Washington State Tax Updates

Taxpayers are required to keep records for the most recent five-year return period. Businesses must keep open for examination by the City’s Finance Director or designated agent all books, records, invoices, receipts, etc. The advantage of the above for agents is agents do not have to file a return in all the different jurisdictions in which their clients reside – filing is the broker’s responsibility. Tax Returns are due April 15 of the year after the tax reporting year. Report revenue under Manufacturing if you make new or different products from raw or prepared materials. If you don’t pay them on time, there’s a 1% penalty for every late month.

Most taxpayers required to collect sales tax are assigned a monthly reporting frequency. Monthly returns are due by the 25th day of the month following the tax month. Similarly, quarterly returns are due by the 25th day of the month following the end of the quarter and annual filers’ returns are due by January 25 of each year. B&O, sales, use, and other miscellaneous taxes administered by the DOR are reported together on a combined excise tax return.

Retailing/Retail Service

Currently, two localities in the state of Washington have separate minimum wages and labor rules. Seattle’s minimum wage is $17.27 per hour, while the city of SeaTac has a $17.54 hourly minimum wage. With even one employee, your responsibilities as an employer increase exponentially. From payday requirements to workers’ compensation policies, employers in Washington have to work hard to remain compliant with the state’s labor laws. In general, Washington levies 45 different taxes depending on the type of business or sales your business is engaged in, from liquor sales to refuse collection. This is because LLCs receive their tax classification from the IRS based on the number of Members (owners) your LLC has.

If you haven’t paid your estimated tax payment by April 18th, 2022 then you’ll have to pay penalties and late fees. If you’re just looking for Federal Tax return information you can skip below to point #5. Washington has also codified a trailing nexus threshold, which conclusively deems a business to continue for one calendar year after the calendar year in which it ceased to meet any of the economic nexus thresholds. Nelson CPA publishes this blog to help and encourage small business owners. Get the fastest information, worry-free services, and expert support you need. If you’re looking for more help with compliance, our Worry-Free Compliance Service can help you stay in good standing with the state by keeping track of your business’s required filing due dates.

Washington LLC Taxes FAQs

Washington’s B&O tax provides one example of this state tax nuance, having adopted specific standards that vary based on the business activity conducted. The Multistate Tax alert archive includes external tax alerts issued by Deloitte Tax LLP’s Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters.

If any of these businesses serve customers within the City of Bellevue and/or in other Washington cities, they will calculate how that service income should be apportioned. Extracting for Hire means labor or mechanical services performed under contract for an extractor. The general instructions below, presented as a series of tabs, provides a basic, working description bookkeeping for startups of the City’s B&O Tax Return. It is current at the time of publication; however, potential future changes in the City of Bainbridge Island Municipal Code (BIMC) or State law may have an impact on the information presented. In the event of a conflict between the information presented in this guide and an ordinance of the City, the ordinance prevails.

Step 4: Prepare to file and pay your Washington small business taxes

We strongly recommend working with an experienced accountant in Washington to help make sure you file your federal, state, and local taxes correctly. Being taxed as an S-Corp can help businesses (with established profits) save money on self-employment taxes. Alternatively, you have the option of requesting an “elective status” for your LLC. Once granted, this elective status means the IRS will treat your LLC as a Corporation (either an S-Corporation or C-Corporation) for tax purposes. By default, a Washington LLC is taxed by the Internal Revenue Service (IRS) based on the number of Members the LLC has. Not only will an EIN number be used to open an LLC bank account, but it will also be used for filing taxes with the local, state, and federal governments.

Being a gross receipts tax means there are no deductions for labor, materials, or other costs of doing business. The City does not distinguish between wholesale and retail for B&O Tax purposes. The tax is filed annually reporting gross revenue for the prior calendar year beginning January 1.