Seattle, WA Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- Classifications
- extracting, manufacturing, retailing/wholesaling, printing/publishing, freight, other
- Lower-tier rate (2018-2025)
- 0.222% (.00222)
- Higher-tier rate (2018-2025)
- 0.427% (.00427)
- 2026-2032 rates
- 0.342% / 0.658%
- Multi-classification businesses
- taxed under each applicable subsection
- Credit mechanism
- multiple activities credit, SMC 5.45.070
Summary
Seattle's business license (B&O-style) tax sorts every business into rate classifications under SMC 5.45.050, extracting, manufacturing, retailing/wholesaling, printing/publishing, motor-carrier freight, and a catch-all "service and other" category, each taxed on gross proceeds, gross income, or product value at its own rate.
Except as provided in subsection 5.55.040.D.1, there is hereby levied upon and shall be collected from every person a tax for the act or privilege of engaging in business activities within the City... C.Upon every person engaging within the City in the business of making sales of retail services, or making sales at wholesale or retail; as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of such sales of the business... multiplied by the rate of .00215 through December 31, 2016... beginning January 1, 2018, through December 31, 2025, by the rate of .00222... F.Upon every other person engaging within the City in any business activity other than or in addition to those enumerated in the above subsections; as to such persons, the amount of tax on account of such activities shall be equal to the gross income of the business multiplied by the rate of .00415 through December 31, 2016... beginning January 1, 2018 through December 31, 2025, by the rate of .00427...
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: Municipal Code: Supplement 44 Update 1).
Full Breakdown
050 levies the tax "upon every person a tax for the act or privilege of engaging in business activities within the City," applying rates to gross proceeds of sale, gross income of the business, or value of products depending on classification. Extractors and manufacturers (subsections A and B) are taxed on the value of products extracted or manufactured in the City. Retailing and wholesaling, including retail services (subsection C), are taxed on gross proceeds of sales regardless of delivery point. Subsection D groups printing, printing-and-publishing, extracting-for-hire, processing-for-hire, and tour-operator businesses, taxed on gross income.
Motor carriers transporting freight for hire (subsection E) are taxed on gross income from freight picked up in the City at a distinct, higher rate. Subsection F is the residual "service and other" classification covering any business activity not enumerated elsewhere, expressly including custom or customized software development, royalty and commission income, freight brokering, and any service that isn't a retail or wholesale sale. 00526 from 2033 on. D-F). 020.
Violations & Fines
Chapter 5.45 does not set its own separate penalty scale; instead SMC 5.45.020 pulls in Chapter 5.55's general administrative provisions, meaning misclassifying a business activity, underpaying under the wrong-rate schedule, or failing to file triggers Chapter 5.55's audit, interest, and penalty regime for City business taxes.
Frequently Asked Questions
What are Seattle's business license tax classifications?
What rate applies to a Seattle retail or wholesale business right now?
Is the service-business rate the same as retail?
What if a business is both a manufacturer and a retailer in Seattle?
Sources & Official References
Other rules in Seattle
Compare Seattle to another location·View the Washington local taxes & fees overview
See something wrong?
Help us keep this page accurate. If you notice an error or outdated information, let us know.
Business Tax Classification in Nearby Cities
How other cities in King County handle business tax classification.