Tax Types

The City of Tacoma has filing thresholds based on a business’s gross income. If you are required to file and pay taxes there are online, in-person, and mail options.

To learn more, visit the City Taxes web page.

All business activity is reported under a certain tax classification and each tax classification has its tax rate.

To learn more, view the Business & Occupation Tax Classification and Rates table on the City Taxes web page.

Tax credits are created by the City Council for a specific purpose. Credits provide incentives to businesses by reducing the amount of B&O tax paid to the City.

To learn more, visit the Tax Credits web page.

Specific rules for allocating and apportioning income when a business engages in business activity within multiple jurisdictions will apply.

• 2008 – 2019 Apportionment Worksheet 
• 2008 – 2019 Apportionment Worksheet Instructions
• 2020 Service Apportionment Worksheet

Apportionable Gross Service Receipts formula:

Total worldwide gross service receipts for your business

minus (-)

 Allowable deductions allowable per the Tacoma Municipal Code

Payroll Factor formula:

Total payroll paid in the City during the tax period

____________________________________________

Total payroll paid everywhere during the tax period

Service Income Factor:

Total Service Income of the Taxpayer in the City during the tax period

____________________________________________________________

Total service income of the taxpayer everywhere during the tax period

Insert the calculations above into the following formula:

Apportionable Gross Service Receipts x (Payroll Factor + Service Income Factor) = Tax Due

___________________________________________________________________________

2

Apportionment Update 

Effective January 1, 2020, the definition of “customer location” that is used to determine the service income of the taxpayer in the two-factor apportionment formula has a new definition. Tacoma Tax Rule 194 provides more information on the new rules effective for tax periods beginning January 1, 2020.

Sales of Tangible Personal Property/Digital Products (TMC 6A.30.077) 

The activity of sales (retail and wholesale) of tangible personal property and digital products is allocated to the place where delivery to the buyer occurs.

Printing and Publishing (TMC 6A.30.078)

Activity from printing and of publishing newspapers, periodicals, or magazines shall be allocated to the principal place in this state from which the taxpayer’s business is directed or managed.

Intangibles (TMC 6A.30.076) 

Gross income derived from the sale of intangibles such as royalties, trademarks, patents or goodwill is assigned to the jurisdiction where the person is domiciled (the person’s headquarters is located).

Gambling tax is required to be filed monthly to the City of Tacoma.  Monthly returns are due by the end of the month following the close of the tax period. If you did not receive a tax return you may send an email to taxinfo@tacoma.gov and request another copy, or you can file online with FileLocal.

For-Profit Punchboard and Pull Tab – multiply the number of chances played on said board by the price or value of each individual chance or play.

Amusement Games – multiply the number of chances played on games that are awarded a prize (i.e. claw game) by the price of each individual chance or play.  Amounts paid out for merchandise prizes for amusement games may be deducted from the gross income.

Effective January 1, 2019, businesses are no longer required to remit B&O tax on the income generated from gambling activity as defined in TMC 6A.60 – Gambling Tax.

Commissions from machines that you do not own such as music and amusement games, cigarette, ATM, pay phone, pool table, and vending machines including machines that are located on your premises where you do not have control of the coin box are reported under the Service and Other tax classification on your quarterly or annual tax return.

Charitable Nonprofit Organizations – bona fide charitable or nonprofit organizations are exempt from the gambling tax on gambling activities.

Churches, Schools or Non-profit Hospitals – any church, public school, parent-teacher organization, or nonprofit hospital holding or sponsoring a bazaar or carnival not more than once each calendar year wherein bingo, raffles or amusement games are conducted are exempt from the gambling tax on such activities.

Social card games are prohibited per Tacoma Municipal Code 8.36 in the city limits of Tacoma.

Any fee or charge for admission to your establishment or fee to play games is required to include a 5% admission tax.

The Utility tax is reported and paid monthly. Monthly returns are due by the end of the month following the close of the tax period.  Save time and file and pay online with FileLocal.

Communications/electricity/solid waste collection businesses with gross income of less than $20,000 per month, as indicated by billings and/or charges to or for service to Tacoma customers, may request to report and pay the Utility tax quarterly.

If your business gross income is less than $20,000 per month and you would prefer to report on a quarterly basis send an email to taxinfo@tacoma.gov with your City Account Number and request to change your filing frequency. Change in filing frequency can only be done at the start of a quarter (January, April, July, October).

To learn more, view the Classifications & Rates Table on the City Taxes web page.

All business activity is reported under a certain tax classification and each classification has its own tax rate.

There may be deductions or exemptions available for the following types of businesses that engage in public service businesses. The information can be found in the Tacoma Municipal Code Subtitle 6A.

Please follow the links below for more information:

• Communications TMC 6A.40.090
• Electricity and Solid Waste Collection TMC 6A.50.060
• Natural or Manufactured Gas TMC 6A.90.050

The utility tax is levied on the utility company; however, many companies will include the city tax on their customer’s bill.

The admissions tax rate is 0.05 (5%) and is applied to the full admission charge, including service fees, mailing fee or other type of surcharge.

The attendees pay the tax upon admission.  However, it is the organizer’s responsibility to charge and collect the tax. The organizer must pay the collected amount to the City when taxes are filed. The organization is liable for the tax whether or not the tax is collected.

The tax on reduced admission charges shall be charged on the reduced charge and not on the regular admission charge.

When filing admissions, Service Retail Business & Occupation Tax must be reported as well, this is calculated as the gross admission minus the admissions tax due amount.

• Admission to elementary and secondary school activities when held at the school, including athletic events where the students are the athletic participants.
• Admission to events when the primary sponsor is located in the City and exempt from taxation pursuant to RCW 82.04.3651 and the principal purpose of the event is a public performance or exhibition of visual or performing arts, historical objects, or scientific works.
• Admission to a public celebration sponsored and collected by a city or county.