B&O TAXES: Can I take any deductions?

Yes. City-allowed deductions and exemptions are listed below. Review any deductions you are claiming to ensure that they fall into one of the listed categories.

1. Revenue resulting from a person’s performance as an employee, as opposed to an independent contractor.
2. Revenue from insurance sales, upon which a tax based on gross premiums, is paid to the State of Washington.
3. Sale by a farmer or gardener of his/her own produce.
4. State licensed athletic exhibitions or race meets.
5. Certain gross receipts of fraternal benefit societies.
6. Hospitals owned by a government body or religious corporation.
7. Revenue from the sale, lease or rental (if more than 30 days) of real estate (does not include commissions).
8. Certain amounts resulting from the banking, trust or savings and loan businesses.
9. Sales, distribution or manufacturing of motor vehicle fuel.
10. Liquor sales and distribution (includes beer and wine).
11. Investment revenue for non-financial businesses.
12. Bona fide initiation or membership fees, tuition, donations and contributions to endowment funds & non-profit fundraising income.
13. Trade or cash discounts taken by customers.
14. Bad debts incurred by accrual basis taxpayers.
15. Amounts collected by taxpayers as excise taxes.
16. Business transactions which federal and/or state laws and constitutions prohibit the City from taxing. Must provide documentation of proof.

 Refer to Port Townsend Municipal Code Section 5.04A.090  and  Port Townsend Municipal Code Section 5.04A.100 for detailed explanations.