Government

Business & Occupation Tax

The City of Tukwila’s adopted 2023-2024 Biennial Budget includes a B&O tax on businesses within Tukwila city limits that generate gross revenues greater than $750,000 annually, to fund public safety investments.  Tukwila Municipal Code Chapter 3.26 outlines the details of this tax.

Why is this tax needed?

Like many jurisdictions in Washington State, the City of Tukwila has experienced a growing fiscal imbalance for a number of years, forcing service and budget reductions. This is due to several factors, including expenses that are growing significantly faster than revenues, the 1% limitation on regular property tax, and the end of “streamlined sales tax” mitigation revenue coming from the State. Without a new ongoing revenue source, the City would be forced to make even more significant service cuts.

What will the money be used for?

The  B&O tax revenues will be directed towards Public Safety, funding seven positions previously frozen in the Tukwila Police Department. Quarterly reports will be provided to the Council and community on public safety funding associated with this tax.

What is a B&O tax?

The B&O tax is a gross receipts tax. That means it will be based on the gross proceeds of sales or gross income that a business earns. A Tukwila B&O tax is not the same as the Washington State B&O tax. Tukwila taxes are filed separately from state taxes.

When will it start?

To give businesses time to plan, this B&O tax will go into effect on January 1, 2024 and will apply to 2024 revenues.

Who will this tax apply to?

Business that maintain a physical address within the Tukwila city limits with gross revenues that are greater than $750,000 during a calendar year will be subject to the B&O tax.

Who will be exempt from the tax?

  • Businesses with annual gross revenues less than the $750,000 threshold
  • Nonprofit organizations exempt from federal income tax under Section 501(c)(3) of the Internal Revenue code
  • Businesses operating as a cardroom
  • Professional/semi-professional/amateur sports teams operating In Tukwila
  • Exemptions from the local B&O tax as required by Washington State and proposed by the City of Tukwila: TukwilaWA.gov/TukwilaB&OExemptions

How does our tax compare to other local cities?

Among our neighboring jurisdictions, Tukwila will have the lowest rates for a B&O tax and the highest revenue threshold.

Can I see examples of projected tax amounts?

More examples?

Remember: Businesses with annual gross revenues equal to or less than $750,000 pay NO B&O Tax.

Would you like to know more?

Please view this list of Frequently Asked Questions for more information.

 

Still have questions?

Send an email to B&OTax@TukwilaWA.gov.