-26 (Tax Administrative Code).

Click here for the City of Renton's Online Business Tax Reporting portal.

What is a Business and Occupation (B&O) Tax? 

B&O is a gross receipts tax.  It is measured on the value of products, gross proceeds of sale, or gross income of the business activities conducted in the City of Renton. 

Who pays B&O Tax? 

In addition to businesses operating within the City limits, vendors and suppliers of goods and services being delivered within Renton city limits may also be subject to the B&O tax.  

When is payment due? 

The first reports and payments will be due 4/30/2016 for 1st Quarter 2016 - for quarterly filers only.  There are two types of filers: quarterly filers and annual filers.
 
Annual Filers - Businesses earning revenue between $1.5 million - $2 million per year will be put on an annual filing status. For annual filers, the B&O filing and reporting due date is aligned with the business license expiration date. Beginning January 1 2018 all businesses will have a license expiration date of January 31 and all annual filers will be reporting for the calendar year January through December.  If at the end of the reporting period the $1.5 million threshold has not been met, B&O taxes will not be filed, rather the Per Employee Fee will be due. See reporting dates below:
 
Business License Expiration
and B&O Filing Due Date
Reporting Period
(prior year)
January 31 January 1 - December 31
April 30 April 1 - March 31
July 31 July 1 - June 30
October 31 October 1 - September 30

Quarterly Filers - Any business not meeting the annual filer criteria above will be required to report and pay B&O taxes quarterly.  Quarterly returns and payment are due on or before the end of the month immediately following the end of the tax reporting quarter. See reporting dates below:
    Reporting Period
            
Ending
Return and Payment
Due
    March 31             April 30
June 30 July 31
September 30 October 31
December 31 January 31

What are the B&O tax classifications and rates?

For purposes of gross receipts tax, businesses have been divided into several classifications (see below).  Businesses conducting multiple activities will report in more than one tax classification. 

Activity Classification Tax Rate 
Retailing 0.050%
Retail Services 0.085%
Manufacturing/Processing for Hire 0.085%
Extracting/Extracting for Hire 0.085%
Wholesaling 0.085%
Printing/Publishing 0.085%
Services and Other Activities 0.085%

What tax credits are available and how are they claimed?

There are two types of credits available:

1. Multiple Activities Tax Credit (MATC), which is divided into two components:

  • External Credits: persons that engage in business activities that take place in one or more cities with an eligible gross receipts tax.
  • Internal Credits: credit for the sale of products within the same city that they extract or manufacture, credit for manufacturing products within the same city using ingredients they extracted, and credit for the sale of products within the same city they printed or published and printed. 
2. New Business Tax Credit

A $1,000 credit per full-time equivalent (FTE) may be credited against the B&O tax due for new businesses bringing fifty (50) or more new full-time equivalents (FTE) into the City for the first three (3) consecutive years (12 consecutive quarters).  Businesses must meet the following criteria:  

  • Has not engaged in business within Renton in the 10 years prior to the application of the credit
  • Employs fifty (50) or more full-time equivalents (FTE) within Renton.  An FTE is defined as 1,920 worker hours per calendar year
  • The total credit cannot exceed the total tax due 

For more information on MATC refer to the Renton Municpal Code (RMC) section 5-25-5 and 5-25-6 and for more information on the New Business Tax Credit refer to the Renton Municipal Code (RMC) section 5-25-12.

Click here for the B&O Schedule B – Tax Credit Form

What tax deductions are available and how are they obtained?

The following is a list of available deductions:

  • Membership fees and certain fees by non-profit youth organizations
  • Fees, dues, charges for non-profit organizations
  • Certain income from business activities of non-profit artistic and cultural organizations
  • Value of articles for use in displaying art objects or presenting artistic or cultural exhibitions, performances, or programs by non-profit artistic and cultural organizations
  • Daycare activities provided by non-profit organizations
  • Interest on loans to farmers and ranchers, producers or harvesters of aquatic products
  • Receipts from the sale of tangible personal property delivered outside of the State
  • Cash discounts taken by purchaser
  • Credit losses of accrual base tax payers
  • Repair, maintenance, replacement, etc. of residential structures and commonly held property for eligible organizations
  • Certain advertising fees for radio and television broadcasting
  • Any activity which the City is prohibited from taxing under the Constitution or laws of the State of Washington or the United States of America
  • Receipts from the sale of tangible personal property and retail services delivered outside of the City but within Washington
  • Certain professional employer services
  • Interest on investments or loans secured by mortgages or deeds of trust
  • Compensation received from public entities for the support of health or social welfare services

For more information on eligible tax deductions refer to the Renton Municipal Code (RMC) section 5-25-11

Click here for the B&O Schedule C – Deduction Form

How do I file and pay B&O taxes? 

You must file your quarterly return electronically, using the City of Renton's Online Business Tax Reporting portal.  You can access your account by searching for your business name and entering your business' unique security code.  Your security code will be mailed to you. For questions, please call 425-430-6950 or email us at Tax@Rentonwa.gov

How do I amend a previously submitted B&O Tax return?

You can amend a previously filed return online if you chose to mail in a hard copy follow the following steps. 

  1. Make a copy of the return you need to correct as originally filed.  
  2. At the top of the return write “AMENDED” in large letters.
  3. Cross out, with a simple line through, any erroneous figures using red or bold ink.  If possible highlight corrections so they will be easily seen.
  4. Make the appropriate corrections on the return and recalculate your totals.
  5. If you are amending your return and you owe money include a check or money order when you mail your amended return.
  6. If you are seeking a refund, included a letter or note with your amending return explaining the reason for the changes.
  7. Mail the letter, the amended return(s) and, if tax is due, a check/money order to:
City of Renton
Attn: Tax and License Division
1055 South Grady Way
Renton, WA 98057

The City may only honor refunds dating back four years prior to the year in which the refund request is made, so long as the period covered by the amended return has not been subject of an assessment or judicial proceeding.

How do I pay my taxes online?

After you have completed your online return, you will need to pay your taxes.  You will find your payment summary screen. You have the option of paying either:

  • eCheck – you can enter your bank account number and routing information to make a one-time payment.  The transaction is free and only authorizes the City to withdraw the amount you direct.
  • Credit Card – you can enter your credit card information for a one-time payment. Payments made with credit cards will be charged a fee of 2.5% of the transaction amount, which will be charged to the credit card.

You may also pay your B&O taxes by check or money order. Please be sure to include your UBI and filing number on your check. To ensure timely payment processing remit a copy of your B&O return with your payment.  Mail your payment and return to:

City of Renton
Attn: Tax and License Division
1055 South Grady Way
Renton, WA 98057