Does New B&O Tax Apply to Your Business?

One of the elements of the recently adopted tax package is a temporary (5/1/2010 through 6/30/2013) B&O surcharge of 0.3% which is applied to select businesses in Washington State. AGC has had a few calls wondering who the tax applies to.

Firms that provide retail (RCW 82.04.050) and wholesale (RCW 82.04.060) construction services are NOT subject to the added B&O surtax.

The easiest way to determine whether a business is subject to this surcharge is to determine what their current B&O rate is. If the business now pays a 1.5% B&O tax they will be assessed the added 0.3% surtax.

Here are the list of business groups subject to the surtax and the pertinent section of state law describing their B&O tax:

Real Estate Brokers (RCW 82.04.255)
Gambling businesses (RCW 82.04.285) and
Service and other activities (RCW 82.04.290 (2)(a)). This broad category includes architects engineers doctors dentists lawyers accountants consultants and many other service providers. They all now pay B&O tax at the 1.5% rate and will be subject to the surtax.