Square footage tax - No longer in effect as of Jan. 1, 2016
Per Ordinance 124910, adopted by Seattle City Council on Nov. 23, 2015, businesses will no longer be subject to the square footage business tax beginning with tax periods starting Jan. 1, 2016. Businesses will not need to compute square footage tax due starting with their first quarter 2016 Business License (B&O) tax return. Please be aware that the square footage business tax will still be levied for all periods from Jan.1, 2008 through Dec. 31, 2015, and businesses with outstanding liabilities still must comply with the square footage tax for these periods.
Square footage tax – information for 2008-2015 obligations
The square footage tax is based on the building floor area used to conduct business.
Many Seattle businesses are NOT required to pay the square footage tax. Before you calculate it read this page carefully. If you have questions about the square footage tax, please contact us.
When NOT to calculate square footage tax
You may not have to pay the square footage tax. Many businesses are either exempt from it or eligible for a full tax credit. Your tax status, business activity location and tax reporting classification determine whether or not you pay the tax.
You do not pay the square footage tax if one of the following apply to your business:
- annual taxable revenue is less than $100,000
- no business activity to report
- exempt from city taxes per federal or state law
- no physical location in Seattle
- located in Seattle and conduct all business within Seattle
- report under only the following classifications: Manufacturing, Extracting, Printing, Publishing, Transporting Freight for Hire,Tour Operator or Processor for Hire
Contact us if you have questions about whether or not you must calculate the square footage tax.
Who pays it?
To be subject to the square footage tax, your business must have a physical location in Seattle and sell goods or provide services elsewhere in the state.
But you only pay the tax if you receive a reduction in your Seattle taxes due to business done elsewhere.
When to calculate square footage tax
For Wholesaling, Retail Sales and Retail Services classifications:
You must calculate your square footage tax obligation if you take the Intra-state deduction.
For Service and Other Business Activities classification:
You must calculate your square footage tax obligation if you have service receipts sourced outside Seattle or if you have payroll costs outside Seattle.
Your business activities might require you to file under multiple classifications. If one of those activities is subject to the square footage tax, for example Retail Sales, then you only pay the tax for the floor area used for retail.
Calculating square footage tax
If you file taxes online using Seattle electronic filing (SELF), then you can calculate square footage tax in the online system. If you file taxes on paper, fill out a square footage tax worksheet and submit it with your tax return. Use the links on the right side of this page to download the appropriate worksheet.
Once you have filled out your quarterly or annual square footage tax worksheet, you can download and complete the maximum square footage business tax credit worksheet.
The Seattle square footage tax rate varies from year to year. You can find the current tax rate by logging on to your Seattle electronic filing (SELF) account. Contact us if you have questions about calculating your square footage tax.
Read the code
You can read the Seattle Municipal Code (SMC) for legal details about the square footage tax.
SMC Chapter 5.46 covers the square footage tax.
Seattle business tax rule 5-930 provides further information.