File your Business and Occupation (B&O) Tax Return for 1st Quarter 2013.
Date: Thursday, June 20th Location: Centennial Building, Suites
11:30 AM to 1:00 PM 105 and 107
Phone: 253-856-6266 Address: 400 West Gowe Street
Kent, WA
Who should attend: Business owners, accountants, tax consultants, and interested parties
To register, visit KentChamber.com.
City Taxes
City taxes are administered by the Audit Division of the Finance Department located in the Centennial Building [400 West Gowe Street, Suite 406]. The Audit Division can be contacted by e-mail at Finance@KentWA.gov or by phone at 253-856-6266.
The City of Kent imposes the following taxes used to fund essential City services:
These taxes are remitted directly to the City of Kent. The City also receives a portion of the following taxes remitted as follows:
King County
- Property Taxes
- Real Estate Excise Tax
State of Washington
- Sales and Use Tax
- Lodging Tax
- Leasehold Excise Tax
- Brokered Natural Gas Use Tax
It is important that the business properly records the City of Kent’s Location Code [1715] on the Department of Revenue Combined Excise Tax Return to ensure that the City’s portion of the state collected taxes are remitted to the City.
Please see Helpful Contact Information for the City of Kent as well as other agencies. The Guide to Kent’s Business and Occupation Tax provides a comprehensive discussion of the City’s business & occupation tax and an overview of other taxes imposed by the City.
Note all possible applications of the tax requirements are discussed. For clarification of your individual circumstances, consult the Kent City Code (KCC), your tax advisor or both.
Note:
Sales and use tax information is available from the Washington State Department of Revenue.
The material in this site is intended for general informational purposes only. While it is current at the time of publication, changes to the Kent City Code (KCC) or state law may invalidate some of this information. In the event of a conflict between this site and the KCC, the KCC prevails.
(Kent City Council Ordinances 4054 and 4055)
Overview:
Effective January 1, 2013 the City adopted a business and occupation (B&O) tax. In general, all businesses subject to the State of Washington B & O tax, whether located within or outside Kent city limits, that conduct business activities in Kent are subject to the city’s tax.
Section 3.28.030 of the Kent City Code establishes the definition of terms used on this website and certain related referenced documents, e.g. “engaging in business” and “manufacturer”.
Resources:
*We encourage taxpayers to use our interactive online forms which will automatically calculate your return and email you a completed copy of your forms based on the information you provide. Once printed, you will need to sign and mail the forms with your payment. However, if no payment is due and you have filed electronically then you do not need to mail in a copy of your completed form. The City is currently developing an online payment option and will make an announcement when it becomes available.
What is a Business & Occupation (B&O) tax?
The B&O tax is a gross receipts tax. It is measured on the value of products, gross proceeds of sale, or gross income of the business for activities conducted in the City of Kent. There are no deductions for labor, materials, taxes, or other costs of doing business unless otherwise provided for in Section 3.28.100 of the Kent City Code.
Who is subject to the B&O tax?
Any individual or business required to obtain a City business license must also register with the City for B&O tax purposes through the city business license process (see Business Licenses). There is no fee associated with this registration.
In general, all businesses subject to the State of Washington business and occupation tax and conducting business activities within Kent city limits are subject to the City’s tax. However, Section 3.28.090 of the Kent City Code establishes twenty exemptions including the following:
- United States, the state of Washington, or any Washington state local government
- Non-profit corporations or non-profit organizations, except with respect to retail sales
- Public utilities
- Manufacture, sale or distribution of motor vehicle fuel
- Sale or distribution of liquor
It is important to note that vendors and other suppliers of goods and services to businesses located within Kent city limits may be subject to this tax.
The first $62,500 of gross receipts earned in any quarter is exempt from the gross receipts tax. Also, businesses with warehouse business floor space of 4,000 taxable square feet or less and total other business space of 12,000 taxable square feet or less would not be subject to the square footage tax. However, these businesses are still required to file a Business & Occupation Tax Return and applicable Schedules.
When is payment due?
The B&O tax is due and payable on or before the end of the month immediately following the end of the tax reporting quarter, e.g. 1st Quarter – April 30. Remember that only the higher of the gross receipts tax or the square footage tax is due.
