In the state of Washington, business and occupation (B & O) taxes are a major source of state revenue. No matter what industry your business is in, you may qualify for one or more B & O tax credits and be able to improve your bottom line. Here are a few of the B & O tax credits advantageous to a wide variety of business owners.
A Multiple Activities Tax Credit (MATC) could be yours if your enterprise conducts more than one taxable activity on a product. A basic example of this would be a company that both builds and wholesales lawnmowers. The credit ensures that the B & O tax is only paid once for each item produced instead of at the time of manufacture and at the time of sale. Filing the Multiple Activities Tax Credit schedule C is required to take advantage of this credit.
Looking to invest in rural Washington? The state government will reward your business with a credit for each qualifying new employee in a rural county or Community Empowerment Zone (CEZ). Businesses involved in manufacturing, commercial testing or research and development qualify for the credit. Two credit levels cover both lower and higher wage employees. Additional requirements include a 15 percent increase in staffing for a sustained period.
An extra incentive to hire unemployed veterans comes in the form of a B & O credit that is in effect from 2016 through June of 2022. Up to 1,500 dollars per qualifying employee can be claimed, and there’s no cap on how many qualifying employees you can hire. There is, however, an annual state-wide cap of a half million dollars. Credit applications are limited to electronic submissions only.
You could qualify for a tax credit if your small business makes 50 percent or more of its taxable income in gambling, for-profit hospitals, service and other activities or scientific research and development and has a low tax liability.
Conversely, if your business makes less than 50 percent of its income in the above-mentioned activities and you have an even lower tax liability, you may also be able to take advantage of this credit. What’s even better is that this credit gets automatically calculated when you file electronically.
Navigating the complexities of business taxation often requires the help of a seasoned expert in tax law. The good news is that there are ways to save on your business tax bill.