The B&O tax is a gross receipts tax levied on a person or company for the act or privilege of doing business in Kent. It is part of a business’ operating overhead.
The B&O tax has two components: gross receipts tax and square footage tax. You are required to report both gross receipts tax and the square footage tax, but you only have to remit the greater of the two amounts.
The gross receipts tax is measured on the value of products, gross proceeds of sale, or gross income of the business. There are no deductions for labor, materials, rent, or other costs of doing business. The tax rate varies depending upon the types of business activities you are engaged in.
The square footage tax is measured on the total space used for business purposes in Kent. The square footage tax rate varies depending on whether the space is used for warehousing or for other business purposes.
Am I Subject to the B&O tax?
If you engage in business activities within Kent then you must register and file B&O tax returns and obtain a City Business License. “Engaged in business” broadly includes all activities that a person would commence, conduct, or continue business in Kent. KCC 3.28.030 provides a non-exclusive list of activities that constitute “engaging in business” in Kent.
Every person doing business in Kent is required to file a return unless you have been assigned an active non-reporting filing status by prior approval of the Tax Division.
Gross receipts tax applies if the gross income is in excess of the threshold of $62,500 per quarter (or $250,000 per year for annual filers).
Square footage tax applies to warehouse floor space in excess of the threshold of 4,000 square feet, or other business floor space in excess of the threshold of 12,000 square feet. If the square footage exceeds either threshold, then the entire square footage is used in the calculation of the square footage tax.
How Do I Register to File B&O Tax Returns?
You can begin the B&O tax registration process at TaxFile.KentWA.gov and it generally takes two business days to complete.
A separate tax return is required for each Unified Business Identifier (UBI) used by your business for Kent activity. Enter only one city business license number issued for each tax return. A separate City Business License is required for each facility your business maintains within city limits.
How Do I File My Taxes Annually?
A business may request an annual filing status by contacting the B&O Tax Division at 253-856-6266 or Business-occupation@KentWA.gov. The request should be made prior to the due date for which the quarterly return(s) would otherwise be due, to avoid incurring late filing penalties. To qualify, the following eligibility requirements must be met.
B&O tax due must be less than $1,000 during the previous calendar year for which annual filing status is requested. A newly registered business, must "reasonably believe" that it will owe less than $1,000 in B&O tax for the calendar year.
The business does not generate more than 40 percent of its annual gross income in any quarter of the calendar year (i.e. it is not a "seasonal business"). A newly registered business, must "reasonably believe" that it will not earn more than 40 percent of its annual gross income within a single quarter.
How Do I Amend a Previously Submitted B&O Tax Return?
Use a copy of the originally filed tax return and on the top of the page write, “AMENDED” in large letters.
Strikethrough any erroneous figures or highlight corrections. Make the appropriate corrections on the return.
If you owe money then include a check with your mailed in amended return.
You may request a refund in writing either by email or mail. State the basis for the refund and include supporting documentation. Refund requests will be accepted only for tax periods within the past four years which have not been subject to assessments or judicial proceedings (KCC 3.29.100)
Mail amended return(s), supporting documentation and, if tax is due, check to:
City of Kent
Attn: Customer Services
220 4th Avenue South
Kent, Washington 98032-5895
How Do I Update The Business Information On My Tax Registration Account?
Your business information can be found in your online profile at TaxFile.KentWA.gov. The contact information for the person filing the returns can be edited directly from this page.
If you need to change the business mailing address and/or physical location on file, either use the “Business Changes” checkboxes on your return to request the change, or contact the Tax Division to request the changes.
If you type a new address on you return without checking one or more boxes in the “Business Changes” section of the return, the information assigned to your B&O tax registration account will not change.
How Do I Pay My Taxes Online?
The payment options will be provided towards the end of the online filing process at TaxFile.KentWA.gov and include the following:
eCheck – There is no fee charged for this transaction. You will need to enter the bank account number and routing information to make a one-time payment permitting the City to withdraw the amount that you authorize.
Credit Card - A convenience fee of 2.6% of the transaction amount will be charged to your Visa or MasterCard credit card. You will need to enter the credit card information to make a one-time payment.