Starting January 1, 2024 certain businesses in Washington state engaged mainly in printing or publishing newspapers or eligible digital content will be exempt from the business and occupation (B&O) tax. Such businesses were previously subject to the B&O tax at a preferential rate of 0.484%. This exemption applies if more than half of their global income comes from these activities. However, the exemption will be reduced by any expenditures during a reporting period, and those expenditures will be taxed based on associated business activities.
To claim the exemption, businesses need to electronically file an Annual Tax Performance report by May 31st for each year they claim the exemption. Failure to file this report will result in a reduction of the claimed exemption by 35% initially and 50% for subsequent years of non-compliance.
For this exemption to apply, a “newspaper” refers to a printed publication issued at least twice monthly or an electronic version sharing content with the print version, prominently identified by the same name or clearly indicated as a complement to the printed version. “Eligible digital content” is a publication published at least monthly, primarily featuring written content identifying the author or original source, exclusively available in electronic format.
The legislation enabling this exemption was signed by Governor Jay Inslee in May 2023, and it is set to expire on January 1, 2034. For more information, see RCW 82.04.759 and RCW 82.04.214 or contact the Taxpayer Account Administration at 360-705-6214.
Businesses that have sales to Washington customers may be subject to the Washington Business and Occupation Tax (B&O) even though the seller may not be located in Washington state. Taxpayers should review the sales tax implications of sales to Washington customers along with the B&O tax reporting requirements and ensure they are in compliance with both tax types. The B&O tax is incurred by the seller not the purchaser. Look for applicable exemptions and determine if the business qualifies then complete the required documentation to obtain the exemption. Ensure a process is established to fulfill the filing requirements and exemption going forward. (Special Notice, Washington Department of Revenue, December 1, 2023)