Penalties and interest for late payments are charged as follows:
Penalties ($5.00 minimum)
One month or less overdue 5%
Over one month through two months 15%
Over two months 25%
The annual interest rate for 2013 is 2%
There is a “non-sufficient funds” (NSF) charge of $25.00
How do I file and pay the B&O tax?
Complete and sign the Business & Occupation Tax Return Form and the following schedules as applicable:
*Taxpayers are encouraged to use the City's interactive online forms option. Alternatively, taxpayers can still manually complete the tax forms and remit with payment to the City. Manually completed tax forms must be mailed to the City even if no payment is due.
Remit payment as follows:
City of Kent - B & O Tax
P.O. Box 84665
Seattle, WA 98124-5965
The City is currently developing an on-line tax filing and payment option and will make an announcement when this becomes available.
How do I amend a previously submitted business and occupation tax return?
- Make a copy of the return you need to correct as originally filed.
- At the top of the return write, "AMENDED" in large letters.
- Cross out, with a simple line through, any erroneous figures using red or bold ink. If possible highlight corrections so they will be easily seen.
- Make the appropriate corrections on the return and recalculate your totals.
- If you are amending your return and you owe money include a check or money order when you mail in your amended return.
- if you are seeking a refund include a letter or note with your amended return explaining the reason for any changes.
- Mail the letter and you amended return(s) to:
City of Kent
220 4th Avenue South
Kent, Washington 98032-5895
If you have any additional questions please call 253-856-6266 or contact us by email at Finance@KentWA.Gov.
The City may only honor refunds dating back four years prior to the year in which the refund request is made so long as the period covered by the amended return has not been the subject of an assessment or judicial proceeding. (KCC 3.29.100)
What are the B & O tax classifications and rates?
The B & O tax has two components: gross receipts and square footage. Most businesses will report in both the gross receipts business tax category and in the square footage category. Those businesses located entirely outside Kent city limits, but doing business in Kent will report only in the gross receipts category.
Business Activity Tax Rate
Manufacturing .046% (.00046)
Processing for Hire/Extractor for Hire .046% (.00046)
Wholesaling .152% (.00152)
Retailing .046% (.00046)
Services (including Retail Services) .152% (.00152)
Printing/Publishing .046% (.00046)
Extracting .152% (.00152)
Other Activities .152% (.00152)
The square footage tax component is based on the total taxable square footage of all business facilities maintained by a business within Kent city limits, applied as follows:
- Business Warehouse Facility - $.03 per square foot per quarter
- All Other Types of Facilities - $.01 per square foot per quarter
If the square footage tax due exceeds your B&O tax obligation in any quarter, the amount of that overage would be due with your B&O tax payment. If the square footage tax is less than your B&O tax obligation in any quarter, you will only pay the B&O tax.
What tax credits are available and how are they claimed?
The Multiple Activities Tax Credit (MATC) has two components:
- External Credits. Persons that engage in business activities that take place in one or more cities with an eligible B&O gross receipts tax.
- Internal Credits. Comprised of credit for the sale of products in the city that they extract or manufacture, credit for persons that manufacture products in the city using ingredients they extract, and credit the sale of products that they print, or publish and print in the city.
Schedule B – Multiple Activities Tax Credit Form must be completed and properly supported in order to claim this credit. See also Section 3.28.070 of the Kent City Code.
What tax deductions are available and how are they claimed?
Section 3.28.100 of the Kent City Code establishes ten deductions including the following:
- Retail or wholesale sales delivered outside of Kent
- Receipts from the sale of tangible personal property and retail services delivered outside of the City but within Washington
- Cash discounts taken by customers
- Credit losses or bad debts sustained by sellers
- Compensation from public utilities for health or social welfare services
- Professional employer services
Schedule C – Deduction Detail must be completed and properly supported in order to claim these deductions. In addition, Schedule A – Service Income Apportionment Detail must be completed and properly supported for amounts reported for the City of Kent.
