Tacoma Tax & License Requirements for Small Business

Wanting to start a small business in the City of Tacoma?    You’ll need to obtain a business license if you’re within the city limits.  Unfortunately the city also imposes a business and occupation tax as well as a home based business fee.  

Everyone conducting business within the Tacoma City limits must obtain a business license.  The fee for this license is $80 and is due annually by January 31.  If you start your business after July 1 of the year then the prorated license fee is $40 for the remainder of the year.  If your annual income is less than $10,000, then your business will be placed on a non-filing status and you will not owe the $80 fee.  The easiest way to obtain a business license application is to visit http://tacomataxCPA.com and download “City of Tacoma – Annual Business License Application”.  You may also call the City of Tacoma Finance Department at (253)591-5252 and request that a copy of sent or faxed to you.  Registering with the State of Washington Department of Revenue does not fulfill your requirements with the City of Tacoma.  It is recommended that you have your tax accountant or CPA assist you with licensing your small business.

If your Tacoma business is based out of your home you also have an additional requirement.  The City of Tacoma requires you to file a Home Occupation Agreement.  This agreement states that you will follow all home based business requirements as set forth by the city.  The filing fee for this form is $75.  This is a one time fee.  You can download the form at http://tacomataxCPA.com by clicking on “City of Tacoma – Home Occupation Agreement”.  This form can also be obtained from the City of Tacoma Finance Department by calling (253)591-5252.  Again, have your tax accountant or Certified Public Accountant assist you.

The city of Tacoma is one of 39 cities in Washington State that imposes a city Business and Occupation tax.  If you do business within the City of Tacoma or do business within the city of Tacoma through a contract then you are required to file a B&O tax return.  Businesses with a gross income of $70,000 or less are not required to pay any tax.  The B&O tax rates vary depending on your industry (from .00153 for Retail businesses to .004 for Service businesses).  The specific rates are listed at http://tacomataxCPA.com.  This tax is applied to the total revenue you have received (minus refunds, etc).  No deduction is allowed for most business expenses.   It is important to make sure you file your B&O tax return on time to avoid the 7% late filing fee.  Your tax accountant or CPA can help you avoid errors in completing this tax return.

Tax accountant placeholder has a law degree and masters in tax law from the University Of Washington School Of Law.  He has been a guest tax expert on the radio.  He advises small business in the Seattle Bellevue Tacoma Federal Way Puyallup area on various tax issues.  His firm, Huddleston tax accountants, also provides tax preparation service, quickbooks consulting, and general accounting and bookkeeping service.  Seattle Bellevue tax accountant placeholder is a frequent publisher of tax saving ideas.