All individuals and firms doing business in Bellingham, whether located inside or outside the City limits, must register with the City Finance Department and are subject to the business and occupation (B&O) tax unless, specifically exempted by Bellingham Municipal Code.
B&O taxes are based on the gross revenues of a business. This is similar to the taxation method used by the State of Washington. These tax revenues are paid into the General Fund and are used to provide a wide variety of City services, including Police, Fire and Parks operations and Library services.
Beginning January 1, 2008, if your business pays B&O taxes to the City of Bellingham under the Retailing, Wholesaling, or Service and Other Activities classifications, and you engage in business in other cities, you may need to change how you report revenue on your City B&O tax return.
Why the Change?
The Washington State Legislature has enacted a law, RCW 35.102.130, which requires all cities with local B&O taxes to adopt certain allocation and apportionment provisions effective January 1, 2008.
What has Changed?
Under previous law, revenues under these classifications were taxed in the city where the majority of the activity takes place, and credits applied if your business paid B&O tax in another city.
After January 1, 2008, the way you allocate or apportion revenue to cities in which you engage in business will vary, depending on the classification under which you report your revenue:
Additional Information
These changes took effect in the tax reporting period beginning January 1, 2008. For more information contact the Finance Department.