(Kent City Code Chapter 3.18)
Overview:
This tax is similar to the gross receipts B&O tax except that it is imposed on utility businesses. The business activities affected by this tax are as follows:
- Water
- Sewer
- Drainage
- Garbage collection and disposal
- Electric and Natural Gas
- Cable
- Telephone and cellular
The City of Kent operates water, sewer, and storm drainage utilities. However, certain areas of the City receive water and/or sewer services from the following:
- King County Water District No. 111 (Lake Meridian area)
- Highline Water District (West Hill)
- Soos Creek Water & Sewer District (Southeast)
- Midway Sewer District (West Hill)
- Lakehaven Utility District (Southwest)
Section 3.18.010 of the Kent City Code establishes the definition of terms used on this website and certain related referenced documents, e.g. “gross income” and “cellular telephone”.
Resources:
Utility Tax Return
What is a utility tax?
The utility tax is a gross receipts tax. It is measured on the value from the performance of the particular public service business involved in the City of Kent. There are no deductions for the cost of the commodity, labor, or other costs of providing the service unless otherwise provided for in Section 3.18.020 of the Kent City Code.
Who is subject to the utility tax?
All organizations (including the City of Kent) providing the following services are subject to the utility tax:
- Water
- Sewer
- Drainage
- Garbage collection and disposal
- Electric and Natural Gas
- Cable
- Telephone and cellular
When is payment due?
The utility tax is due and payable on or before the end of the month immediately following the end of the tax reporting month, e.g. February – March 31. Taxpayers expected to owe less than $1,000 per month may submit taxes on a quarterly basis in which case the tax is due and payable on or before the end of the month immediately following the end of the tax reporting quarter, e.g. 1st Quarter – April 30.
There is a 10% penalty for all amounts 30 days or more past due. Interest is charged based on 1% of the amount past due (12% per annum). There is a “non-sufficient funds” (NSF) charge of $25.00
How do I file and pay the utility tax?
Complete and sign the Utility Tax Return
Remit payment as follows:
City of Kent
Finance Customer Services
220 4th Avenue South
Kent, WA 98032
The City is currently developing an on-line tax filing and payment option and will make an announcement when this becomes available.
What are the utility tax classifications and rates?
Business Activity Tax Rate
Telephone Business/Cellular Phones 6.0% (.06)
Electricity for Light and Power 6.0% (.06)
Cable Television Services 6.0% (.06)
Garbage Collection Services 7.8% (.078)
Water, Sewer and Drainage Services 13.0% (.13)
What tax deductions are available and how are they claimed?
Section 3.18.020 of the Kent City Code establishes the following deductions:
- Credit losses or bad debts sustained by the taxpayer
- Amounts derived from transactions in interstate and foreign commerce which the city is prohibited from taxing under the laws and Constitution of the United States
The credit losses must be reported on the Utility Tax Return and properly supported in order to claim this deduction. Interstate and foreign commerce does not have to be reported; however, the taxpayer must be able to support these items.
(Kent City Code Chapter 3.26)
Overview:
Section 3.26.010 of the Kent City Code establishes the definition of terms used on this website and certain related referenced documents, e.g. “admission charge” and “collecting entity”.
Resources:
Admissions Tax Return
What is an admissions tax?
Whenever a charge is collected for admission to any place or event for entertainment or recreation within the Kent city limits, an admissions tax is levied.
Admission charges are defined as a monetary charge for an event open to the public including, but not limited to the following:
- A charge made for season tickets or subscriptions
- A cover charge or charge made for use of seats and tables, reserved or otherwise, and similar accommodations
- A charge made for food and refreshments in any place where any free entertainment, recreation, or amusement is provided
- If a charge is made for entry onto the premises where an activity occurs (such as, without limitation, a bowling alley or ice skating rink), the combined charges are for entry plus the activity charge
- If a charge is made for entry onto a premises where a rental occurs, the combined charges for entry plus all charges for rental of equipment or facilities (but only if that rental is necessary to the activity for which a general admission is charged)
- Automobile parking charges if the amount of the charge is determined according to the number of passengers in the automobile
- Any other charge for entrance and observation
Who is subject to the admissions tax?
By way of illustration only, this tax applies to any non-exempt admissions charge collected for admission to any theater, cinema, dance hall, cabaret, adult entertainment cabaret, circus, side show, outdoor amusement park, dinner theater, music concerts, radio shows, and television shows.
Section 3.26.010 of the Kent City Code establishes the following exceptions:
- Not-for-profit organizations
- Public or private secondary or elementary schools and related student body associations
- Accredited colleges, junior colleges and universities and related student body association
- Federal, state and local governments (except activities operated the manner of a separate business enterprise, e.g. event center of golf course)
When is payment due?
