Washington State Business & Occupation (B&O) tax calculator for self-employed and small businesses. Computes tiered rates, small business credit, quarterly estimates, and filing deadlines. Triggers on WA B&O, Washington business tax, gross receipts tax, DOR filing.
Compute WA Business & Occupation tax liability for self-employed individuals and small businesses. Handles tiered Service & Other Activities rates, small business credit phase-out, quarterly estimated payments, and filing deadlines per WA DOR rules.
Washington's B&O tax is a gross receipts tax — it applies to total revenue, not profit. There are no deductions for expenses, labor, materials, taxes, or other costs of doing business. This makes it fundamentally different from federal income tax. A business that grosses $150K but nets $50K pays B&O on the full $150K.
Most self-employed professionals (software engineers, consultants, freelancers) fall under Service & Other Activities. Rates are tiered based on the prior calendar year's gross income for the taxpayer or their affiliated group2.
| Prior Year Gross Income | Rate | Source |
|---|---|---|
| Under $1,000,000 | 1.50% | DOR Rate Changes |
| $1,000,000 – $4,999,999 | 1.75% | DOR Rate Changes |
| $5,000,000+ | 2.10% | DOR Rate Changes |
Exceptions: Hospitals and select advanced computing businesses continue paying the flat 1.5% rate regardless of income level2.
| Classification | Rate | Source |
|---|---|---|
| Retailing | 0.471% | DOR B&O Classifications |
| Wholesaling | 0.484% | DOR B&O Classifications |
| Manufacturing | 0.484% | DOR B&O Classifications |
| Child Care | 0.484% | DOR B&O Classifications |
The full list of 50+ classifications is available at the DOR B&O Tax Classifications page.
Service & Other Activities: Software engineers, consultants, freelance writers, graphic designers, accountants, attorneys, architects, property managers, marketing agencies, SaaS companies3.
Retailing: Selling tangible goods to consumers, restaurants, retail stores, e-commerce selling physical products, custom software sold as a product3.
Wholesaling: Selling goods to other businesses for resale, distribution companies, B2B product sales3.
Manufacturing: Producing goods from raw materials, food production, printing, fabrication, assembly3.
If income spans multiple classifications, report each portion under its own classification. The Multiple Activities Tax Credit (MATC) prevents double-taxation when income is taxable under more than one classification — for example, a business that both manufactures and sells at retail. The MATC allows you to claim a credit against the manufacturing B&O tax for the portion also subject to retailing B&O tax4.
WHEN a business activity does not clearly fit a single classification, consult the DOR Classification Definitions or the Common Business Activities guide.
An additional B&O surcharge applies to businesses with at least $250 million in Washington taxable income5.
| Item | Detail | Source |
|---|---|---|
| Threshold | $250,000,000 in WA taxable income | ESHB 2081 |
| Rate | 0.5% on income exceeding $250M | ESHB 2081 |
| Effective period | January 1, 2026 – December 31, 2030 | ESHB 2081 |
| Exemptions | Manufacturing, food/prescription drug sales, timber, petroleum | AWB — HB 2081 Summary |
Select advanced computing firms pay a 7.5% B&O surcharge with an annual cap of $75 million, effective January 1, 20265.
The credit can reduce or eliminate B&O tax for small businesses6.
| Filing Frequency | Credit Amount | Source |
|---|---|---|
| Monthly | $160 | DOR Small Business Credit Tables |
| Quarterly | $480 | DOR Small Business Credit Tables |
| Annual | $1,920 | DOR Small Business Credit Tables |
Eligibility: Must report ≥50% of total B&O taxable amount under Service & Other Activities, Real Estate Brokers, or Contests of Chance6.
Non-service businesses: $55/month ($165/quarter, $660/year)6.
| Quarterly Gross | Credit | Effective Tax |
|---|---|---|
| Under $28,000 | Full ($480) | $0 |
| $28,000 – $56,000 | Partial (linear phase-out) | Reduced |
| Over $56,000 | $0 | Full rate |
Source: DOR Small Business Credit Tables
If quarterly_gross <= $28,000:
credit = $480
elif quarterly_gross <= $56,000:
ratio = (quarterly_gross - $28,000) / $28,000
credit = $480 × (1 - ratio)
DOR Special Notice — Service and Other Activities Rate Changes (citing ESHB 2081, Chapter 240, Laws of 2025, Sec 109) ↩ ↩2
Association of Washington Business — HB 2081 Summary and ESHB 2081 Bill Summary ↩ ↩2
DOR — Small Business Tax Credit Tables and WAC 458-20-104 ↩ ↩2 ↩3