Effective July 1, 2024, the City of Poulsbo will implement a Business and Occupation (B&O) tax.
The City will host informational workshops to support businesses through implementation once a platform has been established. Please continue to visit this page for updates and future workshop dates to be determined.
The City presently intends to join FileLocal to facilitate filing and payments.
To view a sample of what the return form may look like, please click HERE.
Overview
As an incorporated City, one way the City of Poulsbo will collect revenue to support operational expenditures is through the B&O tax, which will be levied on businesses operating within city limits. This gross receipts tax will apply to the gross revenue measured on the value of products, proceeds of sales, or gross income the business receives. Gross receipts tax means there will be no deductions for labor, materials, or other costs of doing business.
The City of Poulsbo B&O tax is not the same as the Washington state B&O tax and will need to be filed separately from your state taxes.
As a reminder, to do business in the City of Poulsbo you must:
- Have a City of Poulsbo business license in good standing.
- File a business license tax return.
Tax Rate and Exemptions
In 2024, the tax rate for all categories of business is .2%, (.002) and there are two thresholds for exemptions:
Exemption 1: The first $20,000 of taxable gross revenue earned annually (or $5,000 per quarter) that is not subject to retail sales tax is exempt from the Poulsbo B&O tax.
Exemption 2: The first $125,000 of taxable gross revenue earned annually (or $31,250 per quarter) that is subject to retail sales tax is exempt from the Poulsbo B&O tax.
Businesses will be exempted from paying the City’s B&O tax if their gross receipts are less than $20,000, however B&O tax filings are required, even if there is no balance due. Nonprofit organizations will also be exempt from paying the City’s B&O tax but must also file a return.
A full listing of exemptions may be found in Chapter 3.34 of the Poulsbo Municipal Code.
How to Calculate your Taxes Owed
Your gross revenue will determine the amount of tax you pay. To calculate this amount, multiply your taxable gross revenue amount by the tax rate, considering the applicable exemption.
Exemption #1 example: The 2024 retail B&O tax rate is 0.002 (.2%). If your business grosses $200,000 of taxable income that is not subject to retail sales tax in Poulsbo during 2024 you would list $200,000 as your gross revenue, then deduct the allowed exemption of $20,000 from the gross. The taxable revenue is $180,000 which is multiplied by the tax rate .002, for an annual tax liability of $360.
Exemption #2 example: Alternatively, if your business grosses $200,000 of taxable income that is subject to retail sales tax in Poulsbo during 2024, you would list $200,000 as your gross revenue, then deduct the allowed exemption of $125,000 from the gross. The taxable revenue is $75,000, which is multiplied by the tax rate .002, for an annual tax liability of $150.
Tax Periods
Businesses will be required to submit the tax quarterly unless the City grants an allowance for annual reporting. Late returns will be subject to penalties and interest.
| Tax Period | Dates Covered | Due Date |
|---|---|---|
| Q1 | January 1 - March 31 | April 30 |
| Q2 | April 1 - June 30 | July 31 |
| Q3 | July 1 - September 30 | October 31 |
| Q4 | October 1 - December 31 | January 31 |
| Annual | January 1 - December 31 | April 30 |
*For due dates that will fall on holidays or weekends, returns will be due on the following business day.
Resources
You can read the Poulsbo Municipal Code (PMC) Chapter 3.34 for more details about the Poulsbo business and occupation tax.
Please contact tax@cityofpoulsbo.com for further information.