The admissions tax is due and payable on or before the end of the month immediately following the end of the tax reporting quarter, e.g. 1st Quarter - April 30.
Interest is charged based on 1% of the amount past due (12% per annum) or $5.00, whichever is greater. There is a "non-sufficient funds" (NSF) charge of $25.00
How do I file and pay the admissions tax?
Complete and sign the Admissions Tax Return
Remit payment as follows:
City of Kent
Finance Customer Services
220 4th Avenue South
Kent, WA 98032
The City is currently developing an on-line tax filing and payment option and will make an announcement when it becomes available.
How is the admissions tax calculated?
The admissions tax is 5% of the gross receipts for each type of admission.
Illustration:
Regular admission $12.00
Number of admissions sold 1,000
Gross Receipts $12,000
Total Tax Due $600 ($12,000 * 5%)
This calculation must be performed for each different type of admission, e.g. adult, student, etc, for which a different admission price is charged.
(Kent City Code Chapter 3.21)
Overview:
Any person, corporation, association, organization or bona fide charitable or nonprofit organization intending to conduct any amusement games, bingo and raffles, punch boards and pull tabs, and social card games or any other gambling activity must register for gambling activity and obtain a City Business License prior to commencement of such activity. You must also register with the Washington State Gambling Commission.
Section 3.21.010 of the Kent City Code establishes the definition of terms used on this website and certain related referenced documents, e.g. "social card game" and "punchboards".
Resources:
Gambling Tax Return
Who is subject to the gambling tax?
All persons, associations, and organizations that have been duly licensed by the Washington State Gambling Commission to conduct or operate gambling activities
Section 3.21.010 of the Kent City Code establishes the following exemptions for bona fide charitable or nonprofit organizations as defined in Chapter 9.46 RCW provided that:
- The organization has not paid operating or management personnel, AND
- Combined gross receipts from bingo and amusement games less the amount awarded as cash or merchandise for prizes does not exceed $5,000 per year OR
- Gross receipts from raffles less the amount awarded as cash or merchandise for prizes does not exceed $10,000
Social Card Games:
The operation or conduct of social card games by any person, association, or organization as a commercial stimulant, as defined in Chapter 9.46 RCW, is prohibited with the City of Kent except as follows:
- Bona fide charitable or nonprofit organizations, as defined in Chapter 9.46 RCW
- Organizations lawfully operating in an area as described in RCW 9.46.295 and annexed by the City of Kent
When is payment due?
The gambling tax is due and payable on or before the end of the month immediately following the end of the tax reporting quarter, e.g. 1st Quarter - April 30th. Taxpayers with City gambling taxes exceeding $50,000 during the previous calendar year must submit taxes on a monthly basis in which case the tax is due and payable on or before the end of the month immediately following the end of the tax reporting month, e.g. February - March 31st.
Penalties and interest for late payments are charged as follows:
Penalties
One month past due 10% ($5.00 minimum)
Two months past due 15% ($10.00 minimum)
Over two months past due 20% ($20.00 minimum)
Interest is charged based on 1% of the amount past due (12% per annum) or $2.00, whichever is greater. There is a "non-sufficient funds" (NSF) charge of $25.00 for all returned checks.
How do I file and pay the gambling tax?
Complete and sign the Gambling Tax Return
Remit payment as follows:
City of Kent
Finance Customer Services
220 - 4th Avenue South
Kent, Washington 98032
The City is currently developing an online tax filing and payment option and will make an announcement when it becomes available.
What are the gambling tax classifications and rates?
Business Activity Tax Rate
Amusement Games 2.0% (.02)
Bingo and Raffles 5.0% (.05)
Punch Boards/Pull Tabs 10.0% (.10)
House-banked Social Card Games 11.0% (.11)
Social Card Games 11.0% (.11)
What tax deductions are available and how are they claimed?
Secition 3.21.010 of the Kent City Code establishes a deduction for the amount awarded as cash or prizes for the following gambling activities:
- Amusement games
- Bingo and Raffles
- Punch boards/Pull Tabs
There are no deductions allowed for house-banked social card games or other social card